Future Group to start selling its products online through Amazon

‘If you can’t beat them, join them’ seems to be running through the minds of offline biggies now. They have been successful for decades and years with their traditional brick-and-mortar presence. But now with the exponential growth of ecommerce in the country, even they seem eager not to be left behind.

Last month, we heard about Tata group’s likely foray into ecommerce. Now its Future Group that’s entering the ecommerce space with a tie-up with online marketplace Amazon. 

What’s the deal about?

As per the deal, both parties will develop new products which would be sold exclusively through Amazon’s online portal and Future group’s offline stores. A whopping Rs 6,000 crores worth of sale is expected to be made in the coming three years with this arrangement.

While Future group will sell about 45 in-house apparel labels initially, Amazon will take care of the order fulfillment and customer service for the products on its portal. Eventually, in-house brands in the home, electronics and food product categories will also be included in the arrangement.

“We are exploring several synergies in data sharing, co-branding, cross promotion and distribution network sharing through the partnership,” said Future Group’s Kishore Biyani.

Is it Future Group’s debut in ecommerce?

Not really. Future Group has had tie-ups with Flipkart and Myntra previously. Ezone, its electronics store, already has an online presence although a revamp is in the picture. For now, its fashion products will be sold online first.

Interestingly, Kishore Biyani voiced his strong opposition to campaigns like Flipkart’s Big Billion Day sale, saying, “How can someone sell products below its manufacturing price? This is legally not allowed in the country. Someone can do such undercutting only to destroy competition. Just because they have foreign funding, they can’t kill local trade like that.”

Amazon’s take on the deal

Amazon’s CEO Jeff Bezos expressed keen interest in expanding in the Indian market, especially in the fashion segment. An acquisition or tie-up seemed to be round the corner for the global giant to counter competition from Flipkart-Myntra. In line with this, there were reports of a possible deal with Jabong, although there were no definite reports or confirmations about it.

How would the story have been different?

Future Group reportedly was in talks with Flipkart before to sell its products online. While they asked for $10 million (Rs 60 crore) to give exclusive online retail rights, Flipkart found it excessive. Also, Flipkart wanted a commission on every sale, like all its other merchants on the platform.

Obviously, the deal didn’t come through and there was no “warmth” between the two parties according to sources.