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<ul><li>Competition heats up after <keyword id="80487" type="COMPANY" weightage="20" keywordseo="walmart">Walmart</keyword> closes its $16 billion acquisition of <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>.</li><li>Alibaba and <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword> are said to be eyeing large investments of their own.</li><li>Conventional retail and <keyword id="35621" type="PERSON" weightage="20" keywordseo="e-commerce">e-commerce</keyword> players are coming together for a hybrid online-offline business model.</li></ul>A turf war is about to break out among Walmart, Amazon Inc. and <keyword id="163405" type="COMPANY" weightage="20" keywordseo="Alibaba-Group">Alibaba Group</keyword> as the retail giants make aggressive moves to expand into <keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword>. And it is highly likely that this will lead to a massive shakeup of the Indian retail space. Last week, Walmart said it had <a href="https://www.businessinsider.in/indias-competition-regulator-has-given-the-walmart-flipkart-deal-a-greenlight/articleshow/65337242.cms">closed</a> the $16 billion (₹1,118 billion) deal to buy the majority (77%) of Flipkart, India’s largest e-commerce company, following regulatory approval. This is Walmart’s biggest acquisition till date. In its aftermath, Alibaba and Amazon are said to be eyeing large investments of their own, according to media reports. Alibaba is said to be <a href="https://www.livemint.com/Companies/1mvbhDUjZd9khrSUroW5MM/Alibaba-may-invest-5-billion-in-JV-with-Reliance-Retail.html">considering</a> a $5 billion (₹350 billion) investment into a joint venture with <keyword id="58448" type="COMPANY" weightage="20" keywordseo="Reliance-Retail">Reliance Retail</keyword>, India’s largest retailer in terms of sales, in part to take on competition from Amazon and Flipkart. While Amazon, along with co-investors, is mulling an investment in the Aditya Birla Group-owned grocery chain, More, for an enterprise valuation between ₹45 billion and ₹50 billion. Alibaba has reportedly also held talks with other Indian retail chains including Future Retail. In the past few years, Amazon has pumped in over $5 billion into India, its fastest growing market. Amazon and Walmart have been in fierce competition in their home market, the US, for quite some time, while Alibaba and Amazon are head-to-head in China. Some fear that Walmart’s push into India could potentially have an adverse impact on the larger Indian retail space in the long term, particularly on the small brick and mortar retailers in the country. A nation-wide trade lobby group plans to protest the Flipkart acquisition by going on a nationwide strike in the coming months. Currently, over 95% of India’s consumer retail market remains unorganised, representing a huge untapped opportunity for organised retail chains. India has long restricted <keyword id="44749" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Direct-Investment">foreign direct investment</keyword> in multi-brand retail to protect local grocers but allows 100% foreign direct investment in e-commerce companies that use the “marketplace” model. It is currently considering bringing in regulation for the e-commerce space and according to a recent draft proposal, may allow 49% foreign investment in e-commerce companies that use the inventory model. Walmart in its recent statement said its future investments into India will be directed at supporting farmers, supply chain development and reducing food waste. Strategy shift: Going hybrid Walmart’s acquisition of Flipkart and Amazon’s interest in More are the latest examples of large retailers adopting a hybrid business model of offline and online after years of experts predicting the disruption of traditional retail by e-commerce companies. Alibaba and Amazon have recently been focusing heavily on offline and online in their home markets – Amazon with its acquisition of grocery chain Whole Foods and Alibaba’s ‘New Retail’ strategy, which combines e-commerce and conventional retail in China. That rationale appears to be flowing down into their India strategy as well, points out Mrigank Gutgutia, engagement manager with RedSeer Management Consulting. Amazon also owns a 5% stake in Indian brick and mortar retail chain Shoppers Stop. While the Walmart-Flipkart deal is certainly encouraging for e-commerce players, even after 10 years and 100 million shoppers, Indian e-tailers have thus far managed to penetrate only about 2.7% of the overall Indian retail market, indicating the pressure to diversify their reach, notes Gutgutia. “While e-tailers have got their growth mojo back, everyone is starting to realise that pure online models will only let them capture limited pie,” said Gutgutia. “There is a need for change,” he added. Overall, as Indian e-commerce market matures further, e-tailers are realising that pure discount-driven models are no longer going to work. “What is needed is genuine innovation to cater to specific traits and needs of Indian buyers -- especially in offline-heavy categories like fashion and grocery,” said Gutgutia. According to RedSeer, this multi-channel approach will become dominant among organised retail players in the coming years, particularly for e-commerce players. Other e-tailers who have ventured into offline include furniture retailer Pepperfry with its studios and fashion retailer Myntra's Roadster stores. Regardless of how the investment landscape pans out and who buys whom, and as competition gets more intense for existing e-commerce and offline retailers, ultimately shoppers and customers are expected to win. As for small retailers, Gutgutia says they could see a positive impact if they work on a partnership model with organised retailers.

