Acontroversy over a home appliance company in India has put Amazon, the world’s largest e-commerce company, in competition with Reliance, India’s largest company.
The two companies are fighting against each other because they have different agreements with the same company Future Group.
Analysts say that the legal battle between the US company Amazon and Mukesh Ambani’s company, which is a hero in India, in which Mukesh Ambani also has the advantage of being a local, will affect e-commerce production in India for many years to come. Can take a new direction.
This is a big legal battle, according to Satish Mina, a senior analyst at consultancy firm Forster. “Amazon has never seen such a competitor in any market before,” he said
Amazon founder Jeff Bezos
is the richest man in the world. He is not currently the head of the company, and the company has changed its appearance and now has stores around the world. Reliance CEO Mukesh Ambani, India’s richest man, also has a reputation for being competitive.
Analysts in the industry believe that Mukesh Ambani’sretail plan’ will also be a challenge for Amazon and Walmart’s Flipkart. Amazon is aggressively expanding its business in India, with the company now looking at a growing e-commerce market in India.
Reliance also now wants to expand its e-commerce and home appliance business.
Future Group recently sold 3. 3.4 billion in assets to Reliance Industries under a deal.
Since 2019, Amazon has owned 49% of Future Coupons’ assets, indirectly making it the owner of Future Retail. Amazon says the deal bans Future Group from making such sales deals with some Indian companies, including Reliance.
Future Retail, a brick and mortar company, has been hit hard by the coronavirus epidemic. The company argues that an agreement with Reliance was essential for its survival.
The initial court hearing was in favor of Future Group. Last Monday, the Delhi High Court reserved its decision in this regard and barred it from the sale. Amazon has filed an appeal against this decision.
What is at risk?
If Reliance gets permission to purchase, then the company will set up more than 1,800 stores in more than 420 cities in India. In addition, Reliance will handle the Future Group’s wholesale business and other assets.
Satish Meena says that Reliance has the money, which is why the company has the desired influence in the market, but they do not have expertise in the field of e-commerce.
If Amazon succeeds, then its impact will increase, allowing it to slow down the pace of its big competitors in this area.
Analysis: N open them as Umm Dar, BB C News Mumbai
The controversy between the two richest men in the world underscores the growing interest of Jeff Bezos and Mukesh Ambani in a market that usually ranks last in the manufacturing sector.
It is also a testament to how difficult it is for foreign investors to do business in India.
Amazon is a new addition
Amazon is a new addition to foreign companies that have failed to comply with agreements with their Indian business partners. These foreign companies are also subject to legal action in local courts in India.
India has recently lost two such tax cases in international forums to Karen Energy plc and telecom company Vodafone.
Rupa Subramania, a researcher at the Asia-Pacific Foundation in Canada, says there is no doubt that foreigners will now resent the situation and other similar incidents. According to him, this decision will create a negative impression about India’s credibility, future business, and investment.
However, Amazon will not back down from its position without a legal battle and will not leave the field simply because some analysts have said that Reliance has the upper hand in this case as a special kind of local company.
Favorable for Amazon
However, due to an Indian company going against Reliance, the field of business expansion in India is not so favorable for Amazon. Indian government rules prohibit foreign e-commerce companies from selling any of their products or directly to consumers. The ban is seen as a protectionist policy aimed at encouraging local investors.
Amazon has been facing difficulties since data usage restrictions and Indian Prime Minister Narendra Modi’s announcement of self-reliance.
Look at the opportunities.
Amazon and Reliance are ready to compete in the Indian market as there are unique production opportunities available here. Mina says there is no market after the US and China that gives these companies such opportunities.
Meena says India’s retail sector is worth 8 850 billion, but e-commerce is still a very small part of it. Predictors say the Indian market will grow at an annual rate of 25.8% to 85 85 billion by 2023.
As a result, competition in the e-commerce market will increase. In addition to Amazon, Wal-Mart has partnered with e-commerce company Flipkart. Facebook is also now part of the market, paying ام 5.7 billion to Mukesh Ambani’s company for 9.9% of its assets on Reliance Industries’ Geo platforms.
The fight for food
Home appliance business is booming in India, and non-perishable items such as smartphones are doing well in e-commerce.
The coronavirus epidemic has now also linked household goods transactions to the e-commerce industry as India is one of the countries that has implemented the toughest lockdown to control the virus.
People were trapped in their homes. Himanshu Bajaj, head of consumer and retail for Asia at business consultancy AT Kearney, says that during the (lockdown) period, more and more people relied on online services.