Amazon gets a new Indian rival in Reliance’s JioMart
Mukesh Ambani, Asia’s richest man, calls it ‘the nation’s new store’ that will battle Amazon and Flipkart for a slice of the e-commerce market
Mumbai — Reliance Industries has started testing its online shopping portal, moving a step closer to billionaire Mukesh Ambani’s goal of setting up a digital platform to take on e-commerce giant Amazon in India.
JioMart, open to select customers who pre-register, promises more than 50,000 grocery products, free home delivery and a return policy that asks no questions. Labeled “the nation’s new store”, it is available in only three neighborhoods surrounding Mumbai, according to the website.
The pilot site provides an early glimpse of how the energy-and-petrochemicals conglomerate, controlled by Asia’s richest man, is stepping up consumer offerings in a pivot toward newer businesses. With the unveiling of the portal, Reliance will join the battle with Amazon and Walmart’s Flipkart Online Services for a slice of an e-commerce market that KPMG says is set to grow to $200bn by 2027.
Ambani is giving shape to his online retail ambitions by spending billions of dollars on a string of small acquisitions. The newer businesses, including telecoms and retail, are likely to contribute 50% of Reliance’s earnings in a few years, from about 32% now, Ambani said in August.
A spokesperson for Mumbai-based Reliance declined to provide further details on the retail project.
Ambani’s previous project, which needed capex of almost $50bn, is already showing signs of success.
Reliance Jio Infocomm, the group’s wireless carrier started in 2016, is India’s leading operator today with more than 350-million users. The company entered the world’s second-largest market by giving subscribers free calls and cheap data, forcing some incumbents to exit or merge with rivals.
Ambani is seeking to replicate that success in online retail as well. Terming it “new commerce”, the tycoon said in August that his goal is to “completely transform” India’s unorganised retail market — mostly mom-and-pop stores — which accounts for 90% of the nation’s industry.
“This tech-enabled partnership will link producers, traders, small merchants, consumer brands and consumers,” Ambani told shareholders in August. After beta trials with thousands of merchants across the country showed promise, “we are now getting ready to roll out the platform at a larger scale”, he said.
Reliance has unveiled a sweeping plan to create a $24bn digital-services holding firm, and also vowed listings of the new businesses within five years.
Betting the plan will unlock value, investors have piled on Reliance shares, sending the stock soaring 36% by the end of 2019 against the 15% advance in the benchmark index. The gains have helped Ambani add more than $15bn to his wealth — the most in Asia — and taking his net worth to almost $60bn, according to the Bloomberg Billionaires Index.