“At the Flipkart Group, we are focused on building new partnerships that will help us meet the demands of the discerning Indian consumer who seek quality and value,” said Kalyan Krishnamurthy, chief executive officer (CEO), Flipkart Group. “Through this partnership with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country," he said.
Krishnamurthy said Flipkart is looking forward to working with ABFRL and its well established and comprehensive fashion and retail infrastructure as “we address the promising opportunity” of the apparel industry in India.
Ashish Dikshit, managing director of ABFRL, said this partnership has the potential to dramatically accelerate the growth of the apparel industry in India and reshape apparel commerce.
“This deal also provides a tremendous opportunity to build the scale of existing brands and expand brand portfolio into emerging consumer segments," said Dikshit.
Analysts said that there is going to be an increase in consolidation in the Indian retail industry. They said more strategic partnerships would be formed between offline retail brands and e-commerce majors such as Amazon, Flipkart, JioMart
Only 7 per cent of the $1.2-trillion retail market is online, and these players are competing with one another and eyeing the remaining 93 per cent. US retailer Walmart
is also in discussions with the Tata group for a large stake purchase, according to the sources. This would help the salt-to-software conglomerate integrate its offline and online operations and also create its own e-commerce platform like Reliance’s JioMart.
“We are expecting more such deals with small and large offline and online retail players,” said Satish Meena, a senior forecast analyst at Forrester Research. “A player like Aditya Birla is not big enough to stand up individually against the ecosystem, where you have Walmart, Flipkart on one side and Reliance and Amazon
on the side,” said Meena.
Due to 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.
In July this year, Flipkart Group invested Rs 260 crore for a significant minority stake in retailer Arvind Fashions’ (AFL) recently formed subsidiary Arvind Youth Brands, which owns the Flying Machine brand. The partnership is helping them address the demands and needs of the fashion-conscious youth in India. Through this investment, the Flipkart Group and Arvind Fashions are working collaboratively to identify opportunities and synergies to innovate and develop products with strong value propositions at attractive price points.
This month, Walmart
and the Flipkart Group made a fresh round of investment in Ninjacart, that connects farmers, growing fruits and vegetables, with kiranas and businesses. This follows the investment made by Walmart and the Flipkart Group in December 2019. The companies
did not reveal the amount, but it is learnt that the firms have invested about $30 million in Ninjacart.
Flipkart’s rival Amazon has also been picking up stakes in multiple offline players. These include More supermarket chain, retail conglomerate Future Group’s unlisted firms, entity Future Coupons and retailer Shoppers Stop.
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