Having disrupted the telecom space and usurping the incumbent players in the space, Reliance now aims to take a share out of the e-commerce pie in India which is being dominated by Walmart owned Flipkart and global giant Amazon. Reliance has been one organization that has raised a significant amount of funds in 2020 despite the pandemic and the subsequent economic hardships we have had to navigate through in the last 3 quarters. They have received significant investments from Silver lake, General Atlantic, Mubadala, TPG Capital, ADIA, and KK.
The retail division also registered a 30% growth over the previous quarter signaling the strength of the enterprise in these testing times. “With a supposed 47k crore war chest, a 12000+ retail store network spread across 6600 towns and cities, one of India’s largest cellular and Broadband Services network and a slew of complementary OTT platforms, Reliance is more than capable of taking on the western behemoths in the space,” feels Praveen Sinha Jabong Co-Founder.
Why am I bullish on Reliance’s chances?
“There are plenty of reasons why Reliance Retail through Jiomart has all the ingredients to wrestle away a huge share from its western counterparts”, says Jabong Co-Founder Praveen Sinha.
- Reliance’s proven track record will serve them well in e-commerce. They are no strangers to the retail business and online expansion is actually just an adoption of the hybrid model of combining both offline and online sale channels.
- The other players simply cannot match Reliance’s extensive offline channels. With over 12000 stores, Reliance has a guaranteed presence in almost every major town or city in India, which gives them a significant advantage over the other e-tailers.
- The ability to communicate and the market for free to their extensive internet and cellular network subscriber base. Jio has millions of consumers to whom Jiomart can reach out to for free through a variety of message delivery options. This lends them another significant advantage.
- The Facebook connection. “The Facebook investment into Reliance Platforms will possibly come with significant advantages for the RIL family, with the ability to leverage the social network for promotions and partnerships. It is believed that Reliance Retail is also exploring the integration of WhatsApp payments to boost adoption”, explained Sinha.
- Aggressive takeovers: After snatching a 96% stake in UrbanLadder, Reliance Retail tried to buyout Future Group’s retail, wholesale, and logistics divisions, a deal believed to be worth 24,713 cr. This deal is presently stalled due to an injunction filed by Amazon, but one can imagine the absolute muscle of Reliance Retail if this goes through eventually.
- Aatmanirbhar Bharat narrative – The need and demand for desi alternatives to foreign ones continues to gather steam and Reliance is a household name in the country. It is a no brainier that Jiomart will see widespread adoption.
Conclusion
Reliance has grabbed opportunities by the throat during the pandemic and will look to consolidate their investments in the space in the coming year. This will likely bring yet another price war scenario in the e-commerce market and we know from the telecom saga that Reliance is not shy to wage a price war. It is going to be interesting to watch how these massive enterprises navigate through the competition, but in the end, the consumer seems set to benefit in their quest for supremacy, concludes Praveen Sinha.
