Who's going to be the king of Indian retail market - Reliance or Amazon?

As per the Boston Consulting Group and Retailers’ Association, India’s retail market is expected to touch $1.3 trillion in coming 4-5 years.

It’s a high-stakes battle between the United States-based e-commerce behemoth Amazon and Indian billionaire Mukesh Ambani-owned Reliance Industries, as they try to hog India’s e-commerce space. Caught in this huge clash is Kishore Biyani-led Future Group.
In August 2020, Reliance Industries had declared the acquisition of Future Group for Rs 24,713 crore in a bid to build up its retail business in India and take on Amazon. The Competition Commission of India (CCI) had moved forward the deal between both the biggest retail giants, which pushed Amazon against the wall.
Amazon, which owns a 49 percent stake in a holding company of the Biyani-led group called Future Coupons, opposing the deal, moved the Delhi High Court seeking seizure of Biyani’s assets and implementation of the Singapore arbitrator’s restraining order on the deal. As per a latest update on the case, the Delhi High Court has temporarily restrained Future Group from selling its retail assets to Reliance Industries Ltd, which can be now taken as an interim win for Amazon.
Amazon had alleged that the deal violates its own contract with Future Group and had filed an urgent petition last week seeking the suspension. The order has a chance to be challenged in a higher court.
However, if the deal between Future and Reliance comes through eventually, it will boost Reliance’s retail business in a big way. No doubt, India has seen a huge push in demand for online groceries, and the takeover will consolidate grocery retail, as Reliance Retail revenues stood at over Rs 340 billion in FY20 and Future Retail’s was Rs 100 billion for the same fiscal year. Also, Reliance Jio’s latest e-commerce platform JioMart is said to be working with WhatsApp to ensure opportunities for Kirana shop owners and small traders in the country.
Reliance Retail already runs supermarkets, cash and carry stores, and hypermarkets in more than 7,000 Indian towns, while Jio Platforms has over 400 million subscribers, making it India’s largest telecom network.
The partnership of the Future group and Reliance will only bolster the latter's hold over this space, challenging Amazon India. Amazon India is not weakling; it has a seven-lakh seller-base in India. Amazon also onboarded many brick and mortar stores across India to takeover the Kirana landscape, the e-commerce giant also has an over 600-store network of ‘More’ Retail which was acquired from the Aditya Birla Group.
As per the Boston Consulting Group and Retailers’ Association, India’s retail market is expected to touch $1.3 trillion in coming 4-5 years. Further, recent reports on the same suggested that India is considering altering its e-commerce foreign investment rules and this, along with India’s push for ‘Vocal for Local’, may pose some more challenges for foreign e-commerce players like Amazon.
It's a witnessed fact that India is a fertile land for major companies such as Amazon and Reliance to lock horns and wrest control of the consumer base. So on the part of Reliance, the first phase of the battle is to secure its deal with Future Retail and capture market share, which has been dominated by Amazon, who's CEO, Jeff Bezos has decided to step back from the position to become the chairman in another twist.

Sakchi Khandelwal

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