reliance retail

Mukesh Ambani, The Chairman of India’s largest conglomerate, took everyone by surprise On September 5, 2016, when he launched Reliance Jio. The announcement changed the face of telecom forever. Since then it has been giving sleepless nights to all the telecom majors by providing free voice calls and dirt cheap 4G internet. Undoubtedly, Reliance Jio has managed to rupture the telecom majors ever since.

Looks like that was just the start for the Mukesh Ambani in the digital era. After capturing a sizable share of the telecom industry in a record time frame, Reliance Jio has set its eyes on another fastest growing industry in India, where existing players have managed to scratch the surface so far.

According to the reports, Reliance Industries Limited is all set to repeat the history by launching its brand new venture Reliance Retail. The news rolled out after the Annual General Meeting of Reliance Industries which took place last week. The market would witness the e-commerce sector with its retail arm, causing the entire industry to stand up and take notice.

Reliance Retail: The Battle Would Be Daunting

“Reliance Retail will be the biggest challenger to Flipkart, Amazon next year,” says T V Mohandas Pai, former CFO of Infosys.

E-commerce in India has been an enticing industry in itself, with the already fierce battle between Flipkart and Amazon. The recent acquisition of Flipkart by Walmart has already fueled the fire and e-commerce players are now busy in building a bigger war chest Without a shadow of the doubt, reports of Reliance’s entry into e-commerce has got tongues wagging.

Post this surprising revelation there was quite an evident excitement in the media. “Amazon.com Inc. had better watch out,” Mint said in its report.

E-commerce: Reliance Retail’s Impeccable Strategy

In early FY19, Reliance Retail would be all set to capture the sizable share of the Indian e-commerce sector. Reliance’s strategy includes linking of the manufacturers as well as the kirana stores to 136 million+ customers of Jio. It also plans to sell digital coupons online, which can be redeemed at kirana stores at discounted rates.

If reports are to be believed the company is already running a pilot project of this scheme in Mumbai, Chennai, and Ahmedabad. The people familiar to the matter also reveal that Reliance is looking forward to selling mobile phones, consumer electronics, FMCG items, and grocery in towns with 50,000 residents.

Flipkart and Amazon need to fasten their belts.

As a matter of fact, Mohandas Pai agreed as well.  “In e-commerce, the biggest threat to Amazon and Flipkart will be Reliance Retail because Reliance Jio is there all over India. They can easily connect to all the small retail stores and supply to them and improve their business dramatically,” he told PTI.

The Bigger War Chest

India is estimated to have over 525 million internet users by the end of 2018, of which, only 120 million will shopping online. Hence, it has a tremendously wide scope for new entrants.

The big news has already attracted a lot of eyeballs. Veterans are coming up with diverse reactions.

“The idea sounds innovative on the face of it, simply because it’s different. But anything that’s different is not innovation. It’s simply different. If I were a customer, I wouldn’t fall for it,” says K Vaitheeswaran, the author of “Failing to Succeed”.

Amazon has been planning to double up the investments in India. It has already committed to hitting at minimum $5 billion. The e-commerce behemoth is betting big on its India’s arm. After getting acquired by Walmart recently, Flipkart is also gearing up to cement its pole position in the Indian e-commerce market.

At the same time, Paytm Mall is also aiming to secure a lion’s share of the e-commerce market by banking on the vast experience coming from its largest investor, Alibaba Group.

It’s clear; Indian e-commerce players are busy in creating war chest bigger than ever before.

Time to Think Out-of-the-Box

Reliance Retail strategy to conquer the market would surely involve methodologies from those of current e-commerce giants. However, offering discounts and the lowest of prices to customers would not help them to create a differentiation. But, on the other hand, Reliance Retail has the backing of might Reliance Group and could offer jaw-dropping deals in a bid to capture the market. Despite all that Reliance Retail needs to think outside of the box to keep customers glued for returning business.

Who survives and who loses in the first test series, only time would unfold.