Don’t you love it when the world’s richest lock horns? Whenever they compete in business, consumers end up reaping some benefits. But isn’t that one of the advantages of competition?
This time around, the richest man in Asia has plans in the works that may give the world’s more powerful business tycoons some sleepless nights.
Mukesh Ambani is this close to launching Reliance Retail, an e-commerce platform that hopes to compete favorably with both Amazon and Flipkart in India.
Ambani chairs Reliance Industries, one of the heavyweight companies in India. Its retail presence is continually growing across the country, a market well known for its kiranas and bodegas.
Alibaba is the benchmark
The businessman’s overall objective is to create an Alibaba-like marketplace allowing offline merchants, including Kirana stores, to sell their merchandise online to the Indian market.
There’s still some work to do before they can decide on their final marketplace, but whatever they decide on is sure to be an instant hit.
According to Morgan Stanley, the country’s online retail space is set to be a $200 billion opportunity in the near future, possibly by 2027. With e-commerce showing annual growth of 30% propelled by 500 million online consumers, the bank’s estimates cannot be that far off.
As if in anticipation of the launching of the online platform, Reliance Industries has had quite the hand in getting more Indians online. The company has a broadband unit dubbed Reliance Jio which has significantly subsidized internet broadband costs.
Speaking to CNBC, Dinesh Moorjani (Comcast Ventures) said that a few years ago, Reliance Jio introduced Indians to cheap mobile broadband, creating an environment of near-internet addiction. We all know a thing or two about that, don’t we?
In Mumbai, Jio is everywhere from the corporate world to the rickshaw drivers on the street. Analysts also anticipate that the re-election of the current PM Narendra Modi will work in favor of Reliance, setting it up for greater things ahead. We all know that handled correctly, politics of the day can create an enabling business environment.
Earlier in the year, the country’s government released new guidelines that complicated the expansion of foreign e-commerce players into India.
Walmart and Amazon were the hardest hit by these guidelines, but they luckily don’t affect local players. With this being the current situation, Mukesh Ambani’s Reliance Retail may become an instant hit in the Indian market.
The US companies have, over time, tried to make the most of the Indian market, with Walmart acquiring Flipkart last year for $16 billion.
As for Amazon, India is the country with which the company has the most job openings, without considering the United States.
The move by India’s government to issue guidelines leaning towards local companies hasn’t been well received, naturally. Moorjani cites the protectionist policies as one of the unique challenges of conducting business in the country.
It comes as a big blow to companies who had identified India as the go-to-market, especially after expansion into China has proved elusive time and again.