Amazon to buy 5% stake in Indian retailer

MUMBAI • Inc is set to buy a 5% stake in Indian retailer Shoppers Stop Ltd, as the US company steps up efforts to gain ground in the fast-growing consumer market.

Shoppers Stop’s board approved the issuance of 4.4 million shares to a unit of Amazon for 407.78 rupees (RM24.47) each, the Mumbai-based company said in an emailed statement late on Saturday.

As part of the deal, Amazon experience centres — which let customers test out the products available online — will be set up across Shoppers Stop’s network of 80 brick-and-mortar stores in India.

CEO Jeff Bezos has allocated US$5 billion (RM21 billion) toward Amazon’s expansion in India as it seeks to secure an advantage over local rivals in the South Asian nation.

The e-commerce giant has a lot riding in the country after its washout in China, where the dominance of Alibaba Group Holding Ltd and other domestic players made Amazon’s entry difficult.

Shares of Shoppers Stop have gained 45% this year and closed at 418.1 rupees last Friday in Mumbai.

The deal will be Amazon’s first investment in a publicly traded retailer in India. — Bloomberg