Reliance’s Ecommerce Venture To Be Fueled By $1.4 Bn West Bengal Investment

Mukesh Ambani owned Reliance Industries is planning to invest $1.4 Bn (INR 10K Cr) in the eastern state of West Bengal. While speaking at the Bengal Global Business Summit, Ambani said that a part of this investment will be used to fund the company’s ecommerce venture as well.

He further added that the ecommerce plan will be beneficial to consumers, retailers and producers and will also help about 3 Cr small shopkeepers across the country.

Reliance is aiming to connect small merchants with its retail network and warehouses in order to help them manage their inventory better. Ambani mentioned that over 500 retail stores are currently present in the state which sells various products ranging from clothes to groceries.

As of now, Reliance has about 3 Mn sq.ft of warehouses in Bengal and with the company’s new ecommerce plan, the space size will “increase manifold” in the next two years, he mentioned.

“West Bengal is poised to become the logistics hub of the east, with plans to attract investments of INR 5,000 Cr by 2020. This can create direct and indirect jobs for 50,000 people,” said Ambani.

The company is also looking to cover 100% of the state’s population with the Jio network within 2019.

Ambani had revealed that Reliance Retail and Reliance Jio Infocomm will jointly launch a new ecommerce platform last month while speaking at the Vibrant Gujarat Summit. 

Last year, Reliance Industries had announced its foray into the ecommerce space with a hybrid model. Under this plan, the company is aimed at creating shared profitability by integrating the offline stores of three crore small retail players via Reliance Jio, RIL’s online platform.

Reliance Retail is also planning to use over 5, 100 Jio point stores located across 5,000 cities and towns as delivery and collection points for its ecommerce venture. In order to reach the 95% of the Indian population, the company will be setting up ecommerce kiosks at Jio point stores to allow potential buyers to place orders online with the help of the store executives. This initiative is expected to begin in April 2019.

Reliance is looking to foray into the ecommerce segment at a time when the central government has implemented the new foreign direct guidelines in ecommerce from February 1, 2019, which has majorly affected the major ecommerce players such as Flipkart and Amazon.

Following implementation of the new ecommerce FDI guidelines, it was reported that US-based retail giant Walmart is looking to exit Flipkart while Amazon has removed all the product listings from its preferred sellers such as Cloudtail and Appario Retail in India.  

The new guidelines that are aimed at promoting the domestic players, will be beneficial for the companies which are looking to survive in the ecommerce sector using the hybrid online-offline model.