Amazon's foray into India's multi-billion-dollar sector

guest · Jun 20, 2020

Exclusive: Amazon signals entry into alcohol delivery in India with nod in key state - document
June 19, 2020
https://uk.reuters.com/article/us-a...-with-nod-in-key-state-document-idUKKBN23Q37V

Amazon.com Inc (AMZN.O) has secured clearance to deliver alcohol in India’s eastern state of West Bengal, according to a document seen by Reuters, signalling the U.S. e-commerce giant’s first foray into the country’s multi-billion-dollar sector.

In a notice on Friday, West Bengal State Beverages Corp, the authorised agency to carry out online retail of liquor trade in the state, said Amazon was among the companies found to be eligible for registration with authorities.
Alibaba-backed (BABA.N) Indian grocery venture BigBasket has also won approval to deliver alcohol in the state, the notice said.

West Bengal is India’s fourth most populous state, with a population of more than 90 million people.
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Amazon has been invited to sign a memorandum of understanding with the state, said the notice, which has not previously been reported.
Amazon’s interest in delivering alcohol in West Bengal marks a bold move to make inroads into a market that is worth $27.2 billion, according to estimates by IWSR Drinks Market Analysis.

Over the years, Amazon has expanded its e-commere operations in India as more and more people go online to shop for everything from groceries to electronics. The company has committed $6.5 billion in investments in India, one of its key growth markets.
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guest · Oct 26, 2020

Amazon set for face-off with Ambani for India retail dominance
October 26, 2020
https://www.scmp.com/tech/big-tech/article/3107133/amazon-set-face-ambani-india-retail-dominance

Amazon.com and Mukesh Ambani’s Reliance Industries’ fight for dominance of India’s lucrative e-commerce space is turning into a face-off, with both sides battling over the assets of a supermarket chain that could be key to their wider ambitions.

Ambani and Jeff Bezos, two of the world’s wealthiest men, want the stores and warehouses of Future Retail, which has penetrated Indian cities and small towns with sales of everything from grocery to fashion and electronics. Amazon, which owns a stake in a Future unit, and Reliance have in recent months made pacts with the Future Group, which they say are now being violated.
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Amazon wants to block Reliance’s purchase of Future’s bricks-and-mortar assets because such a deal would give Ambani unparalleled dominance in the only billion-people economy open to foreign firms.
Bezos has bet more than US$6 billion on India, and Future’s assets will allow it to reach small towns that house key consumers in a market estimated to swell to US$1 trillion.

Amazon drew the battle lines earlier this month when it accused Future of violating a contract between the two sides by agreeing to a buyout by Reliance.

“Amazon is establishing itself as a reliable online retailer and to take their market share will need a huge effort from Reliance, which is not structured for online retail,” [...]
“But any online retailer will need strong offline support, and that’s why Future’s huge store presence is very attractive to them both.”
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guest · Oct 26, 2020

Amazon wants to block Reliance’s purchase of Future’s bricks-and-mortar assets [...]
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Reliance, Future Group ignore Amazon protest on $3.4B deal
October 25, 2020 (Updated: October 26, 2020)
https://techcrunch.com/2020/10/25/r...-despite-amazon-winning-an-arbitration-order/

Reliance Retail, India’s largest retail chain, said on Sunday evening that its proposed deal to acquire Future Group’s assets for a whopping $3.4 billion — against which Amazon has filed a legal proceeding — is fully enforceable under the Indian law and it intends to complete the deal “without any delay.”

At the moment, it is unclear whether today’s injunction is enforceable in India. Indeed, in a statement, a Reliance Industry spokesperson said that Reliance Retail’s transaction for acquisition of assets and business of Future Retail were conducted under “proper legal advice” and the “rights and obligations are fully enforceable under Indian law.”
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With e-commerce commanding only between 3 -7% of all retail sales in India — and Reliance Retail launching its own e-commerce business to fight Amazon and Flipkart — Amazon’s reported future deal with Reliance Retail is already seen by many industry analysts as crucial for the American e-commerce firm’s future in India.

Updated at 1.30PM IST on October 26: In a filing (PDF) to the local stock exchange, Future Retail said it is examining the order issued by Singapore International Arbitration Centre. “It may be noted that the Company is not a party to the agreement under which Amazon has invoked arbitration proceedings,” it said.
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guest · Nov 7, 2020

Future Retail challenges Amazon in court over Reliance deal
November 7, 2020
https://www.reuters.com/article/us-...zon-in-court-over-reliance-deal-idUSKBN27N0HT

Future Retail has challenged its partner Amazon.com Inc in a New Delhi court to stop interfering in its $3.4 billion asset sale deal, the Indian company said in a statement on Saturday.

