Reliance Industries Ltd. plans to take on the likes of Amazon.com Inc. and Walmart Inc. in India’s retail industry by creating a platform that combines online and conventional shopping, as per media reports.
Mukesh Ambani outlined the plan Thursday at the company’s annual shareholders’ meeting in Mumbai saying Reliance saw its “biggest growth opportunity in creating a hybrid, online-to-offline new commerce platform.” The effort will involve the group’s Reliance Retail Ltd. and Reliance Jio Infocomm Ltd. businesses, he said. The latter will also introduce a fiber-based broadband service by 15 August.
Global retail powerhouses like Amazon and Walmart have been investing in India’s retail industry, where e-commerce sales may more than double to $72 billion by 2022.
The retail-to-refining conglomerate is looking to tap the online market after spending as much as Rs 2.5 lakh crore ($36.3 billion) in setting up mobile and fiber broadband infrastructure, Ambani said.
The platform will use augmented reality, holographs, and virtual reality to create an “immersive shopping experience,” Ambani said, without giving a timeline or financial targets.
The service will be available to small merchants as well, enabling them to “do everything that large enterprises and large e-commerce players are able to do.”
Other news from the shareholder meeting:
- Jio aims to introduce fiber broadband, JioGigaFiber in 1,100 cities nationwide
- The e-commerce venture will leverage 350 million footfalls in Reliance Retail stores, 215 million Jio subscribers, and the target of 50 million fiber broadband homes and 30 million small merchants
- Carrier has introduced JioPhone2, an upgraded version of the feature phone offered for an initial price of Rs 2,999. The upgrade allows access to Youtube, Whatsapp, and Facebook.
The announcements didn’t enthuse investors. Reliance shares fell 2.6 percent to Rs 964.50 in Mumbai while S&P BSE Sensex ended the day 0.2 percent lower.
Hathway Cable and Datacom Ltd., a provider of cable television and broadband services, plunged 15 percent, its biggest decline since 2010, while DEN Networks Ltd. dropped 10 percent on concern entry of Ambani’s Jio into the industry will intensify competition.
“Whether it’ll be disruptive or how disruptive it could be, will depend on how Jio’s broadband product is priced and packaged,”
said New Delhi-based Amresh Nandan, vice president at Gartner India.
“If the broadband product comes bundled with content and mobile connection besides attractive pricing, then Jio can capture the attention of users.”
The carrier may look to gain fiber broadband subscribers by offering lower prices and some free services, a strategy that worked for Jio’s phone services.