Amazon may join its global competitors Facebook and Google in supporting one of Indian tycoon Mukesh Ambani's business projects. The e-commerce behemoth is in initial talks to buy a nearly 10 percent stake in Reliance Retail, local television news channel ET Now disclosed Thursday afternoon, citing anonymous sources.
The American e-commerce group wants a preferred, strategic share in Reliance Retail for JioMart, tweets by the TV channel revealed. JioMart, the e-commerce division of Reliance's retail unit, was unveiled in May and poses a major challenge to Amazon's local arm and Walmarts Flipkart.
It was widely anticipated that Amazon would jack up its investment in Future Retail, which is having difficulties as a result of soaring debts and the coronavirus pandemic-triggered revenue hit before RIL came out as the frontrunner, more so following the recent fundraises.
At present, both the e-commerce platforms – Amazon Pantry and Reliance JioMart – are up against each other in the internet grocery landscape. If the contract pushes through, it is expected to boost Amazon's presence in the grocery business, which is dominated by companies like Grofers and Bigbasket.
Amazon, which recently grew its Amazon Pantry to more than 300 Indian locations, would be aiming to snag a bigger slice of the market pie in tandem with Jio Mart. Introduced in May this year and available in more than 200 cities, JioMart covers everything that is associated with grocery and consumer products.
An Amazon representative through email disclosed that the tech giant does not comment on market speculation, while Reliance did not immediately respond to a request for comment. Reliance, controlled by Mukesh Ambani – the wealthiest man in Asia – has secured roughly $20 billion since late April for its digital unit, including from Facebook and Alphabet Inc's Google.
Founded in 2006, Reliance Retail is the biggest retail chain in India. The group serves more than 3.5 million clients per week through its almost 10,000 physical shops in over 6,500 cities and towns in the country.
Reliance is also in its final phase to procure Future Group. For Amazon, Reliance Retail would be its fourth major investment in the local brick and mortar retail group. Previously, Amazon acquired shares in Shoppers Stop, More and Future Coupons.
While Amazon would be buying shares in Reliance Retail, Ambani's telecom venture Jio has been on a funding spree starting in April last week. So far, the business has secured a $20 billion investment for the current year.
