Amazon pursues fashion tie-ups to counter Flipkart

BENGALURU: After trailing arch-rival Flipkart in the crucial fashion business, Amazon India is aggressively pursuing partnerships with large offline fashion brands and is even looking to invest in some of these brands and offline retailers.

According to two people familiar with Amazon India’s strategy, the online retailer is attempting to revive sales in its fashion business by forging alliances with popular brands that have high recall among urban consumers.

Amazon, which recently picked up a small stake in offline retailer Shoppers Stop Ltd, has also held talks with a number of other offline businesses and conglomerates such as the Tata group, which runs an e-commerce portal called Tata Cliq and the retail chain Westside, the people cited above said. The two requested anonymity as the discussions are confidential.

Amazon India has also explored alliances with other large offline entities such as Madura Fashion, owned by the Aditya Birla Group, the people cited above said. These talks have not led to any deal yet. Amazon is also looking to invest in fashion brands, the people cited above said.

In fashion, Amazon has consistently lagged behind Flipkart, which owns the specialty fashion portals Myntra and Jabong. Flipkart controls anywhere between 60-70% of online fashion sales. Over the past year, Myntra has also signed important brand partnerships with fashion brands such as Mango, Esprit and Chemistry. It has also invested in HRX. Amazon’s fashion business has struggled for stability.

In late 2015, two key executives, Vikram Raizada and Vikas Purohit abruptly left the firm. Another senior fashion executive Gautam Kotamraju, who was creative head for private brands, has resigned from the company to start his own venture. Amazon confirmed the development and said that Kotamraju is currently serving out his notice period.

“What Amazon has realised is that they can’t get close to Flipkart unless they have a wide assortment of big brands. What happens with big brands is that it gives you an exclusive edge over others. And right now, they are even more desperate to close the gap in fashion with Flipkart, especially since Amazon’s array of private label brands is yet to take off in a big way in India,” said one of the people cited above.

Amazon declined to comment on whether it was in talks with the Tata group and Madura, but pointed to its recent investment in Shopper’s Stop as an example of the strategy of tying up with large fashion brands. Tata group and Madura didn’t respond to requests for comment as of press time.