RIL to enter e-commerce market riding on Reliance Retail and Jio
06 July 2018
Reliance Industries (RIL) on Thursday unveiled plans to enter the booming e-commerce market leveraging the 350 million footfalls at Reliance Retail stores, 215 million Jio subscribers and an expected 50 million fiber broadband homes and 30 million small merchants.
Addressing Reliance Industry’s 41st annual general meeting in Mumbai, the company’s chairman and managing director Mukesh Ambani said he sees the biggest growth opportunity in creating a hybrid, online-to-offline e-commerce platform as the conglomerate, whose operations span from telecom to petrochemicals, makes the transition to a technology platform on the back of Jio.
“We shall create this by integrating and synergising the power of Reliance Retail’s physical marketplace with the fabulous strengths of Jio’s digital infrastructure and services,” Ambani said.
Reliance’s move follow the recent acquisition of a majority stake in Indian retail major Flipkart by the world’s largest retailer Walmart for around $16 billion. India’s e-commerce market is expected to grow from around $25 billion at present to around $50 billion by 2022, according to industry estimates.
Ambani said RIL is well-poised to take a leap into the e-commerce market, which is currently dominated by few large players, including Amazon, Flipkart, Jabong and Myntra (both Myntra and Jabong are owned by Flipkart).
“We will integrate the physical and digital marketplaces in a uniquely collaborative “Bharat-India Jodo” enterprise,” Ambani said.
Reliance Retail operates around 7,500 physical stores across India in categories ranging between grocery and electronics. It opened 4,000 stores last year.
Reliance Digital is the largest retailer of consumer electronics in the country and e-commerce giants currently get around 60 per cent of their revenue by selling consumer electronics and smartphones, Ambani said.
To go head-to-head with Myntra and Jabong, RIL will use Reliance Trends that sells fashion apparel. It even competes with Walmart’s and Metro Cash & Carry’s wholesale businesses by running its own cash & carry business.
With Walmart joining the fray in India’s retail market, RIL is expected to leverage its grocery retailing arm Reliance Fresh for its e-commerce push.
The oil-to-retail conglomerate is looking for growth in e-commerce after spending as much as Rs250,000 crore ($36.3 billion) in setting up mobile and fiber broadband infrastructure, Ambani said.