Mukesh Ambani’s New Commerce platform has the potential to tap millions more of Indian consumers.
The likes of Big Bazaar and Netflix could be in for some nasty surprises after Mukesh Ambani sets his new plan in motion.
At the 42nd AGM of Reliance Group today, the oil-to-retail-to-data czar revealed the contours of India’s coming kirana revolution that could in time recast the entire retail business in the country.
Ambani’s plan entails creating the world’s largest online-to-offline e-commerce platform in India. He told the AGM that the results of beta trials of this digital commerce venture — which seeks to integrate producers, sellers and consumers under one platform — have been promising.
To be called Reliance New Commerce, it aims to connect India’s kirana stores with Reliance’s high-speed digital platform, eventually tapping millions of consumers who are likely to order supplies and provisions through the platform.
With the objective of empowering India’s kirana stores digitally, the platform would enable small merchants to do everything that large companies can do, Ambani said.
Retail has become one of Reliance’s biggest bets of late as the company attempts to prune its dependence on traditional avenues like refining. Under his new-age retail blueprint, Ambani plans to bring the country’s small retailers — such as kirana stores — on to his digital platform which also connects suppliers with his Reliance Retail stores.
This plan has the potential to change the rules of retail business forever in India — a country where 90 per cent of retail businesses operate at the unorganised end, like your neighbourhood grocer who stores and sells you sundry daily-use items.
It also has the potential to unsettle Big Bazaar and others of its ilk that dominate the organised end of the Indian retail market. As the Indian consumer may increasingly become comfortable in ordering supplies from the comfort of her home, Ambani’s plan — one its gets fully going — could majorly hurt the country’s entrenched retail leaders.
For the same reasons, Amazon and Walmart — which now owns India’s homegrown ecommerce behemoth Flipkart — could also soon have plenty to be uneasy about, because the deals a customer gets via the deep-pocketed Jio could be relatively more attractive.
The second weapon in Ambani’s arsenal is content. As per last year’s data collated by Bloomberg, Jio subscribers were consuming a mammoth 3.4 billion hours of content (mostly videos) per month.
Jio could have the keys to a sizeable source of revenue if even a small part of this content is Ambani-owned, analysts say.
At the AGM today, Ambani unveiled Jio’s Forever Plans, which will give each subscriber an HD or 4K LED television for free, along with a 4K set-top box. This is part of a host of goodies available at a monthly charge of Rs 700 to Rs 10,000.
Besides, Jio Fiber comes bundled with subscriptions to most premium OTTs. Apart from this, a premium Jio subscriber, sitting in his living room, can also watch a movie as soon as it is released. Jio Fiber also features a wide range of other applications, from digital TV to cloud gaming.
All in all, it could soon transform into India’s most preferred mode of entertainment, posing a stiff challenge to Netflix and others like it, such as Amazon Prime.
Netflix is quickening the pace of its investment in India, but it will soon meet its match in the unmatched bundling acumen and pricing power of Mukesh Ambani.
Bad news for the likes of Netflix in a market that BCG says is likely to grow to $5 billion by 2023 from $500 million last year, where the number of paying subscribers could rise to as many as 50 million.