India e-commerce market heating up
Reliance Retail to enter the e-commerce market
Reliance Retail plans to enter the Indian e-commerce market by offering deliveries of fresh fruit and vegetables in Mumbai by the end of 2014. "The business is poised to launch multi-channel shopping in the coming year. The potential of e-commerce, combined with the network of physical store locations will offer tremendous choice and convenience at a great value to the consumer," the company said in the annual report.
Grocery e-commerce
The grocery business, which will be run through a subsidiary, follows a successful pilot project at the Reliance Corporate Park office in Navi Mumbai. Over the past year or so, its 10,000 employees there have been buying home care, personal and pharmaceutical products along with food through the Reliance Fresh-Project Direct website. Indeed, fresh food product ranges will be unique points of sale for Reliance. As for the grocery segment, only smaller firms such as localbanya.com and bigbasket.com currently deliver fresh products to consumers in some cities.
Flipkart, Amazon, Snapdeal and Walmart as competitors
Investment into e-commerce is a necessary move, but it could be a challenge for Reliance as the company will be competing with players like Flipkart, Amazon, Snapdeal and Walmart. Flipkart, which recently acquired the country's biggest fashion portal Myntra, is likely to generate revenue of more than USD1 billion in 2014. Amazon, which entered India last June, has launched next-day delivery while it is looking for smaller acquisition targets. To gain shoppers’ loyalty, both retailers are also investing in smart phones. Amazon has launched the Amazon Fire Phone with the starting price of $200 while Flipkart plans to launch a budget smart phone for $45.
Apart from the retail market, Reliance will also find an online competitor in the wholesale market in which it has been massively investing, with ambitious plans to open up to 100 cash & carry stores in the next two years. Indeed, Walmart India launched its online B2B platform at the beginning of July 2014, offering the service in Hyderabad and Lucknow.
Source: RetailAnalysis
