Future Group and Amazon Partnership

From being dismissive about the potential of e-commerce in India to joining hands with the sector, leading ‘brick and mortar’ retailing entities seem to have had a chance of thinking on the former. A week after Future group Kishore Biyani alleged that online retailers were indulging in predatory pricing, the company announced a partnership with Amazon India.

The two companies will jointly sell goods over the internet amid growing friction between online and offline retailers over heavy discounting. Future group will sell more than 45 own labels of apparel, followed by in-house brands in the home, electronics and food categories, while the US headquartered company will handle order fulfillment and customer service for the merchandise on its portal. Both firms will also develop a new line of products across categories to be exclusively sold at Amazon and Future Group’s retail stores.

In its home market, Amazon had similar alliances with retailers such as Target Corp and Toys R US in the past decade though both sourced over time once the online seller gained scale and attracted other large brands. Following the India deal, Future Group’s four dozen own brands such as Lee Cooper, John Miller and Indigo nation will be taken off from online marketplaces where they are currently being sold.

It is also reported that Amazon is planning to open its first brick and mortar store in New York. The company main rivals in India are Flipkart, Snapdeal and other online stores. In the offline market, just three companies – Aditya Birla Madura Garments, Arvind Brands and Future Group either own or sell more than two dozen brands each, thus becoming the preferred options for any online player looking to partner retailers.

Industry insiders also said the Indian retailers move reflects a bid to expand into new distribution channels such as e-commerce in the search of growth. Last month, Snapdeal agreed to create Croma Flagship store on its e-commerce portal to sell electronics items including mobiles, tablets, and laptops.