Amazon is locked in a bitter legal dispute with Future Group, which in August sold its retail assets to Mukesh Ambani-led Reliance Industries Ltd. The deal breaches agreements made in 2019 by Future, according to the U.S. online retailer.
The dispute has strained Amazon’s ties with one of India’s leading retailers as well as with Ambani, Asia’s richest man, and his Reliance group, which is fast expanding its e-commerce business and is a potential rival to Amazon.

Future has said the deal with Reliance was critical to rescue its ailing retail business which has been hit by the COVID-19 pandemic.
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guest · Nov 20, 2020

India approves Reliance’s $3.4 billion deal with Future Group, brings new headache to Amazon
November 20, 2020
https://techcrunch.com/2020/11/20/i...future-group-brings-a-new-headache-to-amazon/

The Indian watchdog said on Friday it has approved the $3.4 billion deal between the nation’s two largest retail giants, Future Group and Reliance Retail, posing a new headache for American e-commerce group Amazon, which had raised objections over the deal.

Friday’s announcement is crucial. Amazon, which has invested over $6.5 billion in its India business, had requested the CCI and SEBI, the regulator of the securities and commodity market in India, to consider Singapore International Arbitration Centre’s order and block the deal.
Amazon did not immediately respond to a request for comment.
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The deal between India’s two largest retail chains was also seen an opportunity for the CCI to review the entire value chain — wholesale, logistics, warehousing, and front-end retailing — of the retail industry. The clearance delivered today means that the antitrust body has concluded that the deal won’t have an adverse impact on competition in the relevant industry.
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guest · Nov 29, 2020

Analysis: Battle of the billionaires - Bezos, Ambani gun for India retail supremacy
November 28, 2020
https://in.reuters.com/article/amaz...-gun-for-india-retail-supremacy-idINKBN2871AM

Jeff Bezos and Mukesh Ambani, two of the world’s richest men, face a turning point in a battle for preeminence in India’s booming, nearly trillion-dollar retail market.

The outcome of a legal dispute which has embroiled the billionaires’ Amazon.com and Reliance Industries Ltd empires - where a court ruling is imminent - may shape India’s retail landscape for years to come.
The winner in the fight for Future Retail Ltd, Amazon’s estranged local partner, will get pole position in the race to meet the daily needs of more than a billion people.
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If Amazon succeeds, it may slow Reliance’s plans to expand its e-commerce and brick-and-mortar operations. If Amazon loses, its hopes of expanding its interests in India’s second-largest retailer and cashing in on its key grocery supply chain will be dashed, industry insiders say.
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guest · Dec 21, 2020

Indian court rejects retail giant Future Group’s plea against Amazon
December 21, 2020
https://techcrunch.com/2020/12/20/i...tail-giant-future-groups-plea-against-amazon/

An Indian court rejected Future Group’s plea that sought to prevent its partner Amazon from interfering in — and blocking — the Indian retail giant’s $3.4 billion asset sale deal to Mukesh Ambani’s Reliance Industries, delivering a glimmer of hope to the American e-commerce firm that has invested more than $6.5 billion in the world’s second largest internet market.

The court, however, also observed that the lawsuit filed by Future Retail, a unit of Future Group, was maintainable and its attempt to seek approval of the transaction with Reliance Industries was also valid.
The ruling is the latest episode in the high-stake battle between estranged partners Amazon and Future Group.
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At stake is India’s retail market that is estimated to balloon to $1.3 trillion by 2025, up from $700 billion last year, according to consultancy firm BCG and local trade group Retailers’ Association India. Online shopping accounts for about 3% of all retail in India.
Future Group and Amazon did not immediately respond to a request for comment.
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guest · Aug 6, 2021

India’s Supreme Court rules in favor of Amazon to stall $3.4B Future and Reliance deal
August 6, 2021
https://techcrunch.com/2021/08/05/i...mazon-to-stall-3-4b-future-and-reliance-deal/

India’s apex court on Friday ruled in favor of Amazon to stall the sale of Future Group to Reliance Industries in a major victory for the American e-commerce giant in the key overseas market — and a blow to the nation’s richest man Mukesh Ambani.

