After disrupting telecom industry, Reliance Jio is all set to disrupt e-commerce market by leveraging its vast network and subscribers in the country.
The company is working with kiranas stores and consumer brands to create an operational model that will enable shoppers to buy at neighbourhood shops using digital coupons via its Jio Money platform, according to a report by ET. A pilot project is already underway at Mumbai, Chennai and Ahmedabad. It plans the launch in phases. RIL would partner with 150,000 vendors.
However, Jio is yet to confirm the report.
Jio has reportedly tied up with ITC, Wipro, Dabur, Tata Beverages, Godrej Consumer Products and Amul, added the report. Existing e-commerce giants Amazon and Flipkart, too, are investing aggressively in all spheres to gain a greater market share of India e-commerce market.
Meanwhile, Jio would pose the biggest threat to Amazon and Flipkart, because it is a greater presence in all over India, according to industry experts. Amazon recently picked up stake in Shoppers Stop for $27.8 Mn and planned to open 12 offline stores in three Indian cities to facilitate its fashion sale event. Flipkart is also smartly investing in startups, which can add to its reach.
Jio will not burn any of its own money for offering discounts on products, said the person close to the deal. It plans to charge brands a fee for using its platform for ‘below the line marketing,’. The Jio Money app currently hosts e-commerce brands.
While Jio, with its bouquet of apps, will pose a threat existing players in the space, its broader impact is expected to be a boost for the growth of e-commerce and other Internet businesses in India.
India has $650-billion worth retail industry, only 3-4% is e-commerce and another 8% is controlled by organised retailers such as Shoppers Stop and Big Bazaar.
Last year, e-retail sales fell to an annualized $12 billion in June compared with $15 billion in December, according to estimates by research and advisory firm RedSeer Management Consulting.
RIL chairman Mukesh Ambani, who has invested close to Rs.1.5 trillion in his telecom venture, has previously described Jio as the world’s largest start-up. The company’s value of retail business, essentially food and groceries, accounted for 7.8% of its total revenue of Rs 2.76 trillion in 2015-16.
How e-commerce space will take the entry of Jio, remains to be seen. Will it create similar ripple in e-commerce, it had created in the telecom sector?