Sandeep K
India is one of the largest markets, filled with billions of consumers all over the world. For this reason, Giant companies always look for occupying the maximum share in the market. In the consumer market, both online and retail stores are equally important and hold a significant amount of share.
India’s biggest retail store Future group is often the target for big companies who are looking to dominate the Indian retail market. To sign a deal with India’s largest retailer store, Future Retail, two giants are competing for a long time. Last year, Mukesh Ambani announced that he will be signing a $3.4billion deal to buy Future Group’s retail assets.
On the contrary, Amazon has made some contracts with Future Group and the Reliance deal strictly violates Amazon’s contracts. So Amazon was not at all happy about the decision that the Future Retails group had taken back then. Amazon went to court to take action against the deal.
Amazon won a stake in an unlisted future unit so it has the right to argue against the deal Future group agreed with Reliance for $3.4 billion assets. The eCommerce giant approached the Singapore emergency arbitrator in October 2020. Where the court halted the deal between Reliance and India’s largest retailer Future Group.
Today Indian supreme court has made the decision favoring e-commerce giant Amazon.com. This gives an additional boost for the global eCommerce giant to get into and dominate India’s trillion-dollar retail market.
It is a big hit for the Reliance company and Mukesh Ambani. Because if the deal had happened, then Reliance would have occupied the largest portion of the Indian retail market. Future Group is India’s second-largest retailer with over 1700 stores owning Big Bazaar, Brand Factory and Central, and more. But the deal didn’t happen as it violates the contract between Amazon and Future made in 2019.
Based on that deal, Amazon made it clear for the Future Retail group it couldn’t sell its retail assets for the specially listed companies. The list even consists of Reliance. So Amazon has all the legal right to go against the deal. Finally, the court also favored Amazon, making Reliance take a step back from the Retail market.
The court order has also been affected by the market price for both the company’s Reliance and Future Retail. This matter also highlights how much foreign companies are interested in getting into the Indian Retail Market.
Not only Amazon, but Flipkart is also on the line to get into the Indian Retail Market. India is the fastest-growing country in the world. So it makes perfect sense for anyone that India will become the largest consumer market for any organization.
Overall, the last year Singapore emergency arbitrator’s decision to restrain Future Retail from signing a deal with Reliance is still applicable. Today the Supreme court announced that last year’s decision is valid and enforceable. However, the arbitrator has yet to announce a final decision. By this point, Future Retail Group has learned that you have to face the consequences of your decisions irrespective of your position.
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