Reliance Retail to Enter the E-commerce Market

The retail arm of Mukesh Ambani-led Reliance Industries is gearing up for its upcoming e-commerce venture. Reliance Retail will be launching its online shopping portal for fashion and lifestyle, grocery and business-to-business (B2B) verticals, by the end of this year.

Integration of services

The company’s telecom arm, Reliance Jio Infocomm will also be launching its 4G services, this year. Reliance Industries want to integrate the two services to offer a different experience to the customers.

“Reliance Retail this year will be embarking on its next phase of building a high-growth trajectory supported with e-commerce and larger geographic coverage,” Mukesh Ambani, Chairman of Reliance Industries said this while addressing shareholders at the company’s Annual General Meeting (AGM), held last week.

With its integration plans, Reliance Industries wants to offer anytime, anywhere and quick shopping to the customers. Reliance Jio will set up an advanced Internet infrastructure and the retailer will create a robust retail business. With the two, Reliance Industries will give a differentiated model of e-commerce to the country. Ambani also said that their model will smoothly integrate online and offline activities. The company will thus present a superior experience to the customers for services, delivery and payment.

E-commerce venture

Reliance Retail has already rolled out its grocery e-commerce initiative, reliancefreshdirect.com. The portal is in its pilot phase and has seen a huge success till now. The company expects it to bring in more success. Ambani mentioned that 2015 will see the advent of its e-commerce business in fashion and lifestyle. This will make fashion more accessible and trendy for the youth of the country.

Apart from fashion and grocery, Reliance Retail will be launching another e-commerce initiative relating to B2B sector. The company has seen a success in its physical B2B ventures. It will incorporate the same online. The company is launching Reliance Digital Market place. This is a platform that will help many small retailers like a strong supplier base, better supply chain productivity, product range, digital payment capability, credit capability and connectivity to customers.

Growth of Reliance Retail

In the Financial Year (FY) 2014 – 2015, Reliance Industries became the most profitable company, leaving behind State-owned Oil and Natural Gas Corporation (ONGC). It posted a consolidated net profit of around Rs. 23,500 crores.

In the previous year, Reliance Retail earned revenues around Rs. 17,000 crores. It also attained its highest profit of Rs. 784 crores. Although there are many challenges like the tough consumer environment, the retailer attained a compounded annual revenue growth of 31% in the last 5 years.Reliance Retail is looking to increase its presence of physical stores from 200 cities to 900 cities. Ambani said that they are expanding their retail business so that maximum people may benefit from organized retail. At present, Reliance Retail has 2,600 stores spread across 20 states and had employed around 50,000 people around the country.

Last year, Reliance Retail set up 930 new stores. On an average, this equals to adding five stores in 2 days. The company also created a fresh global benchmark by opening the maximum number of stores in a year.

Summary

Reliance Retail will give a stiff competition to e-commerce giants after it rolls out grocery, fashion, lifestyle and B2B portals.

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