Reportedly the anticipated association between Amazon and Reliance Retail is likely not happening and Amazon is looking elsewhere for tie-ups. Meanwhile the report on this development claims the e-commerce giant has opted out due to the high valuation Reliance was placing its retail business at. Furthermore even a minority 10-15% stake would have meant committing a very huge exposure which the US company was not willing to bet on.
Perhaps the valuation being sought is between Rs 2.5 lakh crore to Rs 3 lakh crore and the report says one of the other options Amazon is now considering is the offline fashion retailer Max, owned by the Landmark group. Furthermore if one went by valuations alone, Max, with an annual sale of around Rs 3,500 crore may get valued under Rs 7,000 crore. Presently Max and Amazon already have a relationship where Max sells its products on Amazon’s platform.
Moreover Reliance Retail comprises consumer electronics, smartphones, grocery and fashion under different brands and the collective turnover reported for the last full financial year was Rs 73,508 crore and there has been no official confirmation on these developments from either side and the company may also be hoping that the government may go easy on the FDI regulations at some future date.
