Reliance Industries, India’s largest private sector corporation spanning energy, retail, and telecom services, resolved to bring more BDE (big delivery energy) to 2020. Earlier this week, Reliance's retail arm began rolling out its answer to the global e-comm wars: a new online retail service called JioMart.
The details: JioMart will play matchmaker, offering free deliveries on tens of thousands of products from local retail partners without stocking inventory itself. It's starting by delivering over 50,000 grocery items in three neighborhoods surrounding Mumbai.
The context: Reliance Retail is India's largest retailer by revenue.
- It serves more than 3.5 million customers per week via nearly 10,000 stores across groceries, toys, and jewelry.
- Reliance also operates India’s second-largest telecom service provider, Jio. It’ll be able to pitch its new delivery service to Jio’s 360+ million subscribers.
The underwriter: Mukesh Ambani, Reliance’s chairman and Asia's richest man. His net worth is nearly $60 billion.
Home aisle advantage
Reliance’s e-comm service arrives on the cusp of explosive growth for online shopping in India. The country's e-comm market is expected to reach $230 billion in 2038, up from $26 billion in 2018, per Morgan Stanley data cited by the FT.
All that opportunity has encouraged Amazon and Walmart to move in.
- Amazon acquired a 49% stake in Future Coupons, a subsidiary of India’s second-largest retail chain, Future Retail, in August. It also opened its first campus outside of the U.S. in Hyderabad, India, last year.
- Walmart acquired a 77% stake in Flipkart, a leading online retailer in India, for $16 billion in 2018. It also operates 28 wholesale stores throughout the country.
But they’re not guests of honor. Last year, India introduced e-commerce regulations intended to stymie foreign retailers’ growth and protect domestic small businesses. The measure paved the way for Reliance’s JioMart, which a) intends to support the small shops making up almost 90% of India’s retail sales and b) push Amazon and Walmart out of the picture entirely.
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