The Indian Supreme Court said the order by a Singapore arbitration court last year — which had ruled to stall the deal between the two Indian giants — is enforceable and legally binding in India.
The court order today is the latest setback for cash-starved Future Retail, which operates the nation’s second largest retail chain.
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guest · Aug 9, 2021

Amazon and parent of its top Indian seller Cloudtail to end relationship
August 8, 2021
https://techcrunch.com/2021/08/09/a...cloudtail-to-cease-operations-after-may-2022/

Amazon and parent of its top Indian seller Cloudtail have decided to not continue their joint venture after May 2022, the two firms said in a statement Monday, hours after India’s top court ruled that the American e-commerce firm and Walmart’s Flipkart must face antitrust investigations in the South Asian market.

Cloudtail is one of the largest sellers on Amazon in India. The e-commerce group has stakes in a few more third-party sellers including Appario Retail, which is its joint venture with Patni Group.

“As our JV with Amazon reaches the end of its tenure, I reflect on this successful partnership that introduced the power of digitization and empowered hundreds of thousands of SMBs across big and small towns,” said M.D. Ranganath, President of Catamaran, in a statement.
The two firms did not say why they decided to end their joint venture.
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guest · Nov 11, 2021

Amazon wins major arbitration against Reliance-Future, but will they comply?
November 11, 2021
https://www.zdnet.com/article/amazo...against-reliance-future-but-will-they-comply/

A few weeks ago, the Singapore International Arbitration Centre (SIAC) passed a ruling in favour of Amazon that could further sharpen battle lines for control of India's retail market.

The ruling concerns the proposed $3.8 billion takeover of Future Retail, founded by Indian retail icon Kishore Biyani, by Reliance is a distressed sale of sorts. The pandemic had been unkind to Future, consigning it to the ropes with enormous working capital problems and impending loans that it could not possibly service. Reliance seemed like the perfect white knight to take over the company.
But with the new SIAC decision, the arbitrator concluded that the Reliance-Future Retail deal should be put on hold. It reinforces SIAC's original order last year for the deal to be paused.
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Almost immediately after the Reliance-Future Retail deal was announced, Amazon called foul. It stated that it had a non-compete clause that would prohibit the deal from going through.
Since then, both Indian companies have tried to ignore Amazon but the various arbitrations have put a spanner in those plans. Amazon's actions also have done little to impress India's regulators.

This is all to say Amazon can win all the arbitration disputes it wants, but the Indian government still has to recognise and accept the verdicts.
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guest · Nov 14, 2021

India's Future Discloses New Documents to Bolster Case Against Amazon Deal
November 14, 2021
https://money.usnews.com/investing/...documents-to-bolster-case-against-amazon-deal

Independent directors at India's Future Retail have disclosed new documents in a letter to the country's antitrust watchdog aiming to bolster their case against Amazon.com Inc as they seek to revoke a 2019 deal between the two companies.

A 160-page stock exchange filing on Sunday showed the directors reviewed records related to the 2019 deal between a group unit, Future Coupons, and Amazon, and argued that disclosures by the U.S. company before the Competition Commission of India (CCI) when it sought approval of the deal contradicted Amazon's own internal communications at the time.
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The two companies' legal dispute, centred around Amazon's deal to invest $200 million in Future Coupons, has become a high-stakes battle which could determine the dominant player in India's retail market in the years ahead.
Their filing is the latest salvo in an escalating legal battle.

India's financial crime-fighting agency has also ordered Future - the country's second-largest retailer - to submit documents related to the 2019 Amazon deal as part of an investigation into possible breach of foreign investment laws, Reuters reported last week.
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guest · Sep 3, 2022

Amazon, facing ‘unfavorable regulatory environment’ in India, struggles to expand
By Manish Singh @refsrc - August 30, 2022

Amazon is lagging its chief rival Flipkart in India on several key metrics and struggling to make inroads in smaller Indian cities and towns, according to a report by investment firm Sanford C. Bernstein.

The American e-commerce giant’s 2021 gross merchandise value in the country, where it has deployed over $6.5 billion, stood between $18 billion to $20 billion, lagging Flipkart’s $23 billion, the analysts said in a report to clients Tuesday that was obtained by TechCrunch. The company’s recent spendings for growth in India has also made profitability “elusive,” the report added.
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India is a key overseas market for Amazon, where it competes with Mukesh Ambani’s Reliance Retail, Walmart-owned Flipkart and social commerce startups SoftBank-backed Meesho and Tiger Global-backed DealShare. Amazon has so far offered “a weaker proposition in ‘new’ commerce” in the country, the report added.

