Future Group, Amazon India announce strategic e-commerce alliance

Amazon founder Jeff Bezos' recent visit to India is finally yielding some results for the American e-commerce giant.

Kishore Biyani-led Future Group, one of India's largest brick and mortar retailers, on Monday announced it has entered into a strategic alliance with Amazon India to sell its private labels.

While it will start with the fashion category, the partnership will eventually be extended to all other categories. Moreover, Amazon India will also assist Future Group in accelerating new product development in categories that are currently not served by traditional retailers.

Bezos had met Biyani during his recent visit to India.

Future group will use the Amazon platform to sell its private labels like Lee Cooper, Converse, Indigo Nation, Scullers or Jealous21, among others. The company has a portfolio of over 40 brands.

“The bottom line in each of our retail success stories is ‘know your customer’. … Partnership with Amazon, which obsesses to be earth’s most customer centric company, will enable us to leverage their strengths, investments, and innovations in technology to reach out to wider set of consumers across India,” Future Group CEO Kishore Biyani said in a statement.

Amazon India vice president and country manager Amit Agarwal said the tie-up is a “win-win for all”.

Last week Biyani had criticised Flipkart and other e-commerce companies for the deep discounts offered during Diwali sale, which he said will adversely affect other retail channels.

Amazon did not follow the flash sale/discount policy of Flipkart and Snapdeal and went easy when it came to offering discounts during its Diwali sale.

Commenting on the reason for the tie up when the company has its own omni-channel strategy, Biyani said, "The endeavour with external e-commerce platforms is to have exclusive tie-ups with them to push our brands."

Experts say that the association of Future Group with Amazon is crucial in two ways. It marks the entry of one country’s largest brick-and-mortar retailer into pure e-commerce. Also, it is the second after Tata group’s Croma, which entered into strategic alliance with Snapdeal, to sell its products online. Reliance Retail is also set to launch its e-commerce platform but has not partnered any e-commerce player yet.

The move will also be a crucial step for Amazon to grow into the much sought after fashion category. It currently lags behind Flipkart -- which recently acquired fashion e-tailer Myntra.com -- and Snapdeal in the assortment of products, number of sellers and brands etc. Fashion is the focus category for most e-commerce companies because of its high margins and growing demand.

The next category for partnership could be the F&B category. Amazon recently entered into the non-perishable food category -- it has already started accepting bookings for Coco-Cola Zero, the beverage's low-calorie variant -- offering ready to eat food and other products online and Future group has similar plans to expand into the food brands.

Future group is all set to launch Sunkist - a beverage range, and three new foods brands, Karmiq, So Fresh and Veg Affair.

“Each of these will have its own range. Veg Affair will be ready-to-eat frozen vegetables, including peas and carrots. Karmiq is for canola oil and other such products as well as dry fruits," Biyani recently told Business Standard.

Future Group operates some of India’s most popular retail chains including Central, Big Bazaar, Foodhall, Planet Sports, Brand Factory, Home Town and eZone. The group operates around 17 million square feet of retail space in around 98 cities and towns and 40 rural locations across India. The group’s retail formats attract over 300 million customers annually and connect them to around 30,000 small, medium and large enterprises. Amazon started its e-commerce operations in 2013.