India, with its more than 1.3 billion people, has become a fierce battleground for Amazon.com Inc., and the company has committed some .5 billion to building up its network there. (Photographer: Ruhani Kaur/Bloomberg)
Reliance Industries Ltd. will roll out its online shopping platform to 1.2 million retailers and store-owners in western India, starting on an ambitious plan to take on Amazon.com Inc. and Walmart Inc.’s Flipkart on its home turf.
Mukesh Ambani, Asia’s richest man, intends to take on the world’s largest retailers by combining his Jio telecom service, mobile devices and a vast physical retail network. A new offline-to-online platform will probably be launched in 12 to 18 months across the country, according to people familiar with the matter, who asked not to be identified as the plans aren’t public.
The energy-to-consumer conglomerate joins Amazon and Flipkart in expanding aggressively in the world’s fastest-growing major e-commerce market, where organized retail is still a rarity. Jio currently has 280 million telecom subscribers, while Ambani’s retail arm operates nearly 10,000 outlets across more than 6,500 Indian cities and towns.
“Jio and Reliance Retail will launch a unique new commerce platform to empower and enrich our 12 lakh small retailers and shopkeepers in Gujarat,” the Reliance chairman said at an event in the state on Friday. Twelve lakh is equivalent to 1.2 million.
Trials of the company’s new initiatives are ongoing in six cities including Mumbai, Kolkata, Chennai and Bengaluru.
As the initiative expands, Reliance Industries will look to enlist more neighbourhood mom-and-pop shops — which make up about 90 per cent of India’s retail landscape — as distribution and delivery centers for some products that will be available on its mobile platform, the people said. The company’s wholesale stores will help stock these mom-and-pop operations, they said.
Reliance then plans to launch an e-commerce platform more directly tied to its Reliance Retail stores and to the neighbourhood stores, according to the people.
Rules Tightened
Last month, India tightened rules that will disallow foreign-owned online retailers from selling products via companies in which they own equity, and forbid them from pushing merchants to sell exclusively through their platforms. The rules are expected to affect the operations of Amazon as well as its rival Walmart, which acquired Flipkart Online Services Pvt in a $16 billion deal. They’re expected to benefit local enterprises such as Reliance.
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Ambani has been gradually revealing details of his plans in e-commerce. In July, he said his platform would use augmented reality, holographs and virtual reality to create an “immersive shopping experience.”