The battle lines appear to be drawn, firm and proper. India’s largest private sector conglomerate, the Reliance Group will take on the ecommerce front runners Amazon and Flipkart, both owned/run by US giants. The development itself is not new, but what has prompted this report is the news that Reliance has started pulling out of these ecommerce platforms and others like Myntra and Jabong, the products it was selling as a registered seller.
These products comprise some of Reliance’s own brands plus a number of international brands for which the company or one of its arms holds exclusive marketing rights for the Indian market. These brands include Diesel, Kate Spade, Steve Madden, Burberry, Canali, Emporio Armani, Furla, Jimmy Choo and Marks & Spencer. It is reported that Reliance’s entity that is registered as a seller on all these online platforms has stopped accepting fresh orders for these products. If any of these brands are being sold on any other third-party marketplace, they will be pulled out from there as well.
The online retail venture of Reliance Retail is expected to be launched soon and these moves are seen as a precursor to that event. The platform will see the whole range of products that the company is already engaged in selling through offline stores, from grocery, fashion to electronics and footwear.
The Reliance Group, led by Mukesh Ambani has been building up the blocks for this eventual rivalry in the virtual marketplace. The chairman had made the e-tail venture announcement last July.
There are a couple of things favouring the Indian giant in their quest to take on Amazon and Walmart-owned Flipkart. One is they have developed a market in the offline space for most of the product categories and it would be an easy process to go online with these. To help them achieve this, they have their Reliance Jio digital arm which has been primed for this separately.
The other factor is that the FDI regulations that have put spokes in the wheels of Amazon and Flipkart won’t apply to Reliance, since it is a fully Indian-owned venture. The company is known for its aggressive and disruptive strategies as was witnessed in the case of the mobile phone service Reliance Jio.