Amazon in Discussion over Buying Stake in Reliance Retail

Amazon’s foray into India has been largely successful and the company’s Indian business has slowly but steadily grown into one of the most important players in the e-commerce space in the second biggest economy in Asia. However, the competition is now heating up as more and more companies enter the space. Hence, it is not surprising that Amazon is now looking for strategic deals that could help it in further expanding its presence in the Indian e-commerce industry. In a new development, reports have surfaced that Amazon is now trying to buy a stake in Reliance Retail. Reliance Retail is the retail arm of Reliance Industries Limited, which is among the biggest conglomerates in India. Additionally, Reliance Retail is also the biggest brick and mortar retail chain in the country at this point in time. 

It is believed that if the stake is sold to Amazon then it could prove to be a mutually beneficial arrangement for both companies. On one hand, Amazon’s huge online e-commerce platform could spring Reliance Retail’s products to a much wider customer base. On the other hand, the dual might of two giant companies could also help in the threat posed by Flipkart, the Indian e-commerce company that is now backed by retail behemoth Walmart. Walmart bought the company last year for $16 billion. 

However, one of the sources close to the developments has stated that although the offer has been made to Reliance, there is no clarity yet whether the Indian company is going actually go through with the transaction. In this regard, it is also important to note that Reliance is now trying to enter the e-commerce industry on its own and hence, a partnership with a potential rival might not particularly appeal to the company’s executives. Another source stated that Amazon’s strategy is to help Reliance on selling as many as 40 of its brands online and that could prove to be an attractive proposition. This is a deal that could draw out for some time but it is something that could cause a big ripple in the Indian e-commerce industry.