India’s business tycoon Mukesh Dhirubhai Ambani-led Reliance Industries has its major plans to enter the country’s e-commerce market which is worth $200 Billion. The company aims to join offline as well as online buying experience for its customers.
It is being reportedly stated that the plan will be carried forward by combining two units of Reliance Industries Ltd (RIL) namely Reliance Jio Infocomm Ltd and Reliance Retail Ltd. The company aims to build an e-commerce space established on O2O (online-to-offline) market programme and bring local merchants on board boosting up their sales with the help of this plan. The O2O model helps to drag customers from online medium to buy products from offline channels.
“Demand is going to come from tier 2 and 3 and 4 towns and cities. Then you need to have the ability to deliver at these places,” said a person familiar to the matter. “At present, the cost of delivery will be very high, making this unviable. So, you have to create local markets and be present everywhere, where you know the local merchants and local customers and Jio will have to connect them,” he added.
The business strategy being adopted by the company is similar to that of China’s e-commerce leader Alibaba. Reliance’s plans are to associate with the merchants and in turn, will help them to grow and earn profits. Through this step, Ambani aims to generate half of the group’s revenue from the consumer businesses over the next 10 years.
At present, Reliance Industries runs 7,573 stores and about 50 warehouses in over 4,400 cities in India. The revenue of the company amounted to Rs 69,198 Cr in the financial year 2017-18 and to make it even larger, it is expected to grow its network online.
The entry of Reliance Industries into the e-commerce space will increase the battle among the major Indian online platforms like Flipkart, Amazon and Paytm Mall among others. It will be quite interesting to watch how the industry grows and earns in the online space.