India’s richest man and business tycoon Mukesh Ambani is in the planning stage of entering the e-commerce segment at a zero cash burnout proposal, where he will offer a blend of online and offline shopping experiences.
The Reliance Industry is planning to rope in local merchants in an Online-to-Offline setup. This scheme will boost the sales of the local merchant. This is a replica of the scheme adopted by the Chinese e-commerce giant Alibaba. The project will be headed by Reliance Industries Ltd’s (RIL) B2C units—Reliance Jio Infocomm Ltd and Reliance Retail Ltd.
Mukesh Ambani’s dream
Mukesh Ambani is eyeing on tapping the revenue potential of the consumer segment. He is aiming at generating 50% revenues of the group from the consumer businesses. Currently, oil and gas business is contributing to 80% of the group’s revenues.
A person closely watching the development said, “Demand is going to come from tier 2 and 3 and 4 towns and cities. Then you need to have the ability to deliver at these places. Over a period of time, the company can pass on the demand to the merchant, since the (local) merchant is closer to the consumer.”
“At present, the cost of delivery will be very high, making this unviable. So, you have to create local markets and be present everywhere, where you know the local merchants and local customers and Jio will have to connect them. That is going to help us in our e-commerce venture in a big way as each of them is a touch point to sign up merchants, and act as delivery points,” he added.
What is the Online-to-Offline setup?
Under this model, the consumer searches for products online but the purchasing happens through the offline channel. The plan will integrate all offline vendors with the e-commerce platform. This will boost consumer demand and also scale revenue options for the vendors as well.
With the emergence of online sites and e-commerce websites, it had become difficult for every offline vendor to scale his business. This model helps one and all is expected to be a win-win. It facilitates in increasing revenue options for offline businesses which have yet not witnessed the nuances of online selling.