Clash of the titans: Amazon, Walmart and Alibaba to battle it out in India

<ul><li>The Indian government is reportedly planning to revisit plans to crack down on the huge discounts and cashback offers offered by e-commerce companies </li><li>A proposed policy will include online retail giants as well as smaller e-retailers like also food delivery apps. </li><li>The plan is aimed at discouraging ‘predatory pricing’ that impacts traditional retailers. </li></ul>Concerned by ‘predatory pricing,’ the Indian government is reportedly considering a policy to crack down on the strategy of ‘deep discounting’ prevalent among the country’s e-commerce players, the Times of India <a href="https://timesofindia.indiatimes.com/business/india-business/centre-revives-plan-to-check-e-tailers-discounts-freebies/articleshow/67120238.cms">reported</a>. The proposed regulation will regulate the pricing strategy of e-commerce giants like <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>, <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword>, <keyword id="4225623" type="PERSON" weightage="20" keywordseo="Paytm-Mall">Paytm Mall</keyword> but also cover food delivery apps. According to the plan, the policy is aimed at keeping a close check on ‘predatory pricing’ that could potentially disrupt traditional retailers. Online retailers in India have been in stiff competition and many have chosen to offer aggressive steep discounts as a way to attract customers. The e-commerce market is expected to grow to $200 billion in the coming ten years. However, government concerns may be overblown as e-commerce penetration in India is somewhat <a href="https://www.consultancy.in/news/1182/indias-e-commerce-industry-will-break-through-100-barrier-by-2020">limited </a>compared to other markets like China and the US. As of now, the Indian government doesn’t regulate e-commerce companies. Earlier this year, the government mooted a a sunset clause to regulate the pricing strategy of ‘deep discounts’ but the draft wasn’t transformed into policy, according to reports. See also: <a href="https://www.businessinsider.in/airlines-in-india-are-raining-discounts-on-domestic-and-international-flights/articleshow/67060334.cms">Airlines in India are raining discounts on domestic and international flights</a> <a href="https://www.businessinsider.in/dispensed-a-secret-patch-a-31-million-pay-package-and-amazons-ambitions-in-a-300-billion-healthcare-technology-market/articleshow/67098889.cms">Dispensed: A secret patch, a $31 million pay package, and Amazon's ambitions in a $300 billion healthcare-technology market</a>

The Indian government may revisit plans to curb e-commerce discounts: Report

<ul><li>Retail giant <keyword id="80487" type="COMPANY" weightage="20" keywordseo="walmart">Walmart</keyword> has to pay a $282 million for a bribery investigation which involves its business in India, Brazil, China and Mexico. </li><li>Walmart had acquired Indian e-retail unicorn Flipkart in 2018. </li><li>Meanwhile, Uber, too, in its IPO had mentioned that it was being investigated for bribery in several countries including India.</li><li><keyword id="28721" type="CITY" weightage="20" keywordseo="Cognizant">Cognizant</keyword> too had paid a $28 million fine for bribing Indian officials </li></ul>Walmart has gotten into trouble in the US for its business in India. The retail giant has to pay a $282 million fine in the US for a bribery investigation case for Walmart’s business in India, Brazil, China and Mexico. The case relates to Walmart’s businesses in these countries before 2011. “We’re pleased to resolve this matter,” said Walmart President and CEO, Doug McMillon. “Walmart is committed to doing business the right way, and that means acting ethically everywhere we operate. We’ve enhanced our policies, procedures and systems and invested tremendous resources globally into ethics and compliance, and now have a strong Global Anti-Corruption Compliance Program. We want to be the most trusted retailer, and a key to this is maintaining our culture of integrity.” The company’s statement also says that as part of its deal with the <keyword id="118911" type="ORGANIZATION" weightage="20" keywordseo="US-Department-of-Justice">US Department of Justice</keyword> (DOJ), Walmart has also signed a Non-Prosecution Agreement with them which means the DOJ will not prosecute the company in the next 3 years if it complies with the rules. The US-based retail giant had first announced its India entry with its offline signature retail outlets in 2007. While it may not have made a mark back then, it came into the spotlight in 2018 when it acquired Indian e-retail unicorn Flipkart for $16 billion – one of the biggest e-commerce deals in the world. Not the only one However, Walmart is not the first company in the recent times to run into trouble in the US for corruption charges in India. When Uber announced its IPO, its filing in the US mentioned that it is being investigated for “small payments to police in Indonesia and other potential improper payments in other countries” in which it operates or has operated including Malaysia, China, and India. In the past, Cognizant too had paid $28 million in fines to the Securities and Exchange Commission in the US, for bribes paid to Indian officials for building permissions. See Also: <a href="https://www.businessinsider.in/uber-ipo-filing-reveals-it-is-under-investigation-for-improper-payments-in-india/articleshow/68905292.cms">Uber IPO filing reveals it is under investigation for ‘improper payments’ in India</a>

Walmart has to pay $282 million as fine in the US for bribing government officials in India and other countries

It goes unsaid that <keyword id="436047" type="UNKNOWN" weightage="20" keywordseo="Ecommerce">eCommerce</keyword> has changed the way we shop. Capturing that rapidly growing eCommerce market has been somewhat a dream for technocrats and entrepreneurs in India. The country with booming <keyword id="34412" type="ORGANIZATION" weightage="20" keywordseo="economy">economy</keyword>, endless opportunities, ample skilled and educated human resources, rapidly growing market base, and a perfect weather for eCommerce growth – all this and much more has it going for eCommerce growth in India. The Internet penetration, though a lot lesser for a population of 1.2 billion, is promisingly rapid in the recent times. 
 
Though the companies have spent a lot more time trying to sell their concepts and platforms to VCs who have cut the deals for them by investing huge monies, or have helped the idea become bigger and better with their insights; there is one thing for sure. Whether we love it or not, the future for Indian eCommerce is bound to become an example of sorts to the companies worldwide. 
 
