Future Retail, the retail arm of Mumbai-based conglomerate Future Group, announced a “long-term” partnership with Amazon India to bring the retailer to the popular Amazon.in site, focusing on grocery, general merchandise and fashion.
As a result of the deal, Amazon.in will become the authorized online sales channel for Future Retail stores, which include banners like flagship Big Bazaar, a so-called hypermarket—the U.S. equivalent of a big box store—which offers fashion and general merchandise, and the global gourmet food market Foodhall.
In addition, Future Consumer, another Future Group subsidiary that develops food, home, personal and beauty products for “India’s next-generation, young consumers,” also announced a long-term agreement with Amazon to distribute its brands alongside the food products from Amazon Retail India Private Limited (ARIPL), an Amazon subsidiary that sells consumables produced and/or manufactured in India.
Future Consumer brands include Tasty Treat snacks, Voom for fabric care, Dreamery dairy products and CleanMate household goods. To date, the brands had been available “largely offline” through Future Group stores.
The deal also means Future Retail will become part of Amazon’s Prime Now program, which enables customers in Delhi, Mumbai, Bengaluru and Hyderabad to receive food, grocery and general merchandise within two hours.
Future Group did not comment beyond the press release. Amazon did not respond to a request for comment.
In a press release, Future Retail said it plans to “augment existing store infrastructure at its retail outlets” to enable in-store pickup of online orders. Future Retail said it has offered the option to buy online, pick up in store (BOPIS) at 22 of its 1,500 stores “and the results have been encouraging,” hence the expansion to Future Retail’s entire network.
It was not immediately clear how widespread BOPIS is in India. Walmart did not respond to a request for comment about whether BOPIS is available from its $16 billion Indian ecommerce subsidiary Flipkart. (Although BOPIS certainly grew in popularity among U.S. customers in 2019.)
According to Oweise Khazi, director of the insights firm Gartner for Marketers, it only made sense for Amazon to enter into a deal with a local player in India to hedge against its biggest competitor there.
“The deal will allow Amazon to get boots on the ground in India and leverage Future Retail’s physical footprint in its delivery channels as it looks to expand in the country,” he added. “Lack of brick and mortar settings has been one of Amazon’s weaknesses in North America—especially in the grocery sector—and partnering to grow [the] retail space in an expansive yet dense country with far from excellent supply chain capabilities is an astute strategy for expansion.”
Future Retail is indeed widespread throughout India, which is the world’s second most populous nation—it boasts millions of customers in more than 400 cities—and, in the release, the company said Amazon.in will help it reach a broader customer base as Future Retail’s consumer-centric network is married with Amazon.in’s tech-enabled distribution footprint. (Future Retail is also the entity responsible for bringing U.S. convenience store chain 7-Eleven to India in 2019.)
“[Future Retail’s] national footprint of stores offering thousands of products across fashion, appliances, home, kitchen and grocery will now be available to millions of customers shopping on Amazon.in, in hours across 25+ cities,” said Amit Agarwal, senior vice president and country head of Amazon India, in a statement.
Amazon.in launched in 2013 and, according to web analytics firm SimilarWeb, it was the top retail site in India as of November 2019 with 292.2 million monthly visits. That’s followed by Flipkart with 216.7 million monthly visits, New Delhi-based ecommerce site Snapdeal with 71.7 million, Chinese marketplace Alibaba with 69.9 million and Chinese fashion, beauty and lifestyle ecommerce platform Club Factory with 47.5 million.
Anecdotally at least, the deal certainly gives consumers in India another reason to visit Amazon.in. It also gives Amazon.in a boost in fashion, which is one sector where a 2018 Forrester report on ecommerce in India found Walmart at an advantage.
In addition, a Walmart spokesperson noted in a 2018 interview that the retailer had recently brought its affordable Great Value brand to India as it pushed everyday-low-prices messaging to Indian consumers. Now, with Future Retail’s Big Bazaar, which offers groceries along with home furnishings, utensils, cookware, cutlery, sporting goods “and much more at prices that will surprise you,” Amazon may have found its answer to that, too.
“The deal is essentially a win-win for both Amazon and Future Retail as they look to establish synergies between their physical and digital retail strengths,” Khazi said.