Reliance to claim lion’s share of India’s $150 bn e-commerce market: Bernstein

NEW DELHI : New Delhi: Reliance Retail is best positioned to lead in India’s $150 e-commerce market in the long-run, analysts at Bernstein said in a report dated 24 May.

“We believe Reliance Retail-Jio is the best positioned player in the largest and fastest growing e-commerce market. The advantages of its retail network, its mobile network, its digital ecosystem and its “home field advantage” in a famously complex regulatory and operating environment mean in the long term, it will likely claim the lion’s share of the over $150 billion e-commerce marketplace,” they said.

The report essentially gives Reliance an edge over incumbents such as Amazon and Flipkart in the long-run given the former’s extensive retail network, digital capabilities including its heft with Jio mobile services.

Currently, India’s e-commerce market is led by the big two—Flipkart and Amazon—that corner an estimated 60% market share. It is expected to reach $150 billion by 2025, with online penetration doubling in the next five years. Flipkart with $23 billion gross merchandise value or GMV and Amazon’s $18-20 billion gross merchandise value lead on scale with 60% market share. Reliance is currently number three with an estimated $5.7 billion in e-commerce sales driven by attractive categories of fashion (Ajio) and JioMart (e-grocery).

However, the report said that RIL is building the largest digital ecosystem in India.

Since 2015, RIL has built Reliance Retail into a 18,000 plus store nationwide chain with GMV of $30 billion, a dominant 4G network with 430 million subscribers in Reliance Jio, and a strong digital media platform encompassing OTT-IPL, music streaming, and news through strategic acquisitions.

“Reliance Industries is building the largest digital ecosystem in India. Jio has 430 million mobile subscribers. Its digital ecosystem is compelling. Its retail arm has 18,300 retail stores in India. Digital mix is scaling up 17-18%. It’s a disruptive playbook—integrate offline, online and prime makes it the strongest competitor to Amazon or Walmart,” the said.

This makes RIL the only Indian player to have an integrated offering and the ability to compete with global tech giants such as Amazon and Walmart, according to the report.

Reliance has also swept up several large retail assets including Metro Cash and Carry over the last two-to-three years and stitched partnerships with the likes of Meta. In 2020 Meta invested $5.7 billion in Jio Platforms Limited, part of Reliance Industries Limited.

“We expect Jio to become the core platform for India’s digital economy. As more consumers and small business move online, we see an expansion of India’s digital total addressable markets which we expect would reach trillion dollars by 2025,” it further added.

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