After Walmart-Flipkart deal, Amazon scouts for offline ally

In the retail war between Walmart and Amazon in India, it is the Jeff Bezos-led technology giant’s turn to make a move. According to sources, the global e-commerce giant has started preliminary discussions with Indian supermarket, hypermarket and retail companies to buy a stake in any one of these firms.

While the talks are still at a preliminary stage, sources said major retail players had held discussions with Amazon. Recently, after the announcement of the Flipkart-Walmart deal, the Future Group’s founder, Kishore Biyani, had indicated he was ready to sell a stake to the strongest global retailer.

Sources said Biyani had held discussions with Amazon and Walmart. Some of the regional hypermarket and supermarket players have also had held discussions with Amazon.

Sources said these discussions were not a reaction to Walmart buying 77 per cent of Flipkart for $16 billion, as Amazon has had offline plans for a long time. “Just like in the United States, it wants to expand its reach in retail. Amazon has had discussions with some of the companies but things are still at an early stage. If things fall in place, then a deal with a major retailer might happen by the end of this year,” said the source. Amazon India, however, refused to comment on the issue.

Sources said Amazon planned to initially take a 10 to 15 per cent stake in one of the firms it was in discussions with and would later scale up its investment. “If need be, it will buy a majority stake. Now, the plan is to test the waters. It needs to see how the retail chain management will work in India. The company, in the long run, will invest in cold chains and start sourcing directly from farmers. It also plans to ship locally made products abroad at a later stage. Amazon is already selling products manufactured by local sellers abroad,” added the source.