Indian conglomerate Reliance Industries Ltd is acquiring the retail, wholesale and logistics businesses of the Future Group for US$3.38 billion, the oil-to-telecoms giant announced late on Saturday, strengthening its presence in the country’s hugely competitive e-commerce sector.
Reliance, which is owned by Asia’s richest man, Mukesh Ambani, has been locked in battle with US tech behemoth Amazon.com Inc and Walmart Inc-backed Flipkart for a share of India’s lucrative online market, establishing its digital platform JioMart in May.
After spending years battling local mom-and-pop shops for customers, the online retailers are now trying to work hand-in-hand with the smaller stores that dominate India’s towns and hinterlands to bring them online.
Future Group owns some of the country’s best-known supermarket brands, such as Big Bazaar, but its founder Kishore Biyani, once known as India’s retail king, has struggled in recent years, with the COVID-19 pandemic dealing a heavy blow to his empire.
Ambani’s daughter, Isha, director of Reliance’s retail subsidiary Reliance Retail Ventures Ltd, said the deal would give a big boost to India’s retail sector and was “a strong strategic fit” for her company.
“We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants ... as well as large consumer brands,” she said in a press release.
“This will help Reliance Retail to accelerate providing support to millions of small merchants in increasing their competitiveness and enhance their income during these challenging times,” she added.
The acquisition would bolster Reliance’s presence, adding another 1,800 stores to its retail portfolio, which already covers about 11,000 stores in more than 6,700 towns and cities, including wholesale operations.
“Future Group is strong on two fronts — groceries and apparel — and Reliance can leverage these and add to its strength,” Forrester Research senior forecast analyst Satish Meena said.
The deal would allow Reliance “to combine inventory, stores and customers to deliver an online-offline hybrid experience,” he said.
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