Mukesh Ambani vs Jeff Bezos set to begin from Gujarat
Reliance e-commerce will be first rolled out to 1.2 million retailers in Gujarat, as part of a nationwide plan that poses a challenge to Flipkart, Amazon and Paytm Mall.
Gandhinagar/Mumbai: India’s richest man Mukesh Ambani on Friday said his company Reliance Industries Ltd (RIL) will roll out its e-commerce platform to as many as 1.2 million retailers and store owners in Gujarat, as part of a massive nationwide plan that analysts said could pose a challenge to Walmart Inc.-controlled Flipkart, Amazon.com Inc., and Alibaba Group Holding Ltd-funded Paytm Mall.
“Reliance Jio and Reliance Retail will launch a unique new commerce platform to empower and enrich our 12 lakh small retailers and shopkeepers in Gujarat, which are part of the over 3 crore community in India,” Ambani said at the inaugural function of the Vibrant Gujarat Global summit in Gandhinagar.
Gujarat will kick off the pan-India Reliance e-commerce plans, Ambani said.
Ambani’s statement comes days after the government updated its regulations on foreign direct investment (FDI) in e-commerce, two of which have the potential to change the e-commerce play in India. First, FDI-funded online marketplaces can only act as technology platforms that connect independent sellers and buyers. They cannot sell, own or control inventory. Second, and more importantly, the guidelines that come into effect on 1 February prohibit such e-commerce platforms from entering into exclusive merchandise deals.
Reliance Industries, India’s largest company by market capitalization, wants to adopt an innovative online-to-offline (O2O) model, where a consumer is drawn into making online searches for purchases that are made in a physical store. RIL’s plan is to consolidate merchants under an e-commerce platform. These merchants, in turn, will cater to the demand from untapped markets. This will help the company save on costs by avoiding the discounting game and penetrate areas currently outside the traditional purview of e-commerce companies.
The Reliance e-commerce plan outlined by Ambani means foreign online retail companies could find themselves in a spot. Ambani also spoke out against data colonialization, which is also being deliberated upon by the government.
“In this new world, data is the new oil. Data is the new wealth. India’s data must be controlled and owned by Indian people and not by corporates, especially global corporations,” Ambani said. “For India to succeed in this data-driven revolution, we will have to migrate the control and ownership of Indian data back to India, in other words, Indian wealth back to every Indian,” he said.
The Reserve Bank of India (RBI) last year introduced data localization norms for foreign fintech companies, making it mandatory for them to store Indian data locally. An expert panel’s recommendations sought to limit processing of personal data only for clear, specific and lawful purposes.
The committee’s report, however, said personal data could be processed by the government if this was thought to be necessary for any function of Parliament or a state legislature. The committee also did recommend giving “data principals”, persons whose personal data is being processed, the right to be forgotten.
The matter has led to intense lobbying. While Indian companies want data stored locally, foreign firms such as Google and Facebook are against this.
“E-commerce is not about products. If you look at Amazon’s success, it is more about B2B than B2C. Using Reliance Jio, RIL has already created a super highway. Now they have to ride on this to create online e-commerce,” said Piyush Kumