Flipkart is eyeing strategic stakes in multiple small, regional as well as large retailers in India as the e-commerce giant looks to tap the offline retail opportunity in the country, according to sources.
Last July, Flipkart Group also invested Rs 260 crore for a significant minority stake in retailer Arvind Fashions’ (AFL) subsidiary Arvind Youth Brands, which owns the Flying Machine brand.
The Walmart-owned firm is in a race with rivals Amazon and Reliance’s JioMart, who are also following a similar strategy and are in talks with multiple Indian offline retailers to buy strategic stakes.
Under foreign direct investment (FDI) regulations, Amazon and Flipkart cannot directly acquire assets, according to analysts. These firms are doing smaller strategic stake deals with offline retail players in the hope of acquiring offline assets when rules change. People in the know said that Flipkart has also held talks with grocery chain Namdhari’s Fresh to purchase a significant stake.
The approval by the watchdog comes at a time when the Karnataka High Court is hearing the petition filed by CCI for the probe against e-commerce firms Amazon and Flipkart. This is a continuation of the matter when the Supreme Court in October last year declined to entertain the petition filed by CCI seeking to remove Karnataka High Court’s stay on an investigation that the watchdog had ordered against Amazon and Flipkart related to anti-competitive business practices.
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