India’s leading ecommerce marketplace Flipkart is set to invest $203 Mn (1,500 Cr) in Aditya Birla Fashion and Retail Limited (ABFRL).
Flipkart Group will acquire a 7.8 percent stake in ABFRL. This is the second such transaction for the ecommerce marketplace with an offline retail company after it invested Rs 260 crore in Arvind Fashions in July this year. ABFRL owns brands like Pantaloons, Allen Solly, and Peter England.
Kalyan Krishnamurthy, CEO, Flipkart Group, said, “We are focused on building new partnerships that will help us meet the demands of the discerning Indian consumer who seeks quality and value. Through this partnership with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country.”
ABFRL MD Ashish Dikshit said, “Given the complementary strengths of ABFRL and Flipkart Group, this partnership has the potential to dramatically accelerate the growth of the apparel industry in India and reshape apparel commerce. This deal also provides a tremendous opportunity to build scale of existing brands and expand its brand portfolio into emerging consumer segments.”
It has a network of 3,004 stores and a presence across 23,700 multi-brand outlets, with 6,700 points of sales in department stores across India. In the financial year 2020, the company reported INR 8,788 Cr in revenue and a market cap of around INR 13,000 Cr. Flipkart’s investment into an offline retail player like Aditya Birla Fashion shows the growing trend between ecommerce marketplaces and traditional brick and mortar companies.
The rapid growth of technology infrastructure will further accelerate this process, Birla added.