‘Amazon investment in Shoppers Stop is pure financial deal’

E-commerce biggies are gearing up to get a 2nd spherical of festive income primary nearly Diwali. Flipkart, that’s probably to obtain racked up $700-800 million in gross product sales in the fiveday Big Billion Times (BBD), has chose to increase its sale by another 7 days till October 1, according to some organization conversation to its sellers.Gross profits are the all round product sales on a web-based marketplace, with no factoring the savings and returns.
The two Flipkart and Amazon will maintain an additional large sale occasion closer to Diwali, similar to preceding decades as several customers hold off their festive purchases until Dhanteras. Flipkart informed its merchants, “Festive year just isn’t over but, numerous a lot more gross sales to return. Kindly opt in for festive provides.”
Flipkart’s arch rival Amazon
much too despatched an e mail to sellers, asking them to be well prepared for one more sale in the 1st week of October whenever they experienced skipped out over the just concluded sale. Amazon communicated to its sellers they need to focus on adding provides across types from the run-up to Diwali.
Amazon’s first investment in a brickand-mortar retailer in the country should not be considered a back-door entry by a foreign retailer into multibranded retailing, according to Shoppers Stop which has agreed to sell 5% stake to an investment arm of the US based online giant. “It’s a financial investment and the investor has no say on the company’s day to day operations,” said Govind Shrikhande, MD at Shoppers Stop while interacting with Sagar Malviya.
Edited Excerpts:
Don’t you believe that Amazon is using Shoppers Stop as the vehicle for a back-door entry into multi-brand retailing?
The proposed investment will be made by Amazon’s investment arm. Shoppers Stop has always been, and will continue to be, wholly compliant with all FDI norms and regulations. As far as we are concerned, if we get funds to drive our brick and mortar growth faster then why not? From a partner or a player whose other business is the largest retail company in the world then why not.
The investment arm has invested in multiple companies. This is purely a financial investment. After the commercial agreement this is a great marriage of two existing players – one in the online and other offline – to really drive omni-channel. All action has to really happen at the retail front where investment has nothing to do with it.
Where will you use the funds raised? Did you consider other instruments to raise money? Were you in talks with other investors too?
We will continue to focus on our growth of brick-and-mortar and online stores to drive an omnichannel experience for our customers.
So, the investment will be used to fund capital expenditure, working capital requirements & general corporate purposes to augment our business. We do get offers from investors from time to time.
During negotiations, did you fear a potential hostile takeover possibility by Amazon after few months or years?
Fundamentally, there are no hostile takeovers and investment companies don’t do hostile takeovers because somebody has to run it.
Can we expect Shoppers Stop private labels to sell outside India through Amazon?
Yes. This is a big opportunity to cater to the Indian diaspora across the world. We have started the process to register our private brands as far as the US market is concerned. But we also need to work on the logistics, especially for handling issues such as returns after we ship the products.
Two weeks ago, we listed two private brands – Stop and Kashish – in the US at Amazon.com. It’s too early to comment on it.
How do you plan to leverage Amazon’s partnership in terms of data mining, merchandise stocking and understanding consumer trends?
With Amazon.in, the commercial agreement that we are doing is leveraging the strengths of both companies, and this has a far bigger impact than the investment piece. We get exposure to Amazon’s online customer base, which is almost 100 times that of ours spread across India.
We will never be able to open stores in 150 towns. So that access definitely doubles or triples 100 times. Amazon is able to get a touch and feel for its products through the experience zone. We will leverage each other’s marketing strengths. And it’s only the starting point. We have multiple things to work out from this point onward and the real action will be after 90 days.
Read more:http://timesofindia.indiatimes.com/companies/e-tailers-plan-second-round-of-diwali-sales/articleshow/60837474.cms?

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