The world’s largest online platform, Amazon, steered by Jeff Bezos, is in early talks with Reliance Retail to acquire up to 26% stake. Reliance Retail is India’s largest brick and mortar business which has seen phenomenal growth in the last few years.
Mukesh Ambani, who is the richest man in India, was in talks with China’s largest online platform, Alibaba to sell off a stake in Reliance Retail. Unfortunately, the deal was not cracked because of the differences in valuations of the two biggest companies. Going by the past experiences, Reliance Retail made clear that there is no certainty about the deal with Amazon.
Amazon has approached Reliance Retail a few months after Alibaba-Reliance incident which is a strategic step towards amalgamating with India’s largest brick and mortar retail business. Amazon wants to have the upper hand in the Indian market. Reliance Retail still has the most number of physical shopping outlets in India and being an omnichannel setup, it undoubtedly provides a seamless shopping experience.
Amazon is in talks with Future Group also, but the pace of this conversation seems to be proceeding sedately.
This deal if gets succeeded would help both the companies. The offline strength of Reliance and the online strength of Amazon will complement each other to grow at a faster pace.
Amazon’s spokesperson recently said, “We do not comment on speculation about what we may or may not do in the future.”
Reliance representatives, on the other hand, said, “Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges.” \
The following will be the benefits of this deal:
- Through Reliance’s omnichannel business, Amazon will be able to have access to the broad network.
- Amazon will be able to fill its own pockets by saving their money as Reliance’s buying power in consumer goods is extremely powerful.
- Amazon is also India’s largest online platform and through this platform, Reliance will be able to reach out to more and more consumers
- Reliance outstanding debt is INR 2.88 Crore, this deal would help Reliance in reducing its own debt.