Jio and Reliance Retail will launch a new commerce platform that will empower as many as three crore small shopkeepers in India. The platform is expected to bring win-win benefits to consumers, retailers and producers. Reliance currently has nearly 300 million customers using its Jio service along with 10,000 outlets of its retail arm in over 6,500 cities in India.
With this new online venture, the Indian e-commerce market led by foreign players including Amazon and the Walmart-owned Flipkart is expected to see a dominant third player. Reliance has an ecosystem of entertainment, financial services, payment gateway, etc. Once it has customers hooked on to these services, then it is a question of time before it can start offering merchandise as well.
Moreover, unlike Amazon or Walmart, home grown Reliance doesn’t have constraints around restrictions on FDI in e-commerce. This might give it a regulatory edge over existing e-commerce biggies.
Reliance’s burn rate for the new e-commerce venture is also expected to be lower. With near 300 million Jio customers, it won’t have to spend on acquiring customers. Also, since the company has a strong ebitda in the physical retail, it can leverage its sourcing, distribution, supply chain, private label etc.