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Reliance Retail-Amazon tie up could disrupt marketing scenario in India

Reliance Retail-Amazon tie up could disrupt marketing scenario in India


– By Venkatesh Iyer

Bengaluru: The Murphy’s Law says that anything that can happen, will happen; its opposite, Yhphrum (the word ‘Murphy’ spelled in reverse!) is also true: If anything can work, it will work!

This aptly applies to Reliance Industries Ltd (RIL) Chairman Mukesh Ambani as well.

He has achieved so much and so fast during the last couple of months that, it seems, all those things were just waiting to happen during the COVID-19 induced lockdown period, globally!

Addressing his company’s first-ever virtual AGM last week, Ambani conveyed to the RIL shareholders that Jio Mart, their retail arm, an e-commerce venture with an investment  of over US$ 6.5 billion, is getting inquiries from investors and may start bringing some of them on board in the coming months.

After Facebook, Google and others, the latest co-passenger of the RIL is likely to be Amazon which has apparently evinced interest to buy a 9.9 per cent stake in Reliance Retail.

This year, RIL has secured investments worth over Rs.1,52,000 crore by selling nearly 33% stake to several companies like Facebook, Google, Silver Lake, and General Atlantic. Amazon could be the next investor in line.

So far, Amazon had invested more than US$ 100 million for a 3.58 per cent holding in the Biyani-led Future Retail under a long-term business agreement.  Future Retail sells some goods online on the Amazon India platform. There have been reports that Reliance Retail also plans to acquire Future Retail. If that happens, synergy in the Reliance-Amazon-Future combine may make it emerge as the largest retail company in the world.

During the last few years RIL has, through its various arms, established its businesses across verticals like mobile phones, electronics, fashion, jewels, footwear etc. This paves the way for a readily available range and market. Now under its umbrella, JioMart is also foraying into pharmaceuticals and healthcare.

Reliance Retail has a formidable network of 12,000 stores spanning the length and breadth of the country and two-thirds of them are in tier two, three, and four-cities and towns.

JioMart, set against the world’s biggest companies, Walmart Inc. Flipkart and Amazon, was launched in May 2020 in around 200 cities and towns and is gaining a lot of traction. It has started posing as the foremost competitor of established players. Initially, it commenced delivering groceries and electronics.

The growth model of Reliance Retail is based on its collaboration with small merchants and shopkeepers.

JioMart is also live on Facebook and Whatsapp with an existing base of over 400 million users, making it easier for its users to perform transactions between grocery stores and consumers. It will help boost operations of the platform.

To connect the dots, Facebook has also invested Rs 43,574 crore in the Jio platform.

Reliance has been integrating its value chain strategically as it provides them with economies of scale. Recently, the company merged its media and distribution network under one brand, Network 18. This integration gives them a broader reach across the country’s 27,000 local cable operator (LCO) partners acting as a touch-points to over 15 million households in India in addition to a million wire-line broadband subscribers across the country.


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