Amazing Amazon
Amazon founded by Jeff Bezos on July 5, 1994 is the world’s largest internet company by revenue. And the endeavor to sustain it never goes low. After surprising many lately by announcing its intention to purchase Whole Food for $13.7 billion. It’s now dabbling with traditional brick-and-mortar activities for quite some time now. The different plans of opening stores for running experiments like “Amazon Fresh” and “Amazon Go” rightly portrays that it is here to give a tough fight to many in retailing.Recent news of Amazon buying 5% equity in Shoppers Stop has blown everyone.
The other report stating that now it has also made fellowship with the ever growing Shoppers Stop Ltd is giving us more light on the same quest. On Saturday Shoppers Stop Ltd has approved a proposal to sell 5% equity in the company for Rs 179.25 crore to the worlds largest on line retailer, Amazon Inc. The board has taken a call for issuing 43.95 lakh equity shares of Rs 5 each, at price of Rs 407.78 a piece, to Amazon.com.
Details
Shoppers Stop claims to use these funds to continue expanding physical and online retail businesses. They will now hold an EGM (Extraordinary general meeting) for its shareholders to seek their approval on the same. However Govind Shrikhande, the MD confirmed that Shoppers stop does not have an specific timeline. Which is yet decided for when this investment proposal will get all the necessary approvals.
Adding to which Shoppers stop also confirmed that it had entered into an exclusive partnership with Amazon Seller Services Pvt. Ltd. and the company will exclusively sell its products online on Amazon. in. In total, Shoppers Stop will sell over 400 brands through Amazon.
This clearly speaks that now Amazon wants to increase its influence in the online fashion market. That has been dominated by other competitors like Flipkart, Myntra, SnapDeal etc. The proposed deal values Shoppers Stop shares at Rs 407.78 each. The firm’s shares closed at Rs416.45 during Friday’s trade, down 3.39%.
This move of Amazon and shoppers stop comes a few days after the Aditya Birla group. Which announced that they will be closing its own fashion e-commerce website. Abof.in citing unsustainable discounts to win the share of customers in the Indian e-commerce business. “We will have the same discounts on Amazon as we carry in our stores,” Shrikhande quoted.
Although Shoppers stop is planning open Amazon Experience centers wherein the online retailers can showcase its brand the other competitors are planning to conduct “joint marketing” initiatives.
“These will be for customers to touch and feel Amazon’s exclusive brands, mainly for fashion and accessories,” Shrikhande said. “This is still a work in progress and we will be able to share more details by Q4 (quarter ending March) of this financial year (2017-2018),” he said.
