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Amazon and Alibaba eye stake in Spencer’s Retail

Grocery is going to play a pivotal role in deciding the winner in the Indian e-commerce space. And, top-tier horizontal e-commerce majors including Flipkart, Amazon, and Paytm Mall have been busy ramping up the segment organically as well as through strategic investments.

While Flipkart has been resorting on ‘Supermart’ for its grocery vertical and so far didn’t pick up stake in any online or offline grocery company, Amazon and Paytm Mall (via Alibaba) have had made investments in More and BigBasket.

Recently, Amazon picked up 49 per cent stake in Aditya Birla-owned food and grocery retail chain More. The investment was done with a strategy to wield stronghold in grocery segment and build an omnichannel ecosystem for the Jeff Bezos-led behemoth.

Within two months of More acquisition, Amazon is now said to be in talks to invest in RP-Sanjiv Goenka Group owned Spencer’s Retail. According to a Business Line report, Amazon is in talks with the brick & mortar retail chain to pick up a stake in the Kolkata-based company.

Currently, Spencer’s Retail runs 120 stores, including 37 hyper stores in over 35 cities. Launched in 1996, it was one of the earliest entrants into the retail space in the country.

The report also adds that Alibaba has begun talks with the offline retailer for potential investment. The Alibaba interest in Spencer’s Retail comes at a time when its talks with Reliance Retail for investment had fizzled out.

It’s worth noting that Alibaba was also in talks with Future Group and Reliance Retail for investment.

Amazon and Alibaba’s interest in the offline retailer can be seen as their effort to create a formidable omnichannel (aka O2O) business in India through a combination of payments, supply chain, and offline retail.

Since e-commerce players have realised that they can’t scale without offline retail, Reliance Retail, Future Group and Spencer’s Retail would continue to be a hot investment proposition for including Amazon, Alibaba as well as Walmart.

Source: Entrackr

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