106 THE WEEK • JUNE 30, 2019
BUSINESS
RETAILMukesh Ambani’s hybrid model may disrupt e-commerce
just like how Jio changed the telecom sectorBY NACHIKET KELKAR
IF WHAT MUKESH AMBANI did to
the telecom sector by launching Jio
two years ago is anything to go by,
India’s e-commerce sector is in for
a huge disruption. Reliance Retail, a
subsidiary of Ambani’s Reliance In-
dustries Ltd, is already the largest re-
tailer in the country with more than
10,000 outlets in fashion, lifestyle,
grocery and electronics segments.
While that network will continue to
grow, it will also take a giant leap in
e-commerce.
Th e size of India’s organised retail
market is currently estimated to be
around 0 5 lakh crore, while the unor-
ganised market is at about 0 48 lakh
crore. Ambani is looking to transform
this unorganised neighbourhood
kirana market and give Reliance’s
e-commerce plans a platform. “Local
kirana stores is the real opportunity,”
said Gaurav Jain, head of strategy and
business development at Reliance
Retail. “Organised retail is still under
10 per cent. So, if you really want to
work with the rest, the broken, archa-
ic retailers, are the real partners.”
At the heart of this will be a point
of sale (POS) terminal, which the
company is currently testing across
cities. Th is POS terminal will not
only help merchants carry out the
common debit and credit card trans-
actions, but also enable them to keep
product inventory and order through
the wholesale store network, said a
source.
Consumers will be connected to
Reliance’s digital retail ecosystem
through a mobile app, which isRight click
Reliance
Retail’s
revenue in 2018-
19 was 0 1,30,566
crore, up 89 per cent
from the previous
yearalso being tested. Products bought
through the app will be delivered by
the neighbourhood store. “We have
been mapping customer journey
across the lifecycle,” said Jain.
Meanwhile, Reliance is plugging
the gaps in the system by making
strategic acquisitions. It will
buy Mumbai-based hyper-
local delivery company Grab
a Grub Services for 0 146 crore.
It has acquired C-Square Info
Solutions, a company that
provides software solutions
for distributors and retailers,
for about 0 82 crore. Th e acquisi-
tions, done through the subsidiary
Reliance Industrial Investments and
Holdings, will augment Reliance’s
e-commerce plans and strengthen
business-to-business and busi-
ness-to-customer logistics.
Th e big digital push will ride on
Jio’s network. Th e telecom company
has also taken the acquisition route
to gain expertise in new technolo-
gies. It acquired Haptik Infotech for
about 0 700 crore, a move that will
help it manage various touch points
and provide conversational, AI-ena-
bled devices to Indian users.
Last year, Reliance acquired a 5 per
cent stake in fi lm and entertainment
company Eros International for $46.6
million. It has also invested in the
music streaming app Saavn and Ba-
laji Telefi lms. “Th ese acquisitions are
part of the overall digital ecosystem
that we are creating,” said Jain. Th e
acquisitions will help Ambani take
on Amazon, which has establishedmmerce
Reliance is the
largest physical
retailer in India,
with 10,415 out-
lets and 22 million
square feet of retail
spaceReliance Retail’s
profi t before
depreciation,
interest and taxes
in 2018-19 was
0 6,201 crorepresence across online shopping and
video and music streaming.
Reliance reported a net profi t
of 0 39,588 crore on a revenue of
0 6,22,809 crore last fi nancial year.
Reliance Retail’s profi t before
depreciation, interest and taxes
stood at 0 6,201 crore, more than
double year-on-year, on a revenue of
0 1,30,566 crore. Retail now accounts
for around 21 per cent of Reliance’s
total revenue. Ambani wants half
of the group’s revenues to be made