‘The shops are gone’: How Reliance stunned Amazon in battle for India’s future retail

A woman wearing a Reliance JioMart vest directs workers as they stock their produce at a closed Future Retail Big Bazaar retail store in Mumbai
A woman wearing a Reliance JioMart vest instructs workers how to stock their products at a closed Future Retail Big Bazaar retail store in Mumbai March 2, 2022. Picture taken March 2, 2022. REUTERS/Francis Mascarenhas

March 6, 2022

By Aditya Kalra and Abhirup Roy

MUMBAI (Reuters) – At a large Future Retail supermarket in Mumbai last week, workers unloaded hundreds of light blue grocery crates belonging to India’s biggest retailer Reliance.

Potential customers were turned away by security, disappointed by the closed state of the store, which still bears the signage of Future’s biggest brand, Big Bazaar, but is likely to be renamed Reliance Outlet soon.

Similar scenes are playing out across India as Reliance Industries, India’s largest conglomerate led by Mukesh Ambani, the country’s richest man, moves forward with a shocking de facto takeover of valuable retail properties, in which Inc necessarily holds wanted to participate -owned by.

The high-profile acrimonious row between corporate titans in which Amazon has sought to block Reliance’s proposed $3.4 billion purchase of Future Group’s retail assets is currently before India’s Supreme Court.

The Reliance takeover began in utmost stealth on the night of February 25, when employees began arriving at Future stores. Many in Future’s management team were in the dark about the plans when store employees across the country called in desperation, according to people with direct knowledge of the matter.

“It was tense, everyone was panicking. We didn’t know who they were. They wanted access and the seniors didn’t know about it,” said a clerk at a New Delhi Big Bazaar store, describing what happened around 8 p.m. that day.

Announcements were made at a Futures store in the town of Sonipat, in the northern state of Haryana, urging customers to leave the store as Reliance took control, a source said. In Vadodara, western Gujarat, future employees arriving for work the next morning were asked to return home without explanation, another source said.

Citing unpaid payments from Future, Reliance has taken control of the operations of around 200 Big Bazaar stores and plans to acquire an additional 250 of Future’s retail stores. Together they represent the crown jewels of the Future retail network and around a third of all Future stores.

Although Reliance had not played a major public role in the lawsuit, sources said it had for several months taken over many of the leases held by Future, India’s second-biggest retailer and Amazon’s estranged business partner.

Reliance’s sudden ownership of the stores appears to have landed what some analysts are calling a coup de grace, ruining Amazon’s chances of untangling Future’s asset transfer to Reliance. That’s despite a string of legal battles the US e-commerce giant has won so far to block the 2020 deal announced between the two Indian companies.

“What will Amazon fight for now?” said a source close to the US company with knowledge of the lawsuit. “The stores are gone.”

Reliance, Amazon and Future representatives have not responded to Reuters inquiries about this article. Due to the sensitive nature of the dispute, the sources asked not to be named.


Future Retail announced on Feb. 26 that it was “downsizing its operations” to cut losses, though it didn’t mention Reliance in its statement. The entire Future Group is more than $4 billion in debt.

Sources say Reliance plans to keep Future employees in the acquired businesses.

Amazon, which owns a separate entity of Future Group that prevents Future from selling retail properties without its permission, has called the supermarkets and other stores an “irreplaceable” network in a $900 billion annual sector.

The litigation has become increasingly risky and fraught with ugly rhetoric over time. Amazon once called for future CEO Kishore Biyani to be jailed for disobeying a legal order. And Future once compared Amazon to Alexander the Great and his “reckless ambition to scorch the earth.”

But on Thursday, six days after Reliance’s move, Amazon unexpectedly called for cordial talks at a Supreme Court hearing to end the dispute — a proposal Future agreed to.

“People have taken over stores… let’s talk at least,” said Gopal Subramanium, an attorney for Amazon.

The talks are due to start soon.

Regardless of the outcome of the talks, analysts say Amazon grossly underestimated Reliance.

“If anyone should have seen this coming, it should have been Amazon and prepared for it,” said Devangshu Dutta of retail consultancy Third Eyesight.

“Obviously not.”

(Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Additional reporting by Francis Mascarenhas in Mumbai and Amit Dave in Ahemedabad; Editing by Edwina Gibbs) ‘The shops are gone’: How Reliance stunned Amazon in battle for India’s future retail

Caroline Bleakley

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