The Silicon Review ^Asia

Reliance Industries makes a move to enter into consumer service to compete with the likes of Alibaba and Amazon. The integrated energy company is in plans to introduce its online shopping platform by making use of its retail arm’s nearly 10,000 stores spread across 6,500 towns, neighbourhood retailers as well as its huge mobile phone network with around 28 crore subscribers. As per a report by brokerage firm, UBS, Reliance has the potential to lead the telecom and media market while also getting hold of a significant part of the Indian retail/e-commerce market. “Its success could be built on an ecosystem or bundling strategy, and a home-court advantage, similar to Alibaba’s success in chine, beyond explicit or implicit policy support”, UBS added.

Investors were surprised with the leading position that Reliance could reach within just a short span of two and a half years. Its edge in fixed broadband (FTTH) derives from low penetration, high capital intensity, a fibre roll-out lead, and content tie-ups. The report also showed that Reliance Industries has a wide footprint of physical stores despite competition from well-founded global companies in the retail/ e-commerce space.  Moreover, its omnichannel focus, subscriber reach and regulatios governing foreign e-commerce entities can all lead it to grab a 300 basis point market share in high-growth, modern retail.

UBS points out that the e-commerce penetration in India accounts for 2.3 percent of the 2018 retail sales as compared to the penetration of over 20 percent in China. Thus it can be said that India still needs to pick up its pace in e-commerce adoption in a place where mainstream adopters experience rapid growth by the adoption of online platforms.