“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,” Kishore Biyani, chief executive at Future Group, told the newspaper in an interview.
The deal will reportedly facilitate Future Group´s target of “gross merchandise sales” of 60 billion rupees (1 billion dollars) in three years.
Amazon chooses Future Group to tap fashion market in India
It is worth a note that in India, rules are quite restrictive in terms of allowing foreign retailers to sell directly or to invest on their own into the retail business.
As Amazon is not allowed to sell directly to individual customers even as online retail is set to explode in the country, Future Group - the parent company of a myriad of businesses that sell everything from groceries to fashion apparel – seems to be the best partner for Jeff Bezos´new foray into Asian growing markets.
While it will start with the fashion category, the partnership will eventually be extended to all other categories, reported the ‘Business Standard’. Moreover, Amazon India will also assist Future Group in accelerating new product development in categories that are currently not served by traditional retailers, as advanced by the Indian retailer.
Future Group will utilize Amazon´s platform to sell its private labels like Lee Cooper, Converse, Indigo Nation, Scullers or Jealous21, among others from its 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.
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.
"We are excited to collaborate, leverage each other's unique strengths and serve customers across India. The product portfolio of Future Group, their innate understanding of the Indian consumer mindset and our ability to serve and deliver a convenient, easy, trusted and reliable delivery experience to a nationwide set of customers is a win-win for all," said Amit Agarwal, vice president and Country Manager, Amazon India.
On the wake of the news, 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.