A US footwear brand has bagged a deal in India that Amazon wanted

• Skechers buys 49% stake in Indian retail joint venture with Future Group.
• Amazon had reportedly signed a term sheet last year for a proposed stake purchase in Kishore Biyani's venture.
• Amazon and Future Group had put talks on hold as new e-commerce rules kicked in February 2019.

Amazon was reportedly in talks to buy stake in one of India's leading retail chains, the Future Group. Tripped by the new e-commerce rules brought in by the Indian government, the two companies put those negotiations on hold.

However, within a couple of weeks, Future Group's Kishore Biyani has found another keen buyer, the American footwear brand, Skechers. Biyani reportedly sold his 49% stake in the existing joint venture to Skechers for a sum of ₹5.8 billion.

Skechers now plans to open 80-100 more stores, of which the company will directly own 20 stores.

Amazon had signed a term sheet to buy anywhere between 10% and 15% stake in Future Group for up to $700 million in August 2018. In September last year, Amazon along with PE firm Samara Capital signed a deal to acquire food and grocery retail chain More. Less than a year before that, the Jeff Bezos-led firm had bought 5% stake in Shoppers Stop for $26.35 million.

Physical retailers are the immediate benefactors India's new e-commerce rules. The new norms are expected to boost sales for brick-and-mortar stores by taking away the discounts available to consumers online. CRISIL has estimated that it could increase revenue for offline retailers by ₹100 billion to ₹120 billion by 2020.

The promise of India's retail market is no secret to other companies either. “Few markets match the potential for growth like India does, which is why we entered the market initially, and recently decided to buy the minority stake in our joint venture,” said David Weinberg, chief operating officer of Skechers.

For Amazon, the challenges in India are only rising. The company had to add new sellers and delist about 500,000 products from its sellers Cloudtail, Appario and Shoppers Stop as the govt prohibited online marketplaces from selling products through companies in which they own stakes. As Amazon went back to the drawing board, Skechers swept away the deal.

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