This offline-to-online venture will link producers, traders, small merchants, brands and consumers through technology.

Reliances new commerce venture likely to be launched around Diwali
Atom E-commerce Monday, August 26, 2019 - 17:24

The much-awaited online-offline (O2O) foray by Reliance Retail may have a soft launch around Diwali and a larger rollout by the end of the year, according to a Mint report. The model being suggested is that the customer identifies the product they want online and the local grocery store will arrange it to be delivered within the quickest possible time. Reliance calls this venture New Commerce. The attempt is to link the different stakeholders, producers, traders, small merchants, brands and consumers by deployment of technology.

The company has taken around two years to work on this concept and the conglomerate’s Chairman Mukesh Ambani had made a presentation at the company’s AGM that they would want to rope in around 30 million neighbourhood kirana stores in this scheme.

By current indications, the company may develop an app or e-commerce site and the delivery could then be made by the offline retail outlet which has signed up for the scheme. It is not clear if there is a model where the customer could collect the ordered goods which some online retail models follow, calling it ‘click & collect’.

The initial launch may cover products from daily staples, soaps, shampoos and other household items, or broadly FMCG or fast-moving consumer goods.

There are at least two cost-centres which the existing FDI-based ecommerce leaders in the country are burdened with, that Reliance’s New Commerce will escape from. One is the stocking of goods for delivery against orders. Amazon and Flipkart have spent millions of dollars in creating fulfilment centres across the country. The other major cost saving could result from the packing and delivery charges if the delivery is to be made thought the offline retailers located close to the customers. How much of that cost will be borne by the retailer and how much will be reimbursed by Reliance is also not clear yet. On the storage front Reliance does not have the restrictions Amazon and Flipkart have due to the FDI norms.

With this imminent rollout, the company’s ability to handle logistics and delivery will determine how much of a threat Reliance’s New Commerce becomes for the established giants Flipkart and Amazon.

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