Experts forecast that the share of online retail in total organized retail in India will grow from 0.1% to 5.3% into the beginning of the next decade. Online markets will continue to grow in tier II cities and even tier III ones because the tier I cities would have grown moderately saturated by that time. The brand-conscious consumers, who don’t have outlets in their own cities, will help this portion of eCommerce grow well, robustly and rapidly. But, while the future looks bright and beautiful for the eCommerce companies, not all is hunky dory and pink on the horizon that holds their dream future. 
 Could it be an indication that rest of the eCommerce segment concentrated on grabbing consumers through their buying preferences, that Indian ecommerce logistics startup delivery service ‘<keyword id="1560090" type="UNKNOWN" weightage="20" keywordseo="Delhivery">Delhivery</keyword>’ raised $85 million, on round D. This round came in less than eight months after round C which landed them with $ 35 million! 
 
Delhivery currently employs over 10,000 people across 200 cities in the country through its 11 ‘fulfillment’ centres covering more than a million sq ft of warehouse space. The company claims to be India’s top ecommerce fulfillment company, which processes over three million transactions every month, for 70,000 merchants and 1,500 eCommerce companies, along with 200 offline retailers. 
 
Delhivery is among many companies that are harnessing the vacuum created by logistics-dependent ecommerce companies. 
 
Today, as eCommerce companies get their parachutes ready to jump into the market, there are some crucial aspects that stare at them in their future together. Logistics is probably the most important aspect that needs to be paid attention to, by companies that are aiming at harnessing the ecommerce potential. 
 
Inadequate warehouses, poor tracking systems, lack of skilled and reliable workers, and limited cargo options are leaving a dent on the future of eCommerce in India because Indian eCommerce shopping experience is said to be way too low when compared to the US and China. Now, having said that, India needs to focus on making this system better only so that the space for eCommerce expands in India rather than contracting. 
 
This month, Indian e-retailer Myntra has taken a rather bold decision that it would only exist on mobile platform. It makes sense in some manner that the companies are willing to experiment and leave crucial lessons behind for consumer behavior, but what can never be undone would the wrath of a scorned customer. There are people who have done high-end shopping on the Internet and have been left desiring for more. Phones, laptops among high end gadgets somehow mysteriously disappear, and the customer finds it hard to interact with the company to get a replacement. More often than not, these are not replaced. 
 
When the news spills out on social media, it does more harm and raises a question on the reliability factor of the brand name. Though India has long replaced US as the second highest nation with Internet penetration, only half a percent of nation’s retail comes from the Internet. This number has to be pushed and prodded for better growth. With no efficient delivery system in place, the companies often take it easy so that they don’t earn a customer’s wrath after overpromising. 
 
Unprecedented high volume of goods move around festive times, especially around Diwali when the culture of exchanging gifts gets a revival. But to depend only on air cargo hurts the chances of ecommerce companies. 
 
Apart from logistics, the industry for its growth needs to have some indication of customer loyalty. As of now, that comes at a premium, and since most eCommerce companies present similar shopping experiences except for the niche market they are dealing with, a customer will always be spoilt for choices. A lesson in this chapter would do a lot better for the companies than having to shoot in the dark and hope to hit the goal.

Road ahead: eCommerce will have to face serious challenges

<ul><li>Morgan Stanley has warned that Walmart may exit from Flipkart. </li><li>India’s new e-commerce rule brought in tighter FDI guidelines in order to boost Indian marketplaces. </li><li>Under new rules, Flipkart will have to do away with 25% of its products on the platform.</li></ul>Walmart’s biggest ever deal in history could soon be a thing of the past. Walmart’s acquisition of Indian unicorn Flipkart for $16 billion was one of the world’s biggest e-commerce deals. It now stands in jeopardy as the retail giant could make an exit from Flipkart in the wake of India’s <keyword id="7170085" type="UNKNOWN" weightage="20" keywordseo="new-e-commerce-rules">new e-commerce rules</keyword>, according to a report by <a href="https://economictimes.indiatimes.com/industry/services/retail/morgan-stanley-warns-walmart-may-exit-flipkart-post-new-fdi-rules/articleshow/67843595.cms">Morgan Stanley</a>, which said an exit by Walmart is not out of the question with the Indian e-commerce market becoming “more complicated.” “Despite the recent changes in regulations, we remain optimistic abo the ecommerce opportunity in India given the size of the market, the low penetration of ecommerce in the retail channel and the pace at which it is growing. As Walmart scales in India, the company will continue to partner to create sustained economic growth across agriculture, food and retail. Future investments will support national initiatives and will bring sustainable benefits to the country,” a Walmart spokesperson told <a href="https://economictimes.indiatimes.com/industry/services/retail/morgan-stanley-warns-walmart-may-exit-flipkart-post-new-fdi-rules/articleshow/67843595.cms">ET.</a> India’s new e-commerce rules have introduced tighter guidelines that govern Indian e-commerce companies. With the new rules, global players like Amazon or the Walmart-Flipkart entity, are barred from selling products from vendors they have own a stake in. According to the Morgan Stanley report, Flipkart will have to do away with 25% of its products on the platform. The new rules have mounted tremendous pressure on both Amazon and Flipkart, which together command over <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/amazon-india-reportedly-closing-in-on-flipkart/articleshow/63407725.cms">60%</a> of the market share in Indian e-commerce. According to a report in <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/amazon-flipkart-sales-fall-a-third-as-fdi-norms-kick-in/articleshow/67826139.cms">ET</a>, Amazon and Flipkart saw a third of their sales volume disappear in just three days, after the new rules came in. Last week, Amazon <a href="https://www.businessinsider.in/amazon-india-finds-way-around-new-e-commerce-rules-for-cloudtail-and-appario/articleshow/67831376.cms">reportedly</a> already began removing several items from its website sold via its vendor Cloudtail including products under the brand name “Amazon Basics”. Walmart which has <a href="http://fortune.com/2018/02/20/walmart-ecommerce-3/">failed</a> to make an impact on e-retail globally, had placed its bets on Flipkart to start off its digital wing. Flipkart being one of the biggest e-commerce platforms of India, put Walmart in direct competition with Amazon. However, with the change in scenario it is possible that Walmart might not want to incur a <a href="https://www.bloombergquint.com/technology/walmart-expects-flipkart-to-suffer-rs-5300-crore-loss-this-year#gs.JsJmhTUD">loss</a> in India. See Also: <a href="https://www.businessinsider.in/amazon-india-finds-way-around-new-e-commerce-rules-for-cloudtail-and-appario/articleshow/67831376.cms">Amazon may have found a way around India’s new e-commerce rules</a> <a href="https://www.businessinsider.in/amazon-and-walmart-which-owns-flipkart-stocks-on-sale-as-indias-new-e-commerce-policy-kicks-in/articleshow/67807890.cms">The sale on Amazon and Walmart stocks in US may worsen as new India's e-commerce rules kick in</a> <a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms">Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart</a>

