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POST TIME: 2 January, 2020 00:00 00 AM
Reliance takes on Amazon with launch of e-commerce platform
FT, New Delhi

Reliance takes on Amazon with launch of e-commerce platform

Mukesh Ambani’s Reliance Industries is rolling out an early version of its much-anticipated online retail service, seeking to use its enormous digital subscriber base as a platform to take on global ecommerce giants.

The conglomerate run by Asia’s richest man has started inviting consumers in some suburbs of Mumbai to sign up for home grocery delivery, as a precursor to a broader ecommerce launch.

Reliance, whose core business centres on oil refining, has a sizeable retail presence. It runs grocery stores, partners with brands such as Armani and Tiffany in India, and last year bought iconic toy retailer Hamleys. In 2016 it upended the telecom market when it launched Jio, an operator that has grown to about 350m subscribers and expanded into other digital services such as home broadband.

Mr Ambani has since set about expanding his online businesses, first announcing plans for a “new commerce” venture in January. The company has emerged as the most formidable competitor to India’s existing ecommerce leaders, Amazon and Walmart-owned Flipkart.

Those companies, for whom India represents a potentially crucial market, suffered last year when the Indian government introduced rules restricting the ability of foreign-owned platforms to sell inventory from their own subsidiaries.

Analysts said that created an opening for companies such as Reliance, which as domestic businesses were not affected by the regulations, to enter the ecommerce sector.

Unlike its competitors, Reliance plans to centre its ecommerce venture on connecting local shops to customers, who will use an app to place orders that the retailers themselves will then deliver. Reliance says the platform, known as JioMart, will provide free delivery on tens of thousands of products, with up to Rs3,000 ($42) off for new registrants.

Reliance says this model will allow it to use its technology platform to tap into India’s vast network of small neighbourhood stores known as kiranas, while easing the burden on the company to build up a costly delivery network.

“This will modernise even the smallest neighbourhood kirana shop to become a future-ready digitised store,” said Mr Ambani in August.

A person familiar with the plans said the company wanted to eventually broaden its ecommerce venture to incorporate Reliance’s existing retail operations and Jio customers through loyalty programmes and other incentives.