Asia’s richest man, Mukesh D. Ambani, says he’s set to launch his own e-commerce platform in India to rival Amazon’s stronghold in the country.
According to him, Amazon and Walmart are struggling to win over the Indian market due to the cultural difference which has provided him with a golden opportunity to create a local e-commerce competitor to close the market gap.
Let us uncover how Ambani plans to reach his goal to uplift the online retail industry in India.
An Ambitious Goal
The Chairman of Reliance Industries, Mukesh D. Ambani, recently announced his ambition to launch a local e-commerce website to compete with Amazon and Walmart.
Named as Reliance Retail, the platform aims to gain the biggest share in the emerging retail market in India.
Ambani also shares he wants to create an online marketplace where the Kirana stores in India can sell their products across the country. The platform will help bridge the geographical restriction and make the merchants’ goods available to all Indian consumers.
While the development of the e-commerce website is still ongoing, the experts say Ambani’s goals has the potential to beat Amazon and Walmart. According to Morgan Stanley, India already has 500 million internet users (and counting).
So the demand for e-commerce services continues to grow by 30% every year. By 2027, the firm estimates India will yield a staggering $200 billion opportunity for the online retail industry.
Not only is Ambani taking advantage of this forecast, but he also has the right financial resources to realize his ambitions.
Thanks to his company unit named Reliance Jio, he can increase the number of Indian online users as they subsidized the cost of internet broadband in the country.
More and more Indian citizens, as well as Mumbai companies, are using Jio’s internet-on-the-go services.
The analysts even states Reliance Industries can get more favorable regulations compared to foreign firms should Narendra Modi gets re-elected as India’s Prime Minister.
Recently, the government imposed new e-commerce guidelines targeting foreign firms, particularly Amazon and Walmart, that impedes their goal to dominate the Indian market.
Not only it halts their progress, but these companies already invest billions of dollars for the Indian online retail industry.
For the past nine months, business experts have seen a significant shift in India’s business regulation guidelines.
The government is now coming up with new policies to protect and favor domestic companies, as well as localize their citizens’ data for security and privacy reasons.
While it makes sense for the lawmakers to protect their national interest and boost the employment rate in the country, many foreign companies are concerned about the new unfavorable laws.
The Regulation Risk
With these regulation changes, Morgan Stanley warns it may affect Amazon’s sales trajectory for the second half of 2019. Amazon has also become heavily reliant on the Indian market since they can’t penetrate China due to the ongoing trade war.