Walmart could exit from Flipkart because of India’s new FDI rules: Report

Offline retailers want a level playing field. They want 100% FDI in place of the current 51%. They reason that the current rate was fixed to only save small retailers. However, these sellers are anyway facing competition from e-commerce sites. 
 
The Retailers Association of India (RAI), the apex body for offline retailers has recently filed a petition in the Delhi High Court asking for uniform FDI provisions for online retailers. 
 
The current FDI policy for offline retailers comes with strings attached. They need minimum $100 million backend investment and 30% sourcing from small enterprises. State-by-State approvals are required, and FDI is only permitted in cities with a population of over 1 million. Most retail experts feel India needs less regulations, not more. 
 
“There has been the wrong discussion for far too long in India– the ownership of retail. It should be on how to make retail distribution more efficient so that transaction costs are reduced. The government should attract global investment to promote made in India products in the global market”, says Mr. Arvind Singhal, Chairperson of Management Consulting Firm Technopak. 
 
The Indian retail scenario is rapidly changing. E-commerce is biting into revenues of traditional retailers both in urban and rural sectors. This has been fuelled by increased consumer spending due to economic growth and lower inflation. Is it going to be that way? 
 
“Technology allows you to disintermediate. The prospect of having a physical store in rural India is not viable due to the limited number of customers. The only way there is e-commerce”, Singhal observes. 
 
So is this the end of offline retail? Not quite. Most experts feel competition is one of the hallmarks of any healthy market, and with growing competition, both online and offline retailers would have to evolve. It’s true. Most e-commerce companies want physical footprint, either for sales or support. Brick-and-mortar retailers are online as well. 
 
Would large scale foreign investment do away with smaller Indian retailers? Experts beg to differ. 
 
“There is no competitive advantage foreign companies enjoy over Indian sellers. They buy from the same vendors. There shouldn’t be fear in inviting international retailers who would ‘destroy’ manufacturers in India”, Singhal reminds. 
 
So what’s the USP of Brand India now that Modi is desperately pushing the ‘Make in India’ campaign across the globe? Well, India is one of the larger economies in terms of consumer spending. It has a fairly large youth population willing to spend big moolah. If the economy grows at 7-8%, the Indian market will double in the next decade; the country will remain a reasonably attractive country to invest in. 
 
To sum up, it’s party time both for investors and consumers. The former has buyers lined up, the later has a plethora of options on the table to choose from. 
 
(Image credit: SunrisePOS and pfsweb)

Allow entry to WalMart and let Flipkart and Amazon fight it
out with Reliance Retail and Big Bazaar

