Reliance Retail to join the e-commerce fray soon

by CXOtoday News Desk    Oct 22, 2013

online retail

Reliance Retail plans to enter e-commerce in 2014, in order to compete with other leading players in the fast growing online retail market such as e-Bay and Amazon.

Reliance Retail, a unit of billionaire Mukesh Ambani-led Reliance Industries, operates over 1,500 stores, including hypermarkets, digital stores, jewellery outlets and apparel stores, in 136 cities across India, is already working on the project.

A source who did not wish to be named, informed ET that the company may adopt a marketplace model. In the marketplace model, e-commerce companies do not sell products directly, but offer their online platform to facilitate sale of products of other vendors. In return, the e-commerce company either gets a percentage of the sales or listing fee. Amazon for example uses the marketplace model, besides the hundreds of local e-commerce players in the country, like jabong.com, yebhi.com, snapdeal.com, flipkart.com – many of them using marketplace or a hybrid model to remain competitive.

According to analysts, the country’s Internet user base is expected to almost treble to 300 million by 2016 and will be dominated by online travel related and retailing services. experts believe that as against organized retail, which is restricted to metros and big cities and has a penetration of only 7-10%, the opportunity offered by e-commerce is huge as it allows companies to deliver most products anywhere in the country. In recent times, however, many organized retail players are seeking profitability in the online space. Future Group already has an online channel for its electronics retail chain ezone. Last month, Future Retail launched Big Bazaar Direct, an e-commerce-enabled direct selling business for its flagship hypermarket Big Bazaar.

Industry watchers are eager on how and with business model Reliance Retail venture in to the online space and how efficiently it can ride the e-commerce bandwagon.