Reliance to take on Amazon and Flipkart online in India

Dean Blake

24th Jan 2019

Reliance Industries is establishing an e-commerce platform that will focus on smaller retailers and shopkeepers across India in an effort to offer a local alternative to international entrants Amazon India and Walmart-owned Flipkart.

Reliance chairman Mukesh Ambani noted the new platform would “empower and enrich our 1.2 million small retailers and shopkeepers in Gujarat,” before being extended nationwide.

The new platform will be at an advantage in the local market due to new rules restricting foreign entities from supplying more than 25 per cent of goods available on its marketplace to merchants – a rule which will not impact the upcoming Reliance offer.

According to the Financial Times, Forrester Research analyst Satish Meena said Reliance’s ability to control the supply of goods supplied on its marketplace “will certainly benefit them”, though said it would be difficult to match the levels of customer satisfaction achieved by Amazon and Flipkart.

These legislative changes have been seen as an attempt by Prime Minister Narendra Modi to appease small retailers and shopkeepers, who have expressed concern over the impact such large foreign marketplaces could have on the industry’s health.

According to a PwC analysis seen by Reuters, the policy changes could lead to 1.1 million fewer jobs, as well as push the gross-merchandise value of goods sold online US$800 million short of expectations for the current fiscal year ending in March.