India’s richest man, Mukesh Ambani, has officially proclaimed his entry into the country’s expanding e-commerce sector.
Mukesh Ambani has stated that Reliance Industries will launch their e-commerce portal – specializing in electronics and fashion – by end of 2015.
The company announced in a press release announcing its earnings that, “Reliance retail 2.0 initiatives encompassing fashion and lifestyle e-commerce, development of marketplace platform and building distribution ecosystem for Jio devices are on track and gearing up for rollout in a staged manner.”
One of India’s leading e-commerce companies is Flipkart, headed by 34 year-old co-founder and Chief Executive Officer Sachin Bansal. Another notable e-commerce company is Snapdeal which is led by Kunal Bahl who is 32. So far the e-commerce sector in India is largely spearheaded by young entrepreneurs who are mostly first-generation businessmen.
On the other hand, Reliance Industries was founded in 1966 by Ambani’s father and is involved in everything from petrochemicals to oil and gas, and is one of India’s biggest private sector conglomerates.
Mukesh Ambani’s decision to enter the world of e-commerce was not a rash decision. Last year Reliance Retail took preliminary steps into e-commerce without much flourish. Reliance Fresh Direct virtual store started taking orders in a few neighbourhoods in Mumbai for a start. They took orders for fresh produce, groceries and household items.
“The launch of reliancefreshdirect.com adds the direct delivery channel to our network besides providing convenience and choice to our customers,” a spokesperson for Reliance told Forbes.
Arvind Singhal, chairman of consulting firm Technopak said, “What RIL is bringing to the table is fundamentally much bigger than what any of the existing players offer. Their e-commerce offering will include elements like entertainment, gaming and financial services, so they are bringing a much larger value proposition on one platform.”
There is another advantage for RIL. Reliance Jio, the company’s telecom operation is probably going to be of great value to the company’s online retail project through its mobile wallet Jio Money and 4G telecom services.
Singhal of Technopak also said, “RIL will not have any disadvantage of entering the market later than some others because the company has such high brand recall that customers will be drawn to it. They are a formidable competitor that all of the existing players must watch out for.”
Flipkart runs with approximately forty thousand sellers on its platform and Snapdeal with about two hundred thousand vendors. RIL intends to start its e-commerce platforms with one hundred and fifty thousand vendors, definitely making them a serious contender in the e-commerce sector.
Watch out Flipkart and Snapdeal.