NEW DELHI: Reliance Industries (RIL) on Thursday unveiled a plan to take on Amazon and Flipkart in India’s booming e-commerce market.
RIL chairman and MD Mukesh Ambani said, as the conglomerate, whose operations span from telecom to petrochemicals, makes the transition to a technology platform on the back of Jio, he sees the biggest growth opportunity in creating a hybrid, online-to-offline e-commerce platform.
“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, while addressing RIL’s 41st annual general meeting (AGM).
Revenues from India’s budding e-commerce industry is expected to hit around $50 billion by 2022 from $25 billion last year, according to industry estimates. The huge potential recently saw the world’s largest retailer Walmart spend around $16 billion for a majority stake in Bengaluru-based e-commerce company Flipkart.
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. For instance, Reliance Retail operates around 7,500 physical stores across India in categories ranging between grocery and electronics. It opened 4,000 stores last year.
While e-commerce giants currently get around 60% of their revenue by selling consumer electronics and smartphones, Ambani said, Reliance Digital is the largest retailer of consumer electronics in the country. 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 grocery becoming the buzzword for e-commerce players with Walmart joining the fray, RIL is expected to leverage its grocery retailing arm Reliance Fresh.
The proposed hybrid e-commerce platform by RIL is expected to bring together 35 crore customer footfalls at Reliance Retail stores, 21.5 crore JIO customers, targeted five crore Jio Giga Homes and three crore small merchants and shop-keepers across India, who provide last-mile physical market connectivity.
“Our digital tools will predict and anticipate the needs of shoppers,” Ambani said. “This will be made possible by augmented reality, holographic technology and VR devices. JioGigaFiber will bring the entire marketplace to large screens powered by high speed broadband at home.”