Tuesday 18 November 2014

Billionaire Ambani Makes Quiet Entry Into India's E-Commerce Sector

Even as foreign investors like SoftBank’s Masayoshi Son and Amazon’s Jeff Bezos are pouring billions in venture capital into India’s galloping online commerce market, Mukesh Ambani’s Reliance Retail has taken its first steps into the crowded sector without any marketing or fanfare.
Reliance Retail’s Reliance Fresh Direct virtual store has started taking online orders for groceries, fresh produce and household items, offering the service in a few neighborhoods in Mumbai city at the start.
Ambani tops Forbes’ list of Indian rich with a net worth of $22.7 billion and his Reliance Industries is India’s largest business conglomerate.
Reliance’s retail subsidiary, Reliance Retail launched in 2006 with its first Reliance Fresh store. Today, it has over 700 stores in 93 cities, and is India’slargest retailer by revenues.
On its latest online foray, a spokesperson for Reliance Retail said, “We continue to explore newer markets and channels to leverage our solid foundation. The launch of reliancefreshdirect.com adds the ‘direct delivery channel to our network besides providing convenience and choice to our customers.” Refusing to elaborate on the company growth plans in e-commerce, the person simply said, “We will augment the direct delivery model over time.”
Several online-only grocery retailers such as BigBasket and LocalBanya already operate in Indian cities. Online grocery shopping is catching on as customers in large cities attempt to avoid traffic on the roads and the rush at the malls. Competitive pricing and a wider selection of products is also drawing in shoppers.
E-commerce is said to reach $100 billion in the next five years from $15 billion currently, according to estimates. India has thousands of online retailers, big and small, selling an array of products and services.
Several traditional grocery retailers are preparing to jump in too. Kishore Biyani’s Future Retail is preparing to make an entry as is billionaire Kumar Mangalam Birla’s Aditya Birla Retail which runs the More chain of hypermarkets and supermarkets.
Reliance Retail's newly-launched online foray currently operates only in some neighborhoods of Mumbai
Reliance Retail’s newly-launched online foray currently delivers in select neighborhoods in Mumbai
India’s online grocery segment is no cake walk as brick-and-mortar grocery retailers to transition to online sales. Supply chain challenges and logistics bog the inherently low-margin business.

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