“Amazon has struggled to scale volumes in higher margin categories such as fashion and BPC, while the inability to operate a 1P model (inventory-led) has limited the availability of private labels vs competition which further pressures margins. Amazon’s management attrition has also increased recently, potentially signaling difficulties achieving desired scale,” the report adds.
Amazon, like Walmart’s Flipkart, operates a marketplace business in India due to local regulatory requirements. It’s facing a wide-range of other regulatory pushback in the country. Marketplaces cannot have controlling stake in sellers on their platform.
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A single seller cannot have more than 25% share on a foreign-owned online marketplace. No e-commerce marketplace platform can mandate a seller/brand to sell exclusively on the platform. “It has also clamped down on deep discounts,” the report adds. Additionally, a new guideline proposed by India’s central bank, if enforced, will impact Amazon’s buy now pay later offering, the report added.
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guest · Nov 8, 2022

Amazon quietly opens its logistics network to third-party merchants in India
By Manish Singh @refsrc - November 8, 2022

Amazon is quietly beginning to offer its transportation and logistics network as a service to third-party merchants, businesses and direct-to-consumer brands in India, tapping its large delivery chain to drive revenue in the key overseas market as the e-commerce group attempts to replicate a model it has been testing in the U.S. for several months.
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The service, called Amazon Shipping, offers “extensive reach and the highest reliability – all at the lowest logistics cost,” the company describes on its website. Amazon Shipping “will pick up your parcels 7 days a week, and deliver them to your customers,” the company adds.

The retailer, which has poured over $6.5 billion in India over the past seven years, says it’s offerings its shipping at “competitive rates,” and includes a dedicated support channel. There’s no additional fee for deliveries on weekends and customers are not tied to any contract for a consignment, allowing them to cancel the service at any time.
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As Amazon expands the Shipping service, it may become a headache to local firms including Delhivery, Ecom Express, and even legacy logistics giants including Blue Dart and India Post.

Indian newspaper Economic Times first reported about Amazon Shipping, and added that Amazon Shipping covers all types of products other than dangerous and hazardous goods. On a policy page, Amazon says Shipping currently offers the ground mode of deliveries and resricts the number of shipments items to 99 per order.
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guest · Jan 14, 2023

Amazon quietly tests even cheaper Prime membership in India
By Jagmeet Singh @jagmeets13 - January 14, 2023

Amazon is quietly piloting a new tier for its Prime membership in India, providing customers with access to popular benefits such as free two-day delivery and ad-supported Prime Video in standard definition at a lower price.
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The new tier, called Prime Lite, is currently available to select customers at a discounted annual price of $12 (999 Indian rupees). This is a cost-effective alternative to the regular Prime membership, which is priced at $18 (1499 Indian rupees) per year, or $2.20 (179 Indian rupees) per month. [H/T OnlyTech]

Amazon’s Prime membership has been available in India since 2016. It was priced at $12 a year for some time, though the company increased its pricing to $18 in December 2021. In the U.S., the Prime subscription is available at $139 per year or $14.99 per month.
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The new offering comes just weeks after Amazon launched Prime Gaming in India. The gaming-focused service is complementary to Amazon Prime and Prime Video subscribers.
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guest · Jan 23, 2023

Amazon launches freight service Air in India
By Manish Singh @refsrc - January 23, 2023

Amazon has launched Amazon Air, its dedicated air cargo fleet, in India as the e-commerce giant bulks up its logistics infrastructure in the key overseas market where it has deployed over $6.5 billion.
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The retailer has partnered with the Bengaluru-based cargo airline Quikjet to launch its maiden air freight service in the country, which it said will enable the firm to speed up its delivery. Amazon, which is utilizing the Boeing 737-800 for the service, said it will initially use Amazon Air to deliver goods in Delhi, Mumbai, Hyderabad and Bengaluru. An Amazon executive described the launch of Amazon Air as a “huge step forward for the aviation industry” without explaining how.

Amazon launched Air in the U.S. in 2016 with over three dozen Boeing freighter aircrafts. It also briefly tested the program in the U.K. India is the third market where Amazon has launched its freight service. The company said Air fleet includes over 110 flights across 70 destinations worldwide and it has invested “hundreds of millions of dollars” in its air logistics capabilities.
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The move follows Amazon opening up its transportation and logistics network to third-party merchants, businesses and direct-to-consumer brands in the country late last year.

“Amazon India uses its own services for delivery of around 80-85% of orders and has opened up its delivery arm to others sellers. Delivery itself is a business which can achieve massive scale in India. So it makes sense for them to start this in India,” said Satish Meena, an independent analyst who tracks e-commerce sector in the country.
India is one of the key overseas markets for Amazon.
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Amazon: Amazon Air takes off in India

January 23, 2023
Customers can expect great selection, low prices, and even faster deliveries; India is the first market in Asia for Amazon Air.
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