Reliance Industries plans to start “hybrid online-to-offline” retailing, combining its telecom service with the chain of 7,500 brick-and-mortar stores and bringing legions of kirana outlets on a technological platform that will pit it against e-commerce giants Flipkart and Amazon.
“It will be a hardware -plus-software play through which anybody can buy anything from anywhere, whether it is a consumer, a seller or a manufacturer,” said a person familiar with the company’s plan. The endeavour will leverage the strengths of Reliance Retail and Reliance Jio Infocomm.
“As Reliance transitions to become a technology platform company, we see our biggest growth opportunity in creating a hybrid, online-to-offline new commerce platform,” chairman Mukesh Ambani said at the company’s annual general meeting in Mumbai on Thursday. “We shall create this by integrating and synergising the power of Reliance Retail’s physical marketplace with the fabulous strengths of Jio’s digital infrastructure and services.”
The source said Reliance is working on a multi-channel platform — to be branded soon — where consumers, businesses and manufacturers can access goods and services from anywhere — online or through offline stores.
The Reliance platform will display choices available for customers nearby or through other online and offline players and the company will deliver products or give buyers the option of picking them up from its network of stores or the outlets of its last-mile delivery partners.
By combining Reliance Retail’s wide presence, established supply chain and deep insights of the Indian market with growing Jio connectivity, the Mumbai-based conglomerate expects to emerge as a major player in the domestic online retail market. Reliance’s entry into e-commerce may prove disruptive for Flipkart, Amazon and Paytm, which have been increasingly focusing on small cities and towns.
“In theory, Reliance has all the elements for success and have also been disruptors in the telecom industry, so that gives them some sort of running start,” said Devangshu Dutta, chief executive officer of Third Eyesight, a retail consulting firm. “But to say that they will be taking on Amazon is overstating the case. Amazon has a head start, given their retail experience of 20 years. In India also, Amazon’s growth trajectory is pretty steep.”
Reliance plans to tap millions of kirana and small stores by bringing them on to the new platform and providing them with Jio technology as well as logistics, inventory management and accounting support, among others.
“… We will enable them to do everything that large enterprises and large e-commerce players are able to do,” Ambani said. “Hence, we will integrate the physical and digital marketplaces in a uniquely collaborative Bharat-India-Jodo enterprise.”
ET was the first to report in its November 15 edition that Reliance was working with neighbourhood stores and consumer brands to pilot its e-commerce business.
The new platform will seek to bring together the 350 million customers that flock to Reliance Retail’s outlets annually and the 215 million Jio users, Ambani said, without elaborating.
He said about 30 million small shopkeepers who buy merchandise from the Reliance Market cash-and-carry chain will provide “last-mile physical market connectivity.”
“We see merchants and small shop owners as critical customer interaction and fulfilment points, who will share a mutually beneficial win-win relationship with us,” he said.
Ambani said his company will invest in data analytics engines using artificial intelligence to bring a powerful offering to all consumers, merchants and small businesses, to expand its consumer businesses — Jio and Retail. The company’s consumer business accounted for about 13% of its consolidated operating profit, up from 2% last year.
Reliance will offer point-of-sale systems to shop owners as it builds a seamless online-to-offline retail channel using augmented reality, holographic technology and predictive analysis.
Merchants “will be able to manage inventory, keep digital records and file returns, improve working capital management, retain and upgrade customers, access new customers, run promotion and loyalty programmes, (have a) link to our highly efficient supply chain, and much more,” said Ambani.
Under its present plan, Jio will send digital coupons of various brands to customers who can use them at neighbourhood stores to buy those products for a discount. Stores enrolled by Jio will be equipped with software on their phones or tablets to read the digital coupons, ET outlined in its November report.
