Amazon Said to Near Deal for Up to 10 Percent of India's Second Largest Retailer, Future Retail

Amazon.com is in late-stage talks to acquire as much as 10 percent of India's Future Retail, people familiar with the negotiations said, as the US company moves to bolster its brick-and-mortar presence in one of the world's fastest-growing retail markets.

India's No. 2 retailer by turnover, Future is seeking a valuation of about 20 billion rupees ($281 million) from Amazon for the stake, according to the people, who asked not to be identified as the discussions are private. The sale is likely to be routed through a holding company, they said, and will give Amazon the option to buy more shares from Kishore Biyani, Future Retail's founder and chairman.

The deal with the Mumbai-based company, which operates its flagship "Big Bazaar" grocery store chain, will give Amazon more exposure to the business after it bought Whole Foods Market Inc. for $13.7 billion in 2017 and secured a foothold in the US food retailing segment. The proposed investment in Future Retail offers some parallels, enabling Amazon to tap into India's rising demand for household products and home-delivered fresh produce and vegetables.

Discussions are yet to be finalized, and the deal could still falter or be delayed. Representatives for parent company Future Group and Amazon in India said they don't comment on market speculation.

The potential deal underlines the American online giant's ambitions to dominate the last sizable market yet to be conquered by large networks of hypermarkets and supermarkets, after losing ground in China.

It'll also give the Jeff Bezos-controlled firm an edge over rival Walmart and the planned e-commerce venture of Mukesh Ambani, Asia's richest man, that plans to combine the online and offline retail formats in India. Walmart, which spent $16 billion last year to acquire Indian e-tailer Flipkart Online Services Pvt. Ltd., has a local unit that is allowed to sell goods to smaller grocery stores but not directly to consumers.

Amazon has been acquiring tiny stakes in other Indian brick-and-mortar chains such as Shoppers Stop Ltd. and a grocery chain from the Aditya Birla Group in the past couple of years.

That's on top of directly plowing in $5.5 billion into its own operations in a bid to grab a bigger slice of India's modern retail market which, according to consultant Technopak Advisors, will more than double to $188 billion by 2023, up from $79 billion last year.

Discussions between the Seattle-based retailer and Future Group revived recently, said the people, after waning earlier this year when India tightened rules related to online retail, throwing Amazon and Walmart's grand plans for the nation in disarray.

Future Retail operates over 2,000 stores across 400 Indian cities, including the "Big Bazaar" stores that are designed to appeal to the value-conscious urban consumers who have traditionally shopped in India's chaotic street markets.

More recently, it has been building out its network of small-format corner stores that seek to provide the same convenience of the traditional grocery stores that dot every neighborhood in India. Future Retail is also expanding its affordable fashion wear chain under the "fbb" brand.