Mukesh Ambani’s master plan to position Reliance Industries aka RIL as the top dog in Indian e-commerce is slowly starting to unfurl.
To strengthen its digital offerings, RIL is now aiming to acquire two of the most prominent startups in this space – online furniture brand Urban Ladder and the milk delivery platform Milkbasket.
According to a media report, people who are closely tied to the Urban Ladder discussion have reported that the deal could be somewhere around the ballpark of $30 million and will come along with a further infusion of cash in the business and an ‘earn-out’ for the management team as well.
Additionally, the sources, under the condition of anonymity, also mentioned that RIL and Urban Ladder are now at an advanced stage of finalising the deal as the discussion was initiated a couple of months ago.
Much like grocery, in the last few months, Urban Ladder witnessed a steady rise in sales of furniture mainly in the work-from-home setups. As of now, the startup has close to a dozen offline stores across India which accounted for a major portion of their sales before the lockdown. Urban Ladder, which has raised $115 million in total, also held discussions with Flipkart and FabIndia earlier for a sale but those didn’t fructify.
On the other hand, for Milkbasket, after previously failing to crack a deal with Amazon and Bigbasket, their chances with RIL seem to be pretty good. Their discussions have been reported to be inching towards finalization as well.
During the lockdown, the company observed a 2.2 to 2.5 times increase in average order value across 130,000 active user base along 500-1,000 new signups on a daily basis.
Milkbasket currently operates in Gurgaon, Noida, Dwarka, Ghaziabad, Hyderabad, and Bengaluru and fulfils needs of close to 130,000 households and with 9,000 products ranging across fruits and vegetables, dairy, bakery, and other FMCG categories.
RIL’s E-Commerce Gameplan
Morgan Stanley, the investment banking and financial services company, has estimated that e-commerce will account for 15% of Reliance Retail’s estimated $19 billion worth core retail sales by 2023.
Since 2017, the conglomerate has spent close to $3 billion in acquisitions, most of which has been to boost its retail arm – Reliance Retail. Thus, Ambani’s master plan to reposition RIL into the Indian digital ecosystem and conquer e-commerce is not something new.
RIL has been going after major category leaders such as – Fynd which is an O2O commerce platform (acquired for INR 295 crores), Hamleys the toy retailer (acquired for INR 620 crores), Grab which is a leading last-mile logistics company (acquired for 106 crores), and many more.
Apart from the Urban Ladder and Milkbasket deal, RIL is also in talks of acquiring Future Retail, the deal size of which is estimated to be close to a whopping $3 billion.
They have also started discussions with the e-pharmacy startup Netmeds and the lingerie retailer Zivame for acquisition however not much is known about its progress with the same.
All of this has been slowly building up the petrochemicals giant to become a homegrown e-commerce giant which it undoubtedly is all set to become in the near future now that they have launched JioMart.
Ambani has said that the platform will soon start selling everything from electronics and fashion to healthcare and other retail products. Therefore it will definitely be interesting to observe their future developments regarding the same. Stay tuned for more updates.
