Flipkart is securing a 7.8% ownership position in Aditya Birla Fashion as the Indian e-commerce company, backed by Walmart, intensifies its focus on the clothing sector within one of the world’s most significant retail landscapes.

The e-commerce organization will invest $203.8 million for its share in Aditya Birla Fashion and Retail, a large business operating more than 3,000 retail locations, including the Pantaloons apparel stores. As a key component of this significant strategic alliance, Flipkart will also handle the sales and distribution of various brands owned by Aditya Birla Fashion and Retail. (The prominent Indian fashion retailer, for example, holds the license to market Forever 21 products in India.)

The announcement made on Friday represents the newest development in the competitive environment among Flipkart, Amazon, and Reliance Retail, led by Mukesh Ambani, as they strive to influence Indian consumer shopping habits. While Flipkart and Amazon are actively working to increase their market share in India’s expanding e-commerce sector, Reliance Retail is gradually extending its presence into the digital realm.

Reliance Retail currently holds the position of the largest retail chain in India—a position strengthened by its acquisition of a substantial portion of Future Retail, the country’s second-largest retail chain. Future Group and Amazon are currently involved in a legal dispute concerning Future Group’s agreement with Reliance Retail. Amazon contends that Future Group’s sale of assets to Reliance Retail constituted a violation of their contractual agreement. (Amazon, having invested in a Future Group company, possessed the initial right to consider any future transactions involving Future Retail.) Reports from local news sources indicate that Amazon had also explored the possibility of acquiring a stake in Aditya Birla Fashion and Retail.

Kumar Mangalam Birla, chairman of the Aditya Birla Group, which manages the fashion retail company, stated in a filing with the stock exchange, “This partnership strongly affirms the potential for growth within India.” He further expressed a firm belief in the future of the Indian apparel industry, predicting it will reach a value of $100 billion within the next five years.

He also mentioned that the newly acquired funds will be utilized to reinforce the company’s financial standing. This is not the first instance of Aditya Birla Fashion attempting to expand into e-commerce. In 2015, the company launched Abof, but the initiative did not achieve sufficient success and was discontinued after two years.

Kalyan Krishnamurthy, CEO of Flipkart Group, explained that the two organizations will collaborate to “provide a diverse selection of products to fashion-conscious consumers through various retail channels nationwide.” He expressed enthusiasm about working with ABFRL and its established fashion and retail infrastructure to capitalize on the promising opportunities within the Indian apparel industry.

Flipkart currently leads in online apparel sales in India, largely due to Myntra, a fashion e-commerce platform it acquired in 2014. The Walmart-owned company has consistently made further investments to strengthen its fashion offerings. In July, Flipkart invested $35 million in Arvind Fashions, a component of a long-standing Indian retail conglomerate.

According to research from Forrester, the online apparel market is valued at $7 billion. It represents the largest product category for e-commerce companies in India, following smartphones.

Amazon has also established several partnerships with brick-and-mortar retail chains in India. In 2018, it purchased a portion of the More supermarket chain from the Birla Group. Additionally, it has acquired stakes in the department store chain Shoppers Stop.