India’s Future Group retail chain will sell its products on Amazon.com Inc.’s online site, The Economic Times newspaper reported on Monday. The two companies will also partner on additional marketing and sales opportunities.
Future Group is targeting “gross merchandise sales” of 60 billion rupees ($1 billion) in three years, the paper reported, citing Kishore Biyani, the company’s chief executive.
“The deal is deeper than just transactional involvement with Amazon. We are exploring several synergies in data sharing, co-branding, cross promotion and distribution network sharing through the partnership,” Biyani told the newspaper.
Future Group is the parent company of a clutch of businesses that sell everything from groceries to fashion apparel to electronic gadgets and kitchen ware and furniture. Shares of two of the group's listed companies, Future Retail Ltd. and Future Lifestyle Fashion Ltd. jumped on the news of the Amazon partnership, in intra-day trading in Mumbai.
Future Group’s existing collection of more than 40 brands “will be retailed exclusively online” through the Amazon.in website, the companies said in a statement on Monday.
Unlike in the U.S., India’s restrictive rules on foreign investment in retail businesses don’t allow Amazon to sell directly to individual customers even as online retail is set to explode in the country. Private equity firm Accel Partners estimated in a recent study that online buyers in India will double to 40 million and sales will grow more than four times from $2 billion in 2013 to $8.5 billion by 2016.
The rules haven’t stopped founder and CEO Jeff Bezos from aggressively expanding in India, where Amazon functions as a market place and offers logistics and warehouse space to its retail partners. That practice too has attracted the attention of tax authorities in India, the newspaper reported separately on Monday.
This story has been updated to add a link to a joint statement from both companies, to be found in the fifth paragraph.