Shoppers Stop shares soar 20 per cent on Amazon deal

Amazon boxes are seen stacked for

"The partnership with Amazon will really accelerate our revenue from online sales and we expect it to double every year for the next three years", Shrikhande, said in an interview on Sunday.

Inc.'s investment in retailer Shoppers Stop Ltd. will help the Indian company boost revenue and add 25 percent more stores, while the US firm expands its reach into smaller towns in the world's second-most populated nation.

NV Investments Holdings LLC, which is registered as category III Foreign Portfolio Investor with SEBI in India; and liability company incorporated in the U.S. has chose to invest Rs 179.25 crore or $27.6 million, for acquiring 5% stake in Shoppers Stop.

"In addition to the website of the company and its group companies, the company will exclusively sell its products online on the Amazon.in marketplace", it had said.

Anand Lunia, Founder of India Quotient stated Amazon will strengthen its foothold in fashion market with this deal.

Shoppers Stop also made a statement arguing that the new partnership will create an "omni-channel retail experience" for consumers by leverage Shoppers Stop's brand assortment and Amazon's reach.

Amazon India will provide marketing, promotion and visibility support to promote the sale of products of Shoppers Stop on Amazon.in.

While the Amazon, Shoppers Stop deal could be good business for both, some analysts suspect Amazon could make a takeover bid for the Indian retailer.

Shoppers Stop runs department stores that sell apparel, cosmetics and fashion accessories.

It's the first time Amazon has invested in an offline fashion retail in India.

For Amazon's part, they'll gain access to a network of brick-and-mortar stores in less developed parts of India, where credit card and Internet penetration is pretty low. Although Amazon has scouted for acquisitions since entering the country in 2013, it has failed to make any significant purchases.

Shoppers Stop will utilise the funds for reducing debt on the standalone entity's books which at presently stands at Rs 575 crore.

Some experts say the tie-up between Amazon and Shoppers Stop could trigger a string of similar deals as the industry matures.

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