<ul class="summary-list"><li>This is an excerpt from a story delivered exclusively to Business Insider Intelligence Payments &amp; Commerce subscribers. </li><li>To receive the full story plus other insights each morning, <a href="https://www.businessinsider.com/intelligence?IR=T&amp;itm_source=businessinsider&amp;itm_medium=content_marketing&amp;itm_campaign=briefing_post&amp;itm_content=top_text&amp;itm_term=bundle_subscription_text_link-amazon-makes-brick-and-mortar-play-in-india-2019-8">click here.</a></li></ul>The Seattle-based e-tailer has acquired a 49% share of Future Coupons, which handles digital payments for Indian <keyword id="6354851" type="UNKNOWN" weightage="100" keywordseo="retail">retail</keyword> operator Future Retail, per <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cud3NqLmNvbS9hcnRpY2xlcy9hbWF6b24tZGVhbC1vcGVucy1kb29yLXRvLWJpZ2dlci1mb290cHJpbnQtaW4taW5kaWEtMTE1NjY1NDQwODA/5d233c18f730436f2414784fBf71f8e00" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cud3NqLmNvbS9hcnRpY2xlcy9hbWF6b24tZGVhbC1vcGVucy1kb29yLXRvLWJpZ2dlci1mb290cHJpbnQtaW4taW5kaWEtMTE1NjY1NDQwODA/5d233c18f730436f2414784fBf71f8e00&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNE1cpoofz9Z7PlMSupW8CcCFgAZRw">The Wall Street Journal</a>. <div class="KonaFilter image-container display-table float_right no-rightrail"><div><div class="image"></div></div></div>Future Coupons is "developing innovative value-added payment products and solutions such as corporate gift cards, loyalty cards, and reward cards primarily for corporate and institutional customers," an Amazon spokesperson told <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly90ZWNoY3J1bmNoLmNvbS8yMDE5LzA4LzIyL2FtYXpvbi1mdXR1cmUtY291cG9ucy8/5d233c18f730436f2414784fB25d25e3d" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly90ZWNoY3J1bmNoLmNvbS8yMDE5LzA4LzIyL2FtYXpvbi1mdXR1cmUtY291cG9ucy8/5d233c18f730436f2414784fB25d25e3d&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNH3H4qHdz9u7RWWfcNkyMGyHYWnSw">TechCrunch</a>, but the acquisition may serve as a stepping stone to a greater investment in Future Retail.The deal gives Amazon around half of Future Coupons' 7.3% stake in Future Retail and, after three years, the opportunity to acquire part or all of the share currently owned by Future Retail's founding family, which is worth over 40% of the company. Future Retail is likely an appealing investment for Amazon as it operates over 2,000 stores, including hypermarkets and supermarkets, in more than 400 cities in India.Here's what it means: Investing in Future Retail enables Amazon to work with its brick-and-mortar network, which could help it boost its performance in India.<ul><li>The deal will reportedly see Amazon sell Future Retail's brands on its marketplace and use its stores for grocery deliveries. Adding brands familiar to Indian consumers to its marketplace could convince some shoppers to come to Amazon for the first time. And utilizing Future Retail's sprawling brick-and-mortar network for grocery delivery could speed up the delivery times of Amazon's offerings, potentially attracting new users.</li><li>Building a stronger brick-and-mortar connection could help Amazon build Indian consumers' trust in e-commerce, allowing the e-tailer to capitalize on the market's potential. Just 25% of Indian internet users had purchased a product online in the previous three months according to a 2018 <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cub21pZHlhci5jb20vc2l0ZXMvZGVmYXVsdC9maWxlcy9VbmxvY2tpbmclMjBEaWdpdGFsJTIwRm9yJTIwQmhhcmF0X0ZpbmFsLnBkZg/5d233c18f730436f2414784fB3c7e89b5" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cub21pZHlhci5jb20vc2l0ZXMvZGVmYXVsdC9maWxlcy9VbmxvY2tpbmclMjBEaWdpdGFsJTIwRm9yJTIwQmhhcmF0X0ZpbmFsLnBkZg/5d233c18f730436f2414784fB3c7e89b5&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNG6gag-9fTuZp_CHKIX-9PZ6kyiIg">report</a> from Bain &amp; Company, Google, and Omidyar Network. Even if e-commerce has grown more popular in the past year in India, internet users' top reasons for not shopping online - a lack of trust and no opportunity to touch and feel products - likely remain. To alleviate some of these concerns, Amazon could offer buy online, pickup in-store (BOPIS) services at Future Retail locations. This could encourage customer loyalty and enable Amazon to capture more of the Indian e-commerce market, which is <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cuaWJlZi5vcmcvaW5kdXN0cnkvZWNvbW1lcmNlLmFzcHg/5d233c18f730436f2414784fB4b79740a" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly93d3cuaWJlZi5vcmcvaW5kdXN0cnkvZWNvbW1lcmNlLmFzcHg/5d233c18f730436f2414784fB4b79740a&amp;source=gmail&amp;ust=1566994887690000&amp;usg=AFQjCNHAqk6tOzyi-7ah_9_sab-t6EVCfQ">projected</a> to surge from $38.5 billion in 2017 to $200 billion in 2026.</li></ul>The bigger picture: The Indian government's <a href="https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly9pbnRlbGxpZ2VuY2UuYnVzaW5lc3NpbnNpZGVyLmNvbS9wb3N0L3dhbG1hcnQtZmFjaW5nLW9ic3RhY2xlcy1vdmVyc2Vhcy0yMDE5LTI/5d233c18f730436f2414784fB9edf6948" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://e.businessinsider.com/click/17881044.3/aHR0cHM6Ly9pbnRlbGxpZ2VuY2UuYnVzaW5lc3NpbnNpZGVyLmNvbS9wb3N0L3dhbG1hcnQtZmFjaW5nLW9ic3RhY2xlcy1vdmVyc2Vhcy0yMDE5LTI/5d233c18f730436f2414784fB9edf6948&amp;source=gmail&amp;ust=1566994887691000&amp;usg=AFQjCNE_C5mPhgueenALniF3MRvp3PxX0w">rules</a> regarding companies with foreign investment complicate the future of this investment.India's federal direct investment regulations restrict the actions foreign companies can take in the country, likely limiting what actions Amazon can take with Future Retail. The regulations impact firms' abilities to sell products through other companies they own, which could be a problem for Amazon as it adds a stake in Future Retail.Once the initial three years have passed, Amazon has a seven-year window to acquire a significant share of Future Retail, and it may be hoping to wait out these regulations before pushing forward with Future Retail.Interested in getting the full story? Here are three ways to get access: <ol><li>Sign up for Payments &amp; Commerce Pro, Business Insider Intelligence's expert product suite keeping you up-to-date on the people, technologies, trends, and companies shaping the future of consumerism, delivered to your inbox 6x a week. &gt;&gt; <a href="https://www.businessinsider.com/intelligence/payments-and-commerce-pro?IR=T&amp;itm_source=businessinsider&amp;itm_medium=content_marketing&amp;itm_campaign=briefing_post&amp;itm_content=get_started_text&amp;itm_term=bii_briefing_text_link-amazon-makes-brick-and-mortar-play-in-india-2019-8&amp;vertical=payments-and-commerce">Get Started</a></li><li>Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Payments &amp; Commerce Briefing, plus more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. &gt;&gt;<a href="https://www.businessinsider.com/intelligence?IR=T&amp;itm_source=businessinsider&amp;itm_medium=content_marketing&amp;itm_campaign=briefing_post&amp;itm_content=learn_more_text&amp;itm_term=bundle_subscription_text_link-amazon-makes-brick-and-mortar-play-in-india-2019-8">Learn More Now</a></li><li>Current subscribers can read the full briefing <a href="https://intelligence.businessinsider.com/post/amazon-eyes-physical-retail-in-india-grab-to-invest-several-hundred-million-dollars-in-vietnam-key-us-congressperson-still-concerned-about-facebooks-libra-2019-8">here.</a></li></ol><a href="https://www.businessinsider.com/intelligence/payments-and-commerce-pro?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_subscription&amp;itm_content=ecommerce&amp;itm_campaign=payments-and-commerce-pro"></a>

