Great Scott!

Future Retail and Amazon Ink a Deal

Image source: Lotus_studio, Anton Ryabtsov, Alina Reynbakh - Shutterstock, Jimmy Kimmel - YouTube, Pyke (Marty McFly) - Wikipedia

What's going on?

Terrified of getting stuck in the past, Amazon have gone Back To… er, Future Retail – India’s second-largest physical retailer – and signed a deal to sell the company’s products (tweet this).

What does this mean?

Future Retail operates over 1,500 stores in India under brands like Big Bazaar, and it sees around 350 million visits each year. But its fledgling online business faces stiff competition from Walmart, which owns Indian ecommerce giant Flipkart. A partnership with Amazon could be a shortcut to success: the US tech giant will stock Future’s products online, as well as offer two-hour Prime delivery on a whole range of them.

Amazon already has a relationship with Future Retail, having bought almost 4% of the company last year. But this new deal is an effort to further expand its product selection and better compete with rivals like JioMart, a new venture from Asia’s richest man.

Why should I care?

For markets: Moody Moody’s.
India’s economic growth has slowed significantly in recent years, falling to its slowest in over six years in the third quarter of 2019. Ratings agency Moody’s even issued a negative outlook for the country back in November, partly because it thinks recent tax cuts might hurt government finances. And just as we’ve seen in Hong Kong, there’s the risk recent political turmoil will leave economic scars. But some analysts are more positive: they think those tax cuts and a stronger global economy could lead to a rebound for the country in 2020.

Zooming out: Teamwork makes the dream work.
It can be tricky for traditional retailers to make the move online: dealing with all those delivery trucks ain’t easy, after all. But even seasoned ecommerce companies can struggle to stay on top in a competitive market. Teamwork between the old and the new, then, is in vogue. That might be why supermarket giant Carrefour bought lunch delivery firm Dejbox over in France on Monday.

Originally posted as part of the Finimize daily email.

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