The e-commerce giant paid $14.7m in an all-cash acquisition deal to expand its retail reach in India.
India has quickly become the second largest online market in the world, making it a prime target for tech giants. Now, e-commerce giant Amazon is looking to expand its footprint in the country with the acquisition of retail start-up Perpule.
Amazon paid $14.7m in an all-cash deal, according to regulatory filings. Perpule helps bricks-and-mortar retailers or so-called kirana stores shift to an online platform. The acquisition is expected help Amazon extend its reach into the offline retail market, which still makes up a significant portion of sales in India.
The e-commerce company has already been making moves in this area. Last year, it launched Smart Stores in India to help offline retailers digitise their inventory and launch digital store fronts on the Amazon app.
Earlier this month, Amazon said more than 50,000 offline retailers and neighbourhood kirana stores across 450 cities in the country had become part of its Local Shops programme, which enabled them to go online.
Perpule, which aims to help stores to better manage their inventory and checkout processes, was founded in 2016. The retail start-up has raised more than $6m in funding since then, including a $4.7m round in 2018.
Last year, Perpule brought its offerings to the south-east Asian market, launching in Indonesia, Malaysia, Thailand, Singapore and Vietnam.
A spokesperson for Amazon told TechCrunch : “We are excited to have the Perpule team join us to focus on providing growth opportunities for businesses of all sizes in India while raising the bar of the shopping experience for Indian customers.”
While the acquisition highlights Amazon’s intentions to strengthen its reach in India, it also faces regulatory challenges in the country.
The Indian government is currently in the final stages of formulating a new e-commerce policy that will require e-commerce companies to treat sellers equally on their platforms and ensure transparency.
It’s also investigating Amazon business practices at the moment and the company has requested for a pause on the new e-commerce rules until the investigation is complete, according to Reuters.
This is not the first time the government has tried to regulate the e-commerce industry in India. In 2019, it implemented new e-commerce regulations for retail giants, which essentially prevented online retailers from selling items through vendors if they hold an equity stake in those vendors.