The e-commerce market is set to hit $50 billion by 2022 in India. It was quite evident since a couple of years that Reliance had wanted to be a part of it.
Amazon was set to dominate the e-commerce market in India. Wal-Mart Inc acquired Flipkart in 2018 to give Amazon some competition.But the battle for the Indian consumer couldn’t just be an All-American affair. Indian billionaire Mukesh Ambani, the man behind India’s largest public listed company in terms of market capital Reliance Industries Limited, turned tables when he announced that his company was creating the world’s largest online-to-offline new commerce platform. This will be done through a partnership with Reliance Retail and Reliance’s telecom unit Jio.
Business Finance Expert: Varun Shah, from Your Retail Coach, says, “It is a good move to promote the Indian business sector. From a financial point of view -both for the Indian economy and the secondary sector, it is going to be a upward growth trajectory if an Indian company comes in the race to acquire market share and gives competition to the American Conglomerates. It is also going to help make the country self-sufficient.”
There is a three-dimensional plan in place to connect the 30 million small retailers of India with the consumers. First, small retailers will be connected to nearby Reliance Retail Ltd’s almost 10,000 stores, imparting them common inventory-control, billing and tax structures in addition to low-price fee terminals. They plan on integrating the physical and digital market place in a uniquely collaborative “Bharat-India Jodo” enterprise. With 7500 physical retail stores already all over the country, the company plans on opening 4000 more stores by next year by 2020.
Next is Reliance’s telecom business Jio. Of the country’s 500 million active internet customers, almost two hundred million stay in rural regions in which one out of four is going online less than once a month. Reliance Jio information comm. ltd. has a huge share of 280 million of these digital subscribers. The unique selling proposition of Jio as a 4g telecom provider-and the revolution it has brought in reducing information and internet carrier fees, means that even a store in a remote village or semi-rural town can now profitably transact with less prosperous customers by using a hybrid offline-online version. The company is aiming at opening 50,000 Jio point across country by 2019.
Third, Indians are watching almost five billion hours of video a month on their cellular phones and fiber broadband connections with Jio. That offers Ambani, heft to sell personal-label style, presently housed below the logo Ajio. It will also help him expand in the retail sector digitally especially in the field of all things fashion. The proposed hybrid platform is expected to bring 35 crore customers to Reliance Retail and 21.5 crore Jio customers together. “Our digital tools will predict and anticipate the need of shoppers. This will be made possible by augmented reality, holographic technology and VR devices. Jio Giga Fiber will bring the entire marketplace to large screens powered by high speed broadband at home.” Mr. Ambani added.
Additionally, Ambani’s potential to steer policies in his home market shouldn’t be underestimated either. The Indian government’s new tweaks in the e-commerce sector has major giants like Amazon and Wal-Mart lobby frantically against these regulations which they feel will severely disrupt their business. From 1/02/19, no seller on a foreign-funded marketplace will be allowed to source more than 25 per cent of its goods from a company affiliated with the marketplace. This law will not be applicable to Reliance as it is an Indian based company. Mr. Ambani is also supporting the Indian governments push for data “localization”
The e-commerce market is set to hit $50 billion by 2022 in India. It was quite evident since a couple of years that Reliance had wanted to be a part of it. It will be however a task for them to match up the customer satisfaction level that Amazon and Flipkart have established. Business strategy & Planning Expert Rupal Agarwal, from Your Retail Coach (YRC) feels that, “The Indian market has just started getting its exposure in the e-commerce sector. The Indian market is humungous. Amazon and Flipkart may not be affected in a very big way as they are already headed towards acquiring their market share.”