Amazon partners with India's second largest retailer to sell its goods online

Manish Singh
Customers push carts past confectionery on display in an aisle at a Big Bazaar hypermarket, operated by Future Retail Ltd., in Mumbai, India, on Sunday, April 16, 2017. Future Retail, India's biggest department store chain, still has room to extend the rally that's more than doubled its market value this year. A shortage of cash hit purchases of soaps to cars after Prime Minister Narendra Modi in November junked high-value currency bills, driving shoppers to large-format stores like Future Retail that accept credit cards. Photographer: Dhiraj Singh/Bloomberg via Getty Images

Amazon is deepening its relationship with India’s second largest retail chain, Future Retail, as the e-commerce giant widens its footprint in one of its key overseas markets.

The two said on Monday that they have entered into a long-term business agreement to expand the reach of Future Retail’s stores through Amazon India marketplace. Future Retail operates more than 1,500 stores across India, but until now, it has not aggressively explored sales online.

As part of the agreement, Amazon India will become the authorized online sales channel for Future Retail stores, including department and grocery store chain Big Bazaar and lifestyle food superstore Foodhall, the two said. Additionally, India’s second largest retail chain, which attracts more than 350 million footfalls a year across its network, will list its items on Amazon’s two-hour delivery platform Prime Now, which is currently operational in Delhi, Mumbai, Bengaluru and Hyderabad.

The two giants said that they have agreed to focus on grocery -- a category that Amazon has been working on in India for awhile -- general merchandize, fashion and apparel, and beauty products.

Future Retail will "augment its existing store-infrastructure" at its retail outlets for facilitating seamless packaging and pickup of products ordered online. The two have already launched this service across 22 stores and the early results have been "encouraging," they said.

Future Consumer, which is part of Future Retail, has also formed a long-term partnership with Amazon to secure an online distribution through the Amazon India marketplace.

Future Consumer offers a wide range of food, home care, personal care and beauty products, and has built a number of in-house brands such as Tasty Treat for snacks, Voom for fabric care, Dreamery for dairy, Karmiq for dry fruits, Mother Earth for organic staples, Kara for personal care and CleanMate for household cleaning.

Kishore Biyani, chairman and managing director of Future Retail, said the partnership will "allow us to build upon each other’s strengths in the physical and digital space so that customers benefit from the best services, products, assortment and price.”

The announcement today comes months after Amazon bought stakes in Future Retail’s Future Coupons -- which effectively gave it a 3.58% stake in the retail chain group's India business -- and days after India's largest retail chain, Reliance Retail, began its e-commerce venture.

"Future Retail's national footprint of stores offering thousands of products across fashion, appliances, home, kitchen and grocery will now be available to millions of customers shopping on Amazon.in, in hours across 25+ cities," said Amit Agarwal, SVP and Country Head of Amazon India, in a statement.

According to research firm Technopak Advisors, retail in India is estimated to be a $188 billion business in the next three years, up from about $79 billion in 2018. Online sales still account for less than 5% of overall retail.