The e-commerce major Amazon has picked up a 5 per cent stake in Shoppers Stop for Rs 179.26 crore.
The move comes as the e-commerce platform Paytm and Flipkart’s Myntra are focusing on offline retail, which consists of 98 per cent of the total retail market.
Amazon and Shoppers Stop have also signed a pact that will allow the offline retailer’s 400 brands to be sold on Amazon. Besides, the Seattle-based company will get space to set up experience centres at Shoppers Stop outlets to promote its fashion products on the online platform.
According to experts, both Amazon and Shoppers Stop are leveraging each other’s space to promote brands offline and online, respectively.
Recently, Shoppers Stop announced it would go online with its wholly-owned subsidiary products — HyperCity and Crossword. The company is going to sell food and books via omni-channels by the next financial year.
Flipkart has also entered into the offline space with its fashion subsidiary Myntra. In March this year, Myntra opened its first store in Bengaluru to promote its largest private label brand, Roadster; it will allow customers to buy products directly from Myntra’s store.
This trend of online platforms venturing into the offline space has been observed globally. In June, Amazon acquired US-based offline retail chain Whole Foods for $13.7 billion. In China, Alibaba opened three massive Hema supermarkets, where customers can order groceries for home delivery and even eat in.
Experts believe that online e-commerce platforms have realized the importance of the offline segment and they don’t rule out the conventional way of shopping outrightly any more. Besides, the price war among online players put a lot of pressure on the entire industry, and caused smaller players great damage.
Aditya Birla Group’s e-commerce platform Abof.com has declared it would shut down the business by the year end. The online player couldn’t keep up against the heavy discounting model offered by Flipkart and Amazon in the ecommerce space.