Amazon India and Future Group’s Exclusive Partnership Speculated to be on Verge of Breaking


Published Date : Jan 13, 2016

Looking at the rate at which penetration of the Internet, digital network, and smartphones is increasing in India, one can say that the e-commerce market in India, though not very old, is on for trend-setting growth over the next few years. Currently, the market has a valuation of over US$12 bn, which is quite small as compared to the mammoth e-commerce market of neighbor China (an estimated US$450 bn). Analysts estimate that the market will well surpass the figure of US$100 bn by the turn of this decade.

Amazon, the U.S.-based e-commerce giant, entered the country’s e-commerce market not long back, in June 2013. Since then, the company has steadily continued to invade the marketplace and has spurred competition. Over the years, the company has been in a high-profile and exclusive partnership with Future Group. The partnership was once considered a union capable of ushering in a new era of online retailing in India. But now, the partnership is treading along a rough path and is on the verge of breaking.

It is being said that differences have cropped up between the two companies over the funding of discounts, which feature regularly on online shopping portals in the country, on Future Group’s fashion brands sold on Amazon.

 As ecommerce companies in India look to find out new ways to increase profitability, Amazon has asked Future group to share a part of the burden of discounts, a proposal that Future Group is most likely to reject. Amazon and Future had come together in October 2014 to feature more than 40 brands of Future Group on Amazon. Now, as Amazon wants Future Group to cut-short on the margin and share a part of the discounts burden, Future Group feels that such a move will lead to differentiation in prices of products that are sold in company’s physical stores and online, via Amazon.

Thus, it is being speculated that the partnership between the two companies will not last any longer. Future Group operates via more than 1,200 outlets in India that sell everything from food products to furniture items.