Amazon and Walmart Don't Have the Edge on This Massive Opportunity

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="It is no secret that Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) are looking to profit from the massive Indian retail market by tapping into offline channels. While Amazon has been busy making forays into far-flung villages by enlisting local shops to act as its points of sale, Walmart has been leveraging its existing retail locations to reach out to mom-and-pop stores.” data-reactid=”11″>It is no secret that Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) are looking to profit from the massive Indian retail market by tapping into offline channels. While Amazon has been busy making forays into far-flung villages by enlisting local shops to act as its points of sale, Walmart has been leveraging its existing retail locations to reach out to mom-and-pop stores.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But the American giants now have a challenger in the form of Reliance, an Indian conglomerate led by Asia's richest man, Mukesh Ambani. Reliance had recently fired a salvo at Amazon and Walmart when it stopped supplying its lifestyle and fashion products to third parties including those two so that it could sell them on its own platform.” data-reactid=”12″>But the American giants now have a challenger in the form of Reliance, an Indian conglomerate led by Asia’s richest man, Mukesh Ambani. Reliance had recently fired a salvo at Amazon and Walmart when it stopped supplying its lifestyle and fashion products to third parties including those two so that it could sell them on its own platform.

Reliance now seems to be making another move that could clip Amazon’s and Walmart’s wings in India. It’s reportedly working to supply neighborhood grocery vendors.

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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Reliance’s latest move threatens Amazon’s and Walmart’s plans” data-reactid=”26″>Reliance’s latest move threatens Amazon’s and Walmart’s plans

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Indian business newspaper The Financial Express reports&nbsp;that Reliance has launched a pilot project to build a business-to-business (B2B) e-commerce platform for merchants selling fruits, vegetables, and groceries in local markets.” data-reactid=”27″>Indian business newspaper The Financial Express reports that Reliance has launched a pilot project to build a business-to-business (B2B) e-commerce platform for merchants selling fruits, vegetables, and groceries in local markets.

Sources cited by the newspaper say that Reliance has developed a mobile app — Jio Prime — that the merchants will need to sign up for. Once that’s done, the vendors will be able to order products using the app, which will also handle inventory management. The app will reportedly save merchants money, but the biggest reason why vendors would flock to Reliance is because of its ability to provide them with a huge database of potential customers.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Reliance's telecom arm — Jio — is the second-largest telecom provider in the country with a user base&nbsp;of almost 323 million. The Financial Express reports that the vendors signing up to use the Jio Prime app will get access to the telecom arm’s customer base so that they can directly inform potential customers of offers and products on sale.” data-reactid=”29″>Reliance’s telecom arm — Jio — is the second-largest telecom provider in the country with a user base of almost 323 million. The Financial Express reports that the vendors signing up to use the Jio Prime app will get access to the telecom arm’s customer base so that they can directly inform potential customers of offers and products on sale.

This will give Reliance an upper hand as compared to both Amazon and Walmart. Walmart has been trying to tap mom-and-pop stores with its Mera Kirana program.  (“Kirana” is a mom-and-pop store in the Indian parlance, and “mera” stands for mine.) Through this program, Walmart has been helping mom-and-pop stores streamline their operations and also provides them with inventories from its cash-and-carry stores. But given that Walmart has a limited footprint of its cash-and-carry stores in India — 26 to be precise — it will be difficult for it to match Reliance’s scale.

Reliance’s grocery arm — Reliance Fresh — has over 560 locations in the country, selling more than 300 tons of vegetables and 200 tons of fruit on a daily basis. So Reliance can easily use these locations to fulfill the needs of local vendors it is looking to recruit.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The second stage of this pilot could be a big deal for Reliance ” data-reactid=”32″>The second stage of this pilot could be a big deal for Reliance

Once Reliance successfully tests the B2B platform, it can move to the business-to-consumer (B2C) model. As Jio already has a huge subscriber base in India, it wouldn’t be very difficult for Reliance to launch a consumer-facing app that would allow users to order groceries and other items from their local merchants.

Reliance has a better shot at creating a truly offline-online hybrid model because of its existing scale in India. As a result, don’t be surprised to see the company eventually dominate the country’s grocery market, which is expected to cross a value of $700 billion by 2022.

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