Amazon is aligning itself with Indian retail operator Future Retail

<ul><li>American online retail firm <keyword id="6357395" type="UNKNOWN" weightage="20" keywordseo="eBay">eBay</keyword> has bought a 5.5% stake in <keyword id="4225623" type="PERSON" weightage="20" keywordseo="Paytm-Mall">Paytm Mall</keyword>. </li><li>Vijay Shekhar Sharma owned Paytm Mall hopes to turn profitable in the next two years. </li><li>However, this isn’t eBay first bet on Indian e-commerce, its previous two – <keyword id="541988" type="COMPANY" weightage="20" keywordseo="SnapDeal">Snapdeal</keyword> and <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword> – failed to work out for the company.</li></ul>American e-commerce giant eBay has <a href="https://www.livemint.com/companies/news/ebay-logs-into-paytm-mall-with-5-5-stake-eyes-pie-of-online-retail-1563420493902.html">bought</a> a 5.5% stake in Paytm Mall, Vijay Shekhar Sharma’s new e-commerce vertical. While the details of the transaction remain undisclosed, <a href="https://yourstory.com/2019/07/paytm-mall-funding-ebay-ecommerce-india-vijay-shekhar-sharma">reports</a> say that the American firm is pumping in about $170 million into Paytm Mall at a valuation of $3 billion. Paytm Mall, the e-commerce subsidiary of One97 communications which owns Paytm, aims to turn profitable in the next two years. The company said that it reduced its monthly spends by ₹400 million, is targeting an EBITDA breakeven by 2021-22. EBIDTA is earnings before interest, depreciation, tax and amortization. The company ended the last financial year with a Gross Merchandising Value (GMV) of ₹130 billion and is now aiming for ₹170 billion GMV by 2022. However, what’s interesting is eBay’s India growth trajectory. It had entered the Indian market in 2004, much before e-commerce really took off in the country. However, it has struggled to gain ground. eBay’s first invested in Indian e-commerce was in <a href="https://www.thenewsminute.com/article/ebay-takes-61-million-hit-snapdeal-writes-investment-76169">Snapdeal</a> which resulted in a $61 million loss. After the disappointment, eBay moved to the Indian e-commerce success story Flipkart, where eBay sold its India operations to Flipkart in 2017. However, within a year, Flipkart shut down the operations of eBay. When the Indian retail unicorn was acquired by global giant Walmart, eBay sold its stake in Flipkart for $1.1 billion.

eBay is trying to get third-time lucky with Paytm Mall after burning hands with Flipkart and Snapdeal

<ul><li>India’s new e-commerce rules may be a setback for global players like Amazon and Flipkart. </li><li>The biggest beneficiary will be large Indian retailers and the largest of them all is Mukesh Ambani’s Reliance Retail. </li><li>While his physical stores benefit from less pricing pressure, his e-tail venture will get a level playground to fight established giants, at no extra cost. </li></ul>E-commerce in India is gearing up for some <a href="https://www.businessinsider.in/indias-new-e-commerce-policy-has-rivals-flipkart-and-amazon-teaming-up-to-counter-the-new-directive-and-the-republic-day-sale-will-probably-be-their-last/articleshow/67366996.cms">massive changes</a> from February 1. Foreign e-commerce players — like Amazon and Flipkart — will no longer be able to offer consumers ‘deep discounts’ or sell their own brands through their respective platforms. It’s a big blow to Jeff Bezos’ and Walmart, and not the best news for consumers in India. Local vendors are voicing their support for the new policy, hoping they can regain some market share, without having to lose more money by offering discounts. 
	
