Reliance Industries Limited, India’s largest publicly listed company is all set to take on Amazon, the largest e-commerce platform in the world. The e-commerce market in India is in the advanced stage of consolidation like the telecom sector. The telecom sector has consolidated between three big players- Airtel, Vodafone-Idea, and Jio while the e-commerce market is majorly shared between Amazon and Flipkart. Any small player does not have the deep pocket to take on Amazon and Walmart backed Flipkart. The Indian industrialist who could be trusted to give tough competition to two of the largest multinational companies is Mukesh Ambani and now the man seems to be in the game.
Mukesh Ambani announced the entry of Reliance at the inauguration of the three-day Vibrant Gujarat summit. “Jio and Reliance Retail will launch a unique new commerce platform to empower and enrich our 1.2 million small retailers and shopkeepers in Gujarat, which are part of the over 30-million (retail) community in India,” said Ambani in Gandhinagar. Mukesh Ambani laying more emphasis on small retailers and shopkeepers is important as the large e-commerce players earlier faced a setback because the government decided to check the e-commerce platforms operating on ‘marketplace model’ such as Amazon, Flipkart, and Paytm mall to enter in exclusive deals with specific players.
Reliance will enter in e-commerce market with innovative online-to-offline (O2O) model. It will also explore the untapped rural and small towns market for e-commerce and is expected to be outside of the discounting game. Earlier, the big e-commerce players were involved in a heavy discounting game with exclusive deals from particular retailers who were backed by the platform itself. The small retailers were being pushed out of business through this unethical practice. Reliance is likely to give more importance to these small retailers. The company itself has 4,000 reliance retail stores and 4,000 Jio outlets which are expected to be scaled up to 10,000 in upcoming months.
Ambani also took on foreign players by calling for movement against Data colonization. “In this new world, data is the new oil. Data is the new wealth. India’s data must be controlled and owned by Indian people and not by corporates, especially global corporations,” said Ambani. “For India to succeed in this data-driven revolution, we will have to migrate the control and ownership of Indian data back to India, in other words, Indian wealth back to every Indian,” he added.
In recent years, the speculations were rife that the Amazon might gradually take over the Indian e-commerce market without any tough competition whatsoever. But news of Walmart’s taking over Flipkart and then Reliance’s entry has nicely poised the competition among different players in the e-commerce market. These companies pose a serious threat to Amazon’s rise as they have deep pockets (a lot of cash to burn) like their rival Amazon and with a good number of shareholders with patience. The entry of Reliance is the most worrisome thing for the Amazon because it is one of the most ruthless competitors in the world. Reliance works out for a complete domination in whichever sector it enters be it textile, refinery, or the telecommunications market. Its entry in telecommunication has traditionally forced the existing players to bottom out their prices to remain in the market and it already has achieved almost 20 percent of market share within two years. In the Reliance Annual General Meeting (AGM) this year, the company announced that it will enter in the e-commerce and broadband market.
The company aims to provide an immersive shopping experience to Indians on their mobiles or large screens using augmented reality, holographic technology, and VR devices. Reliance plans to create a hybrid online-to-offline platform that connects customers to nation’s small shopkeepers. The company is already dabbling in Jio-branded payments and cloud services, and it is also a big owner of news, movies, and music. It will be very easy for Reliance to collect the data about what consumer wants due to its strong presence in the sector from retail to new.
There is not an iota of doubt among analysts that Ambani-led Reliance will give tough competitions to existing e-commerce players as the history of its operations in other sectors suggests. The upcoming years will give us a good show on the competition in the Indian e-commerce market especially between the richest man in Asia and the richest man in the world.