As Amazon moves to strengthen its physical retail presence in India, the eCommerce retailer is reportedly in late-stage discussions to acquire up to 10 percent of Future Retail Ltd. The Indian supermarket firm is looking for a roughly 20 billion rupee valuation from Amazon for the stake, Bloomberg reported.
The sale would likely be routed via a holding company and would give Amazon the option to purchase more shares from Future Retail Founder and Chairman Kishore Biyani. However, the report noted that talks have not been finalized, and the arrangement could be delayed or falter. Representatives from Amazon India and parent firm Future Group did not comment on the speculation.
The deal with the operator of the Big Bazaar grocery store chain would provide Amazon with more exposure to the business following its purchase of Whole Foods in 2017. The proposed Future Retail investment would let Amazon tap into the increasing demand for household items as well as home-delivered vegetables and produce.
Amazon has been at work on acquiring small stakes in other Indian brick-and-mortar companies, like a grocery chain from the Aditya Birla Group and Shoppers Stop Ltd. The eCommerce retailer has also invested $5.5 billion into its own operations in an effort to take a larger portion of the modern retail market in India.
In separate news, Amazon was reportedly planning to roll out a food delivery service in India, per reports in July. Although India’s rising middle class has triggered the growth of the eCommerce food delivery sector, profitability is said to remain “elusive,” per a past report. The space is dominated by Tencent and Naspers-backed Swiggy and Zomato. Amazon’s move into delivery from takeaway food outlets and restaurants could help the firm attract customers for other offerings.