Competitor To Flipkart And Amazon
Reliance Jio, the Mukesh Ambani-led Reliance Industries phone and data services subsidiary, is readying for its biggest bet yet — an expansion into ecommerce with an app that will serve millions of Indian kirana or small, neighbourhood stores.
The app, it is expected, will be a one-stop shop for offline merchants to get on to Reliance’s ecommerce platform; manage their inventory, logistics and supply chain requirements; accept payments and credit money back; and place orders from Reliance’s cash-and-carry or wholesale mega-stores.
Reliance is already piloting the app with 5,000 kirana stores in Mumbai and Ahmedabad. It expects to roll it to out across merchants the country by the end of the year and scale it up next year.
Interestingly, both Flipkart and Amazon are also slowly bolstering their offline presence. Amazon recently picked up a 5% stake in Shoppers Stop for $27.8 Mn(INR 180 Cr), signalling it’s looking beyond online to expand its presence in the Indian market and that success in retail would not come merely from an online presence, given that ecommerce is still less than 5% of total retail sales in India. Amazon India also planned to open 12 offline stores in three Indian cities to facilitate its fashion sale event. The ecommerce major has made this move to facilitate its upcoming sale event. As per Statista, in 2015, e-retail sales accounted for 1.7% of all retail sales in India, are expected to grow to 3.6% this year and this figure is expected to reach 4.4% in 2019.
Hence with Flipkart and Amazon pushing to expand offline, Reliance Retail will have to move in their opposite direction if it intends to enter the ecommerce space, famous for its wafer thin margins. Given the fact that it too has no dearth of funds, Reliance Retail could prove a formidable competitor to deep pocketed Amazon and heavily funded Flipkart, though both have a considerable head start in the game. It remains to be seen after creating mayhem in the telecom space last year with Jio.
Seems Reliance repeat the same with ecommerce next year!