	
	
	
	
	<div type="twitter" handle="1kunalbahl" handlename="Kunal Bahl" image="http://pbs.twimg.com/profile_images/785022133860638720/pBp2lRBx_normal.jpg" favoritecount="99" retweetcount="31" status=".@Snapdeal welcomes updates to FDI policy on e-commerce. Marketplaces are meant for genuine, independent sellers, m… https://t.co/aQ8H4LDw13" createdat="1545832500000" id="1077925752090300416"></div>













 However, the biggest beneficiary of the new policy may not be a broke Snapdeal or the now-jaded Shopclues. It is likely to be India’s <a href="https://www.businessinsider.in/e-commerce-wars-amazons-jeff-bezos-vs-mukesh-ambani-in-india/articleshow/67620116.cms">largest retail chain operator</a> Reliance Retail, owned by Mukesh Ambani — the richest man, not only in India, but in Asia. The facts Physical retailers — with the brick-and-mortar stores— are the immediate benefactors. The new rules are expected to boost sales for offline vendors by taking away the discounts available to consumers online. CRISIL estimates that it could increase revenue for offline retailers by ₹100 billion to ₹120 billion by 2020. Just as the loss of business for e-commerce is the gain for retail chains, the advantage is usually with the larger players in the space — because of the sheer scale, reach and resources at their disposal. And the largest of them all is Reliance Retail. “The impact on e-tailers would be largely in the electronics and apparel segments, which account for a bulk of their revenues,” says Anuj Sethi, the senior director at CRISIL Ratings. Coincidentally, 34% of Reliance Retail’s revenue comes from its electronics arm — Reliance Digital. It’s also the largest holder of foreign brand licences for apparel in India. Some of its top brands include Diesel, Hamleys, Kenneth and Steve Madden. Reliance Retail’s offline avatar served 3.5 million customers a week through 9,146 stores across 5,800 cities as of September 2018. Brokerage house CLSA further estimates that the company’s revenue may grow nearly 12-fold to $138 billion in the next 10 years. 
 
 
 
 
 
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 If CLSA’s estimate were to come true, Reliance Retail alone will be making over a quarter of all revenue from retail — both online and offline — in India, expected at about $550 billion, in the next decade. The timing There is no doubt that online retail still has a lot of potential in India. Nasscom and PricewaterCoopers (PwC) estimate that the market will balloon to $150 billion by 2022. Online players still make for <a href="https://www.livemint.com/Industry/9iUxlQZ4iHwPiXRKscx3LK/Indias-ecommerce-market-to-grow-30-to-200-billion-by-202.html">only</a> 3% of the total retail market in India, and the prospects are still huge. So for Mukesh Ambani, as the chairman of Reliance Industries, it’s an unavoidable opportunity. One part of Reliance Retail— the apparel brand Ajio — is already online. Now, he is looking to expand the offerings beyond apparel, with a pilot programme in the state of Gujarat. Before Ambani’s entry, Amazon had <a href="https://www.businessinsider.in/amazon-takes-the-fight-to-walmart-by-investing-another-27-billion-in-india/articleshow/65404423.cms">invested over $4.7 billion</a> in India over the last six years, primarily because it identified the potential of a market with a population of nearly a billion and half people. For the same reason, <a href="https://www.businessinsider.in/indian-unicorn-flipkarts-board-approves-15-billion-deal-with-walmart/articleshow/64027810.cms">Walmart bought Flipkart</a> in 2018 for a whopping sum of $15 billion, paying a heavy premium for joining the game late. Over the years, Amazon, Flipkart and other early birds have burnt billions of dollars giving discounts, getting people used to shopping online and creating a market. Then, the government revised its policy on foreign direct investment (FDI) in e-commerce on December 26, 2018, changing the rules of the game, which would bring the likes of Amazon and Walmart on a level playing field with new entrants. Less than a month later, Mukesh Ambani took the stage at the investor summit Vibrant Gujarat and unveiled his plan to expand his online retail business. The government’s new e-commerce rules are essentially trying to protect India’s retailers — including Reliance Retail — from the deep discounts offered by e-commerce giants. That is how Ambani’s physical stores gain. What’s more, as a new entrant to e-commerce, going against established players with equally deep pockets, Ambani will not have to burn money through discounts. In fact, he is not allowed to. He gets a level-playing field to fight established giants like Amazon and Walmart-owned Flipkart, at no extra cost. The spin Ambani had his own spin on why the change in rules was justified. "In this new world, data is the new oil. And data is the new wealth. India's data must be controlled and owned by Indian people and not by corporates, especially global corporations,” Ambani said at the Vibrant Gujarat Summit in January 2018. He was alluding to the fact that two biggest e-commerce companies in India are owned by foreigners, and they have access to priceless data on Indian consumer behaviour. Even people from the government echoed the ‘nationalistic’ spin to the story that Ambani offered. “We don’t want to build walls, but at the same time, we explicitly recognize and appreciate that data is a strategic asset,” Aruna Sundararajan, the nation’s secretary of telecommunications said last year at a press conference. The other view can be equally convincing to Ambani’s critics. John Elliott, the author of “Implosion: India’s tryst with reality” begs to differ. “The idea that Reliance is any safer at protecting Indian people’s data than Amazon or Walmart is ludicrous,” Elliott told Business Insider. See also: <a href="https://www.businessinsider.in/indias-new-e-commerce-policy-has-rivals-flipkart-and-amazon-teaming-up-to-counter-the-new-directive-and-the-republic-day-sale-will-probably-be-their-last/articleshow/67366996.cms">India’s new e-commerce policy has rivals Flipkart and Amazon teaming up to counter the new directive — and the ‘Republic Day’ sale will probably be their last</a> <a href="https://www.businessinsider.in/the-indian-government-just-dealt-a-serious-surprise-to-amazon-and-flipkart-heres-what-that-means-for-online-shoppers/articleshow/67272151.cms">The Indian government just dealt a serious surprise to Amazon and Flipkart — Here’s what that means for online shoppers</a> <a href="https://www.businessinsider.in/e-commerce-wars-amazons-jeff-bezos-vs-mukesh-ambani-in-india/articleshow/67620116.cms">Amazon's newest challenger may be the richest man in Asia</a>

Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Chip Somodevilla / Getty Images</div></div></div><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/amazon">Amazon</a> is close to purchasing a 10% stake in Indian <keyword id="6354851" type="UNKNOWN" weightage="60" keywordseo="retail">retail</keyword> giant Future Limited Retail, according to <a href="https://www.bloomberg.com/news/articles/2019-08-13/amazon-is-said-near-deal-for-up-to-10-of-india-s-future-retail">Bloomberg</a>. </li><li>The deal would mark another sign that Amazon is looking to expand in India following a report that it's planning to purchase a 26% stake in Indian retailer Reliance Retail.</li><li>Future Limited Retail operates a supermarket chain in India called Big Bazaar, which would also signify another push by Amazon into the grocery market.</li><li><a href="https://www.businessinsider.com/">Visit Business Insider's homepage for more stories. </a></li></ul>Amazon is eyeing a 10% stake in Indian retail giant Future Retail Limited, according to a new report from <a href="https://www.bloomberg.com/news/articles/2019-08-13/amazon-is-said-near-deal-for-up-to-10-of-india-s-future-retail">Bloomberg</a>. The Seattle-based e-commerce behemoth is reportedly in late-stage talks with Future, which is said to be seeking a valuation of $281 million, or 20 billion rupees. Future's portfolio includes more than 1,534 retail locations in more than 400 cities and towns in India across several different chains, including its Big Bazaar supermarkets among other food, home, and lifestyle brands. Such a deal would be the latest sign that Amazon could be looking to push deeper into India, which is expected to host an e-commerce market that could be worth $200 billion by 2026 according to the <a href="https://www.ibef.org/industry/ecommerce.aspx?utm_source=Triggermail&amp;utm_medium=email&amp;utm_campaign=Post%20Blast%20%28bii-e-commerce%29:%20Amazon%20trying%20to%20expand%20its%20reach%20in%20India%20%7C%20Digital%20will%20impact%2058%25%20of%20sales%20by%202023%20%7C%20New%20e-commerce%20law%20comes%20into%20effect%20in%20China&amp;utm_term=BII%20List%20E-Comm%20ALL">India Brand Equity Foundation</a>.Earlier this month, for example, Indian newspaper <a href="https://economictimes.indiatimes.com/industry/services/retail/amazon-may-shop-for-stake-in-reliance-retail/articleshow/70474456.cms">The Economic Times</a> reported that Amazon was planning to purchase <a href="https://www.businessinsider.com/amazon-in-talks-to-buy-stake-india-reliance-retail-2019-8">a 26% stake in Reliance Retail</a>, one of the country's largest brick-and-mortar retailers.Read more: <a href="https://www.businessinsider.com/amazon-tiny-home-expands-with-remote-control-2019-8">Amazon sells a $37,000 tiny home that expands with the click of a remote - here's what it looks like inside</a>Expanding in India could be critical for Amazon after one of its biggest rivals, Walmart, purchased a controlling stake in Indian e-commerce giant Flipkart <a href="https://markets.businessinsider.com/news/stocks/walmart-flipkart-acquisition-phonepe-subsidiary-unexpected-10-billion-valuation-2019-7-1028347399">for $16 billion last year.</a>Amazon did not immediately respond to Business Insider's request for comment. The reported discussions about acquiring a stake in the company behind one of India's prominent supermarket chains also comes as Amazon is said to be deepening its presence in the grocery space. The company is considering <a href="https://www.businessinsider.com/amazon-to-launch-new-grocery-stores-separate-from-whole-foods-2019-7">a new grocery chain</a> that would remain separate from Whole Foods, which it acquired in 2017 for $13.7 billion, according to reports from <a href="https://www.wsj.com/articles/amazon-to-launch-new-grocery-store-business-sources-say-11551461887">The Wall Street Journal</a> and <a href="https://www.nytimes.com/2019/07/28/technology/whole-foods-amazon-grocery.html">The New York Times.</a>This new supermarket could combine in-store shopping with online ordering, as the Times reports. Amazon could open the first store in its new chain of grocery markets in Los Angeles as soon as the end of the year, according to the Journal. The Journal, however, does not indicate whether this store will combine physical and online retail as described in the Times' report. <a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=amazon&amp;itm_campaign=40-big-tech-predictions-for-2019-2"></a> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/better-way-recycling-plastic-environment-reuse-sustainable-upcycling-2019-8">This company turns shredded plastic and clothing into new bottles for Pepsi, Evian, and Coca-Cola</a></h3> <div> </div> </div>

Amazon is reportedly close to buying a 10% stake in one of India's largest retailers, and it could be another sign that it's making a big push into the country

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