Amazon or Alibaba Group, Who will buy the first stake in Future Group? It seems that Amazon is going ahead in this race right now. Future Group founder Kishore Biyani met Amazon founder Jeff Bezos two weeks ago in the US. In this meeting, the possible alliance between the two was discussed. Future Group is occupied by one third of the organized food and grocery market in the country. Biyani had visited China some time ago, where he met the officials of Alibaba. He went there to understand the business model of the Chinese company. Biyani wants to execute that model in India.
One of the three sources familiar with Biyani’s conversation with Amazon said, “Future Group is thinking of bringing a strategic investor to the company, while Amazon wants to have online presence in India. In particular, his interest is to try this strategy in the grocery retailing segment. The founders of the two companies met at Amazon’s Seattle-based headquarters. Both spoke on the Indian retail market. It was discussed that this kind of alliance can benefit both the companies.
One source said that Biyani did not have many options in the matter of strategic investor as some of the global players have the hunger for increasing business in India and money for them. He said that from the view of Amazon’s point of view, the Future Group could be a good partner for him. The Biyani group has an offline retail model. Biyani has set up a profitable business of food and non-food items. The presence of Future Group is expanded in large part of the country. Its strength lies in apparel, general merchandise, luggage, and footwear segment. Amazon may also feel that buying stake in Alibaba or Softbank’s Future Group can increase his challenges in India. Future Group and Alibaba did not respond to questions related to this news, while Amazon said that it did not want to respond to speculation.
A retail analyst said that Amazon could invest in India’s retail company through his investment unit. It can take a stake in the same way in the Future Group, the way he has taken 5% in Shopper’s Stop. In India, Amazon has registered with SEBI as a portfolio investor. Therefore, it can take up to 49% of the country’s retail company.
The online and offline retail giants are majorly focusing on making an influencing presence in lucrative Indian retail market.