Wednesday, September 26, 2018

AMAZON to Court OFFLINE Shoppers in India with RETAILER Acquisition

India is often described as one of the last frontiers where the internet infrastructure has yet to be utilized to its utmost. That is not entirely true; it is merely that only now have major tech and online companies have begun to set up in that country, from Chinese smartphone manufacturers to American online marketplaces. For instance, retail chain Wal-Mart has had the time to establish its online retail platform in India, but it will not be alone in that matter soon. Amazon, the seemingly all-encompassing retail giant, will be making its entry in the country, but doing it offline.
CNN tells us that e-commerce juggernaut Amazon is not going to blitz the internet in order to gain a foothold in India. Instead, they will go offline through real-world marketing in order to attract millions of customers in the country who are not yet that tech-savvy enough to go shopping online. It has begun this campaign by acquiring a 49% stake in Indian supermarket chain More. Samara Capital, a private equity firm, will have the remaining 51%. More was part of a larger retail company in India under the Aditya Birla conglomerate, but was recently sold to another company, Witzig.
It is interesting to note that, while director Paurush Roy of Witzig has confirmed the stake by Samara Capital for More, he and Samara are both mum on the degree of involvement Amazon had with them. All Roy mentioned was that he was confident in More being able to address customer needs for choice food and grocery items with its over 540 grocery stores across India. Still, local media have pegged that Amazon had a hand in the deal, part of its plan to increase its presence in the country and catch up to the head start that Wal-Mart had.
Then again, Wal-Mart’s majority acquisition in May of India’s biggest homegrown e-commerce platform Flipkart (77% controlling stake) was in itself a response to Amazon’s initial foray into the country last year, when it bought into fashion retail chain Shoppers Stop. The massive online marketplace brainchild of Jeff Bezos however, decided that rather than compete with Wal-Mart on that nation’s online retail scene, it would instead bring its products into local brick-and-mortar outlets via More, to take advantage of the fact that, while online shopping in India is now a thing, many Indians still prefer shopping in person, especially if it is groceries.
In a way, Amazon is repeating its brilliant idea of acquiring Whole Foods back in the US, only this time for Indian shoppers via the More supermarket chain.
Image courtesy of Fortune


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