According to a report in the Economic Times, Walmart-owned Flipkart and Amazon may soon face intense competition from Mukesh Ambani’s Reliance Retail, which has just ventured into online sales of smartphones, televisions, refrigerators and air-conditioners, two senior industry executives said.
Reliance Retail, which is the country’s largest brick-and-mortar retail chain, has launched an online shop front for its smartphone and electronics format Reliance Digital, which is also the country’s largest electronics retailer. These categories are the largest pie of Indian ecommerce accounting for almost 55-60% of the business of Amazon and Flipkart. Reliance will be gearing up to take a sizeable share of online sales of smartphones, televisions and electronics for the upcoming festive season with price-competitive deals and offers matching that of these two top online marketplaces.
An industry executive said Reliance will run heavy discounting from time to time on some products like exclusive models and old models like other online marketplaces, while other products will be priced at par with the Reliance Digital offline stores. “Nevertheless, Reliance Digital already has an aggressive pricing for its offline stores which are, at times, even the lowest in the market and top brands like LG, Samsung, Sony, Xiaomi and Panasonic now control most of the online discounts so pricing will be quite competitive with Amazon and Flipkart,” he said.
The company will also differentiate itself with its in-house service wing, ResQ, which does installation, demo and aftersales service for the products. The Reliance Digital and smaller Jio stores will act as fulfilment centres for the online orders. Reliance was piloting online sales of mobile phones and consumer electronics for employees for over a year. “The commercial operation has just been launched across India. While this is an omni-channel expansion of Reliance Digital, there will be dedicated focus on making the online operation successful,” another executive said. An email sent to Reliance Retail did not elicit any response till Sunday press time.
Online accounts for around 38% of India’s smartphone sales, while for televisions it is around 12% and 6-7% for appliances. For personal care gadgets like shavers and dryers, online is around 15-20% of total sales. Flipkart, Amazon, Paytm Mall, and Xiaomi’s Mi online store are the largest players in online sales of smartphones and electronics in India. Currently, Reliance runs ecommerce operations for the fashion formats — Ajio.com and Reliance Trends, and online grocery, FMCG, fruits and vegetables under Reliance Smart which is at present limited to Mumbai, Pune and Bengaluru. The company has plans to scale up Reliance Smart across the country.
Reliance Digital has 305 stores as of June, and 4,530 smaller Jio Points that also sell smartphones and do catalogue selling of appliances and televisions. Around 10% of the Reliance Digital sales last quarter were driven by catalogue sales through the Jio stores. Reliance Digital sales last fiscal crossed. Rs 15,100 crore accounting for around 34% of the retail business revenue.