Amazon partners with Future Retail to further its push into the Indian market

A food aisle at a Big Bazaar hypermarket, operated by Future Retail, in Mumbai, India
Dhiraj Singh | Bloomberg | Getty Images

Amazon is partnering with a leading Indian retail group as it continues its push into the world's second most populous country.

Under a new deal announced Monday, Amazon will become the official online sales channel for India's Future Retail.

Future Retail operates six retail chains, including popular hypermarket Big Bazaar, and has more than 1,500 stores across India. In partnering with Amazon, customers will be able to order products from those stores, with those in Delhi, Mumbai, Bengaluru, and Hyderabad able to have them delivered via Amazon India's Prime Now two-hour delivery program.

The deal will focus on two product categories: groceries and general merchandise, and fashion and footwear.

Amazon and Future Retail will also create a team dedicated to growing sales through initiatives in areas like distribution and marketing.

"Future Retail's national footprint of stores offering thousands of products across fashion, appliances, kitchen and grocery will now be available to millions of customers shopping on in hours across more than 25 cities," Amit Agarwal, senior vice president and country head of Amazon India, said in a press release Monday.

Profit opportunity

Amazon has big plans for the Indian market, having expanded its online grocery business to India in August shortly before building its largest campus in the world in the city of Hyderabad. The tech giant reportedly invested around $5 billion during the first five years of operating in India, which included going on a hiring spree last year.

Global consultancy PwC expects India's e-commerce market to be worth more than $100 billion by 2022 as internet adoption continues to rise.

However, Amazon faces competition from U.S. rival Walmart, which is also tapping into the market since its $16 billion purchase of Indian e-commerce giant Flipkart in 2018.

But local regulatory hurdles present a challenge to both firms. In 2019, India passed an e-commerce law that placed restrictions on foreign companies selling products from businesses in which they have an equity stake.

The rules also ban firms like Amazon from negotiating deals with vendors to sell exclusively on their platforms.