Reliance Retail extends completion date of Future Retail acquisition
Amazon has formally objected to the deal, putting the transaction under dispute.
Reliance Retail is extending the date to complete the purchase of Future Retail in India by another six months, from 31 March to 30 September, according to a report from IGD.
Although Reliance Retail has agreed to buy Future Retail’s assets in August 2020, e-commerce giant Amazon has objected to the deal since it owns a stake in the Future Group. The transaction remains under dispute in the Delhi High Court and Supreme Court of India.
Waiting for the merger to be approved by the authorities, Reliance Retail is focusing more on growing its private label brands, whilst Future Retail has enhanced its digital capability with a two-hour delivery guarantee for online shoppers of Big Bazaar.
“It is beneficial to businesses as the profit margin it offers to Kirana Stores on its private labels is as high as 20%, compared with the 10% to 12% offered on similar products by global brands,” IGD’s senior retail analyst Francis Ramos said.
Future Retail’s Big Bazaar has also recently enhanced its digital infrastructure. The retailer has launched its two-hour delivery guarantee across food and consumer goods, household care products and fashion for orders placed online through Big Bazaar’s mobile app or portal.
The first phase starts in April, committing a two-hour delivery in Mumbai, Bengaluru and Delhi. Once it sees a hundred thousand orders a day in these cities, the second phase will be rolled out in the next 45 days in other cities where Big Bazaar has three or more stores.