BENGALURU/MUMBAI (Reuters) – Amazon.com Inc. (AMZN.(O) is in preliminary talks with Reliance Industries Ltd (RELI.NS), a retail unit and for the purchase of up to 26% stake in India’s biggest brick-and-mortar retailers, the Economic Times (ET) reported on Thursday.
FILE PHOTO: The logo of Amazon is seen in the new warehouse during the official opening announcement, and on the outskirts of Mexico City, Mexico-July 30, 2019. REUTERS/Carlos Jasso/File Photo
The conglomerate, which is controlled by India’s richest man Mukesh Ambani, was previously in talks with china’s Alibaba (BABA).The sale of a stake in Reliance’s Retail, but a deal could not be concluded as a result of the changes in valuation, a person familiar with the matter told Reuters.
Having an online partner could assist in the strengthening of the Confidence of the retail business, the person will be added, declining to be identified as the matter is private it was.
The Amazon Trust, the conversations may not lead to a deal, according to the ET report. Reuters could not independently verify the conversation.
Amazon declined to comment, while the Trust said that it will not have the information that is provided to stock exchanges as and when required.
“As a policy we do not comment on media speculation and rumours,” Reliance said in a statement. “Our company considers various options on an on-going basis.”
A partnership between the Trust and on Amazon, it would be a win-win-win situation for both the companies.
Trust and confidence in the potential to take advantage of Amazon’s global experience in technology, supply chain and logistics as it aims to connect the local grocery stores in the entire country in digital form via the Jio telecom’s network is the largest in India by its clients.
Amazon’s massive online presence can also help to boost the Confidence of the consumers and the private label business, according to retail consultants. Reliance Retail’s turnover 381.96 billion rupees ($5.53 billion) in the previous quarter.
For Amazon, to pick up a stake in a Trust unit would be able to do that is to gain access to the Jio telecom is the platform and in the large retail footprint of more than 10,600 stores spread all over India. It can also be done by adding some more firepower to their work, as well as confidentiality and the family Ambani can be seen as closely connected to the government of India.
“There can be synergy, that is, outside of the retail industry,” said Arvind Singhal, chairman of retail consultant Technopak Advisors. “If there is evidence of some form of policy intervention is required in order to be a partner with the Confidence, will certainly have a big advantage.”
Seattle-based Amazon has been locked in a fierce battle with Walmart’s (WMT.(N) Flipkart for a larger share of India’s fast-growing e-commerce market, which Deloitte is expected to more than treble to us $84 billion between 2017 and 2021.
Both U.S. giants have a loyalty program and credit card deals to attract more Indian customers and one of their most important markets.
Amazon is planning a foray into the burgeoning online food delivery business in India this year, Reuters reported earlier this week.
Reliance Industries’ shares fell 1.1% by mid-day trade in Mumbai on Thursday, in line with a fall in the benchmark Nifty index .NSEI.
Reporting by Nivedita Bhattacharjee and Sankalp Phartiyal; additional reporting by Derek Francis; edited by Rashmi Aich