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Amazon-Shoppers Stop deal is a win-win for both, say analysts

Since Flipkart has got a lead in mobile phones, Amazon has to do something different to move ahead

BS Reporters 

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The Amazon's investment arm buying five per cent in is expected to be a win-win deal for both, say consultants and analysts.

on Saturday said it will raise Rs 180 crore by selling 5 per cent stake to Com NV Investment Holdings.  As part of the deal, experience centres, which let customers test out the products available online, will be set up across Shoppers Stop’s stores.

"Since has got a lead in mobile phones, has to do something different to move ahead. They can launch mobiles and other categories at stores where customers can feel the products," said Arvind Singhal, chairman at consultancy Technopak Advisors.

"can also get a lot of traffic to its stores besides being able to sell its private labels globally," Singhal said.

Abneesh Roy, Senior Vice President - Institutional Equities - Research Analyst  at Edelweiss Securities said the Shoppers Stop-India tie-up, in their view, places at vantage point to reap benefits from its partner’s enviable digital presence wherein: "management expects Rs 200 crore sales from digital post the tie-up with and 6-8 per cent EBITDA margin in FY19," Roy said.

We expect to leverage India to increase its private label contribution (16.4% in Q1FY18). "Having India as an investee will boost the confidence of SSL’s investors," he said.

Raman Mangalorkar, chief executive at Atom Data Labs said: "is testing waters in Indian They want to know what is happening and then expand the business. They are doing the same all over the globe."

However, for Shoppers Stop, he does not think there is any direct benefit. "One can argue they can list their private tables but that they can do without the deal also," he said.

First Published: Mon, September 25 2017. 12:47 IST