Mukesh Ambani Announces Plan To Take On Online Retail Giants Amazon And Flipkart
Mukesh Ambani, Asia’s richest man and Chairperson of Reliance Industries unveiled an ambitious plan to take on online retail giants Amazon and Walmart-Flipkart by combining Jio Telecom services, mobile devices and a vast physical retail network, reported Bloomberg. Reportedly, Reliance Industries Ltd will roll out its online shopping platform to around 1.2 million retailers and store-owners in western India.
Plan to take on online retailers
In July 2018 Mukesh Ambani announced the plan at the company’s annual shareholders’ meeting in Mumbai and said that the platform will use augmented reality, holographs and virtual reality to create an “immersive shopping experience”. He added that the service will enable small merchants to “do everything that large enterprises and large e-commerce players are able to do”.
According to the latest information, a platform combining online and conventional shopping will probably be launched within 12 to 18 months across the country. Announcing the move, Mukesh Ambani said in an event in Gujarat On Friday, “Jio and Reliance retail will launch a unique new commerce platform to empower and enrich our 12 lakh small retailers and shopkeepers in Gujarat”. Trials of the initiative are going on in six cities including Kolkata, Mumbai, Chennai and Bengaluru. A major step in the initiative would be to enlist neighbourhood mom-and-pop-shops (90 % of India’s retail) as distribution and delivery centres.
Reliance is very well placed to leverage its standing in the world’s fastest-growing major e-commerce market. Jio currently has 280 million telecom subscribers and Reliance’s retail arm operates nearly 10,000 outlets across more than 6,500 Indian cities and towns.
Rules have been tightened
This initiative is well-timed as the government has recently tightened rules for foreign-owned online retailers. The revised norms effective from February 2019 are aimed at protecting the interests of domestic players facing tough competition from foreign e-commerce companies having large amounts of money at their disposal from foreign investors, reported NDTV. The new rules require marketplaces to treat all vendors equally, bar foreign companies from featuring exclusive products on their products, selling products via companies in which the own equity, owning inventory and thus restrict their control on pricing and market which enables them to offer huge discounts.
The rules will affect both Amazon and Walmart which acquired a major stake Flipkart online services for $16 billion and benefit local players such as Reliance.