E-commerce giant Amazon has introduced a number of new products at its product event in the US. Whereas on the other side of the globe, in India Amazon is trying to make its presence felt more strongly in the offline retail space.
Media in India reported the US e-commerce giant Amazon along with PE firm Samara Capital, have formed a company called Witzig Advisory Services Private Limited to which will hold ownership stakes in More, through a deal worth $58 million. The Indian Regulatory laws prevent Amazon from owning the business entirely and have worked around with Samara Capital as its local partner to take a majority stake.
The deal is a big move as it will allow Amazon to enter into the brick and mortar retail in India. This segment is one of the up-and-coming global markets. Earlier Amazon made inroads into the US retail markets by taking over Whole Foods for $16 billion last year. The current India specific acquisition is also strategic.
India Amazon is facing stiff competition from Flipkart for dominance in India’s e-commerce market, which is projected to grow four times to reach $150 billion by 2022, as per reports submitted by PWC. Flipkart, on the other hand, has got the boost from Walmart, which is a chief rival of Amazon in the US, by entering a $17 billion deal earlier this year.
With this deal, Walmart made inroads into India’s e-commerce market and with the help of Flipkart’s tech and experience aims to grow further into other emerging markets.
Amazons latest More deal will help it position itself at par in Walmart’s core business activity. Currently, Amazon operated limited fulfillment centers in India and aims to boost its own payment service in India via the fintech startup Tapzo.