Amazon.com Inc. is looking to acquire an up to 26% stake in Indian retail stores operator Reliance Retail Ltd. for an undisclosed amount as it aims to gain a small portion of India's brick-and-mortar chains, The Economic Times (India) reported Aug. 1, citing two senior industry executives.
Amazon's talks with the Reliance Industries Ltd.-owned retailer reportedly started when Alibaba Group Holding Ltd.'s plans to buy a stake in the business in 2018 fell through due to disagreements with the deal amount.
The report comes as progress of Amazon's talks with another Indian retailer, Future Retail Ltd., appears to have slowed. The newspaper reported in November 2018 that the U.S. e-commerce behemoth was planning to buy out the stake of Future Retail's founder Kishore Biyani in eight to 10 years, but no announcements were made this year.
Most recently, sources reportedly said there is no certainty that the initial discussions with Reliance Retail will result in any deal.
An Amazon spokesperson told the newspaper that the company does not "comment on speculation about what we may or may not do in future."
Meanwhile, a spokesperson from Reliance told the news outlet that the company "evaluates various opportunities on an ongoing basis." "We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India," the company also said.
Amazon's plan to build a 26% stake in Reliance Retail would still make it compliant with India's new e-commerce regulations, which prevents foreign online retailers from owning more than 26% of their sellers.
Amazon rival Walmart Inc. has a presence in India's physical retailing space as it already operates wholesale stores and fulfillment centers long before it acquired Indian online retailer Flipkart Online Services Pvt. Ltd. in 2018.