A hostile encounter between the US e-commerce giant and India’s business tycoon.
Who will acquire the pole position?
In 2019, Amazon had sought Competition Commission of India (CCI) for its investment deal worth 1500 crores in Future Coupons. Then indirectly bought around 3.6% stake in Future Retail by acquiring 49% stake in Future Coupons with a plan to buy Kishore Biyani’s flagship company.
But amidst the pandemic, a couple of months ago India’s biggest offline retailer that owns around 11000 stores made an announcement. Reliance Retail was all set to acquire indebted Future Group’s retail, wholesale, logistics and warehouse for $3.4 billion (₹ 24713 crores). Since it doesn’t have a wide online presence this move could probably create a win-win situation for its presence in both online and offline.
After this announcement made by Mukesh Ambani’s Reliance Industries, Amazon the US e-commerce giant filed a complaint and sent a legal notice to Future Group referring to violation of the contract.
It succeeded in fetching an interim stay on Future Group. Singapore International Arbitration Centre (SIAC) passed an order in favour of Amazon that restrains Future Group from selling its business to Reliance Industries led by the world’s 6th wealthiest person.
Jeff Bezos, founder and CEO of Amazon is trying to play a wait game by blocking the way of Ambani’s Reliance Retail’s transaction. Amazon has made huge investments in the Indian market since 2013 as it plays a vital role in Amazon’s growth. However both the wealthiest Men are battling for the pole position in India’s billion plus consumer market.
This temporary relief of Amazon may not last for too long as Reliance claims that it’s deal worth $3.4 billion is fully enforceable under Indian law. Even Future Group says it is not bound by the orders of SIAC. Future Group has already filed caveat in Delhi High court against Amazon in anticipation. Now Future Retail has a tough hurdle ahead to deal with.