Amazon, one of the country’s best-known e-tailers, is looking to bring down its dependence on More Retail, an investee company, for supplying grocery orders to consumers, informed sources have told Fe.
The move comes as the two increasingly chart independent plans to drive their respective grocery operations in the country. Amazon, for instance, is working with local retailers as it takes its grocery operations under Amazon Fresh to over 60 cities. It also has over 25 specialised fulfillment centres of its own in 10 states for its grocery business in the country.
More Retail, on its part, has launched its own app in the last few months to turbocharge its e-commerce operations. This will reduce its dependence on Amazon, which provided online orders to it as part of its overall omnichannel push, sources in the know said.
Amazon has a 49% stake in More Retail’s parent Witzig Advisory Services, while Samara Capital has a 51% shareholding. The two had picked up the stakes in 2019 for Rs 4,200 crore from the Aditya Birla group — the previous owner of the chain. More has over 900 stores within its network, including both hypermarkets and supermarkets. Executives at More Retail were not immediately available for comment.
In response to a mail on its grocery business in India, an Amazon spokesperson said that Amazon Fresh was committed to providing the best grocery shopping experience to consumers. The spokesperson offered no comment on More and its plans.
“Customers benefit from the largest selection of products available at great value from Amazon Fresh sellers, coupled with convenient delivery slots. We are investing across areas where we can bring value to our customers, and will continue to work with the local ecosystem to enable small businesses and partners,” the Amazon spokesperson said.
But the move to take separate paths, say retail experts, is linked in part to the larger plan of the primary shareholders to list More Retail on the bourses. Media reports in the past have suggested that Amazon-Samara propose to launch an initial public offering of More Retail in the next one year for which it is talking to investment bankers. Before that, the combine may look at a private funding round for which it may dilute about 20% equity capital in the company.
FY23 numbers of More Retail have not been disclosed yet. However, FY22 revenue of the company grew at a sluggish pace of about 1.74% only to Rs 4929.11 crore versus the previous year’s Rs 4,844.44 crore, according to data sourced from Tofler. Losses, meanwhile, jumped over four times to Rs 474 crore in FY22 versus Rs 104 crore reported in FY21.
Amazon Retail, on the other hand, has also seen its losses widen in the last few years. FY23 numbers were not disclosed by the company. But in FY22, revenue grew nearly 8% to Rs 1,710 crore versus Rs 1,585 crore reported in FY21, according to regulatory filings. Losses, on the other hand, jumped 22% to Rs 794 crore versus Rs 650 crore reported in FY21.