For the last few months, there were rumours about Reliance entering India’s e-commerce sector. The report has been finally confirmed. Reliance Jio and Reliance Retail is set to launch an e-commerce platform to enrich 12 lakh retailers and shopkeepers in Gujarat. There are over 3 crore e-commerce retailers in India.
Reliance CEO and India’s richest man Mukesh Ambani announced at the Vibrant Gujarat 2019 event that the conglomerate will be starting an e-commerce business in India. However, any more details are not available on how the e-commerce arm will function but it is for sure that it will operate on a completely different model from that of Flipkart’s and Amazon’s.
“In this new world, data is the new oil. Data is the new wealth. India’s data must be controlled and owned by Indian people and not by corporates, especially global corporations,” he said at the event. “For India to succeed in this data-driven revolution, we will have to migrate the control and ownership of Indian data back to India, in other words, Indian wealth back to every Indian,” he added.
It is expected that Reliance will use existing inventory held with small and medium shopkeepers and leverage the reach of its 5,100 Jio network dotted across the country. Reliance Retail holds a considerable market share of its own with chains like Reliance Fresh and Reliance Trends. It is one of the biggest retailers in India and it is possible that the new e-commerce arm may end up using this inventory.
Reliance Trends’ website already operates an e-commerce business through its website and delivers electronic goods like smartphones, laptops, camera and other accessories throughout the country. The recent development could pose a tough competition to already established e-commerce houses like Flipkart and Amazon.
Mukesh Ambani has a history of dominating industries and Reliance doesn’t enter any sector until it has a solid plan to dominate it. You may remember how Mukesh Ambani’s speech at the Jio launch crashed the stocks of other telecommunication companies and even led to the merger of Idea and Vodafone. Reliance Jio also acquired Hathway and DEN Networks to take on the market share.
There are several online shopping websites in India. Flipkart and Amazon are the largest of them in terms of valuation. Amazon India is valued at more than $16 billion and Flipkart is valued at $11.6 billion. With Reliance entering the game, the e-commerce space may turn into a battlefield and there might be upheavals in store for the e-commerce industry in the days to come.