Kirana stores to help Mukesh Ambani challenge Amazon’s clout

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As much as 90 per cent of India’s $700 billion retail market is unorganised, made up mostly of neighbourhood kirana stores selling groceries and other sundries.

India’s richest man is planning to create the world’s largest online-to-offline e-commerce platform in the country. Called New Commerce, Reliance’s new retail plan will link it’s high-speed digital platform to kirana stores that can be used by its customers to order supplies.

As much as 90 per cent of India’s $700 billion retail market is unorganised, made up mostly of neighbourhood kirana stores selling groceries and other sundries.

Ambani is racing to grab a share of an online shopping market that Morgan Stanley estimates will grow to be valued at $200 billion by 2028 from about $30 billion last year. India will have 829 million smartphone users by 2022, according to Cisco Systems Inc., from a projected half a billion this year. That means a potential surge in demand for online services and products from music to food delivery, electronic gadgets and clothes.

Ambani outlined his plan to shareholders in the shareholder’s meet on Monday. He has already spent about $36 billion on Jio, which has rolled out a nationwide 4G network and fiber broadband infrastructure, causing some established rivals to pull back.

The service will seek to get on board the millions of mom-and-pop stores that dominate the Indian retail market, providing heft to its operations. Chains and large department stores account for only 10 percent of the market.

The Reliance e-commerce platform would enable small merchants to “do everything that large enterprises and large e-commerce players are able to do,” Ambani said. The acquisitions will help bolster this network of partners. 

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