June 2019 \ Business & Investment \ BUSINESS AND GOVERNANCE
Reliance Retail set to disrupt Amazon, Walmart-Flipkart: Report

Reliance Retail’s upcoming entry into the online retail sector ...

Reliance Retail’s upcoming entry into the online retail sector is the biggest challenge for Amazon and Walmart-Flipkart as the Mukesh Ambani-led behemoth is well positioned to create massive disruption in the market, a new report has stressed. According to the global market research firm Forrester, the online retail sales in India will grow at a five-year CAGR of 25.8 per cent to reach $85 billion by 2023, despite the hiccups of demonetization in 2016, GST in 2017 and the governmental changes in e-commerce policy announced last December.

The time is ripe for Reliance Retail, which operates 10,415 stores in more than 6,600 cities, with 500 million annual footfalls—giving the company the kind of scale required to swiftly launch India-based operations. “One of the things that will trouble Amazon and Flipkart is Reliance’s history of launching operations via massive discounts,” Satish Meena, senior forecast analyst at Forrester Research, said in May. Reliance entered the telecom sector in 2003 with the Monsoon Hungama tariff plan, which brought tariffs for voice calls down to just Rs 0.40 a minute from the existing rate of Rs 2 a minute, followed by the launch of Jio 4G plan in 2016 that dropped data rates from Rs 250 per GB to Rs 50 per GB.

“This kind of discounting can disrupt any market, and we expect something similar to happen in the grocery space during Reliance’s launch,” Mr Meena added. Reliance is fast working on creating the world’s largest online-to-offline New Commerce Platform, according to Mukesh Ambani, CMD, Reliance Industries.




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