The Amazon's investment arm buying five per cent in Shoppers Stop
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 Amazon.
Com NV Investment Holdings. As part of the deal, Amazon
experience centres, which let customers test out the products available online, will be set up across Shoppers Stop’s stores.
has got a lead in mobile phones, Amazon
has to do something different to move ahead. They can launch mobiles and other categories at shoppers stop
stores where customers can feel the products," said Arvind Singhal, chairman at retail
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-Amazon
India tie-up, in their view, places Shoppers Stop
at vantage point to reap benefits from its partner’s enviable digital presence wherein: "Shoppers Stop
management expects Rs 200 crore sales from digital post the tie-up with Amazon
and 6-8 per cent EBITDA margin in FY19," Roy said.
We expect Shoppers Stop
to leverage Amazon
India to increase its private label contribution (16.4% in Q1FY18). "Having Amazon
India as an investee will boost the confidence of SSL’s investors," he said.
Raman Mangalorkar, chief executive at Atom Data Labs said: "Amazon
is testing waters in Indian retail.
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.