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Amazon Strikes Deal With Monoprix In Its Effort To Enter French Market

Amazon Strikes Deal With Monoprix In Its Effort To Enter French Market
Amazon has managed to sing up the first trader in France for its grocery business as the U.S. online retailing giant took another step in the grocery market in the country. Casino’s upmarket Monoprix chain will now sell its grocery products on Amazon. 
The two companies together may even expand beyond France with their businesses.
According to media reports citing sources, negotiations are on for a deal between Amazon and Casino for the Brazilian market where the two companies may either partner each other or Casino could sell its local appliances and electronics chain Via Varejo SA to Amazon.
There is no new development and no new partnership to report about the ongoing sale process of Via Varejo in Brazil, Casino said.
Speculation that the current agreement between the two companies in France could lead to future larger deals saw the shares of Casino jump by as much as 9.7 percent in morning trade.
There were expectations that Amazon could either buy a retailer or partner with one in France after the e-retailer struck a deal to sell products from the British supermarket chain Morrisons for Amazon Prime and the acquisition of bricks-and-mortar retailer Whole Foods Market Inc for $13.7 billion last year.
The Amazon Prime Now app and website would make use of a dedicated virtual store for to make available groceries which would be sourced from Monopix, the two companies said on Monday.
While not ruling out an expansion of the services to other parts of France, Monoprix CEO Regis Schultz said that initially, the deal is limited for the lucrative Paris market and the suburbs.
Schultz said: “We do not discuss the future” when asked about whether this deal would result in more deals with Amazon.
There are almost 800 upmarket stores in over 250 cities in France that are owned and operated by Monoprix which makes it amongst the best-known store chains in the country. Similar to the strategy of Whole Foods, the focus of Monoprix is on fresh and quality food products. the revenues of the company regularly cointribute significanbtly to the overall revenues of the Casino group.
 “We consider the Monoprix product selection as exceptional,” Amazon France CEO Frederic Duval said.
None of the companies divulged the financial details of the deal. However, a busines model arrangement where the order would be taken by Monoprix while the delivery would be taken care of by Amazon is a profitable model for the company, Schultz said.
Last year Casino signed a partnership for delivery of products with UK online retailer Ocado.
French retailers had been attempting to enhance the online offerirngs that they make following speculation that Amazon would enter Europe and France could be its next target after the Whole Foods acquisition.
“Since the deal with Ocado will not start working until 2019, Casino needs to protect Monoprix from Leclerc, which has started home delivery in Paris,” wrote Kepler Cheuvreux analysts.

Christopher J. Mitchell

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