Amazon, Samara Acquire “More” Retail Grocery Chain in India

Further its investment in India, Amazon and Indian private equity firm Samara Capital have acquired the More chain of retail grocery stores in India from Aditya Birla Group.

Samara will buy 51% and Amazon will buy 49%, to avoid regulatory restrictions that apply in situations of foreign majority-ownership. The total price was about USD $580 million. Per BusinessToday.in,

The deal will take care of ABRL’s debt that stood at Rs 4,000 crore as of March 2018. Once the process is complete Samara Capital and Amazon plan to rapidly expand the chain which was put on hold due to its burgeoning debt. They plan to set up 100-150 stores every year including neighbourhood supermarkets and hypermarkets. The plan for the current fiscal is to set up 90 stores.

Our take:

Amazon is continuing to heavily invest in India. India is a strategic growth market for Amazon, with intense competition from Walmart’s Flipkart and others. Owning (almost a majority of) a retail grocery chain will give Amazon a physical footprint through which it can accelerate the deployment of other services in the country.

Amazon Reportedly Planning on Opening Up to 3,000 Amazon Go Stores in 3 Years

Amazon is reportedly considering rapidly increasing its pace of investment in Amazon Go stores by opening up to 3,000 of them over the next 3 years. Per Bloomberg:

Amazon.com Inc. is considering a plan to open as many as 3,000 new AmazonGo cashierless stores in the next few years, according to people familiar with matter, an aggressive and costly expansion that would threaten convenience chains like 7-Eleven Inc., quick-service sandwich shops like Subway and Panera Bread, and mom-and-pop pizzerias and taco trucks. Chief Executive Officer Jeff Bezos sees eliminating meal-time logjams in busy cities as the best way for Amazon to reinvent the brick-and-mortar shopping experience, where most spending still occurs…

Amazon is targeting dense urban areas with lots of young, busy, affluent residents willing to spend a little more than a typical fast-food experience for better quality food, the people said. The target locations make it less of a threat to suburban gas station-convenience store combinations and more of a threat to big cities’ quick-service eateries, such as Subway Restaurants, Panera Bread Co. and Pret a Manger.

Our take:

  • Convenience stores have existed for a long time, but Amazon has unique data on consumer behavior and shopping patterns, and could positions its Go stores in locations it believes will be most likely to change behavior.
  • Most convenience stores are currently located at or near gas stations, and typically primarily stock candy, soft drinks, snacks, beer, and tobacco products.
  • We would view this as more of a threat to quick-serve restaurants, grocery stores, and (potentially) pharmacies.

For context, Amazon just opened its fourth Go store yesterday.

Amazon Go Rollout: Store #4 Opens Today in Chicago

As we continue to track the rollout of Amazon Go stores, Store #4 opened today in Chicago at 113 S Franklin St.

It is on the first floor of the building that houses Amazon’s Chicago offices in the Loop. It is also the first Go store to launch outside Seattle, and the third to launch in the last month.

To recap, here’s a timeline of all Amazon Go launches to date:

  1. Seattle – Opened 1/22/18. Address: 2131 7th Ave.
  2. Seattle – Opened 8/27/18. Address: 920 5th Ave.
  3. Seattle – Opened 9/4/18. Address: 300 Boren Ave N.
  4. Chicago – Opened 9/17/18. Address: 113 S Franklin St.

Amazon has also posted job listings for upcoming Amazon Go stores it plans to open in New York City and San Francisco.