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Online weds offline: What the Amazon Future e-commerce partnership means

Team YS
14th Oct 2014
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Online weds offline (image credit: Reuters)

The e-commerce business has never been hotter. Whether it’s one-upmanship in investment numbers, mega sales with eye-popping discounts, or exclusive tie-ups with manufacturers, the big players are pulling all the stops this festive season to grab eyeballs, clicks and buys.

And amid this clutter, comes another announcement. Future group has tied up with Amazon India to sell its brands exclusively on the e-commerce giant’s platform. The partnership will initially only cover Future group’s fashion brands such as Lee Cooper, Converse, Indigo Nation, Scullers and Jealous21, but will move on to other categories as well.

Last month, Croma, the Tata group’s chain of electronics and consumer durables, tied up with Snapdeal.com to make its goods available via the e-commerce platform, reflecting the increasing engagement between online and offline retailers.

Future Group operates retail chains such as Central, Big Bazaar, Foodhall, Planet Sports, Brand Factory, Home Town and eZone. Last month, its founder Kishore Biyani said he would invest Rs 100 crore in what he called the group’s “omnichannel retail strategy”.

Amazon has also had a busy few months. In May, it announced a tie-up with Narayana Murthy through his private investment firm Catamaran Ventures, aiming to bring offline small sellers and SMBs online.

After founder Jeff Bezos visited India last month and famously handed over a $2 billion cheque to its India head Amit Agarwal, there were news reports that it is in talks to acquire Jabong, India’s No. 2 online retailer. The Future group tie-up is one more in the list of high profile moves that mark its sharpened focus on India.

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The Indian retail space is changing like never before, as the e-commerce giants ramp up their efforts and brick and mortar companies are definitely feeling the heat.

Taking an offline retail business online is more than just marrying technology with smart merchandising. There’s community building, customer engagement, targeted marketing – which present challenges even for seasoned e-commerce companies.

Future group has been traditionally following an inventory-owned model and Biyani appears to have figured out that there is no point in reinventing the wheel and that it is smarter to piggyback on the infrastructure and fulfilment mechanisms already built.

The signs of vibes between Future and Amazon have been there, whether it was Jeff Bezos' meeting last month with Future group founder Biyani, or Biyani’s own vocal disapproval of Amazon competitor Flipkart’s brash Big Billion Sale.

For Amazon India, it is a quick way to make deep inroads into the complicated fashion retail business, the one area where challenger Flipkart has the upper hand, thanks to its acquisition of Myntra. The U.S giant is also more than five years behind Flipkart and will be in a hurry to play catch-up and what better way to do that than high-profile acquisitions and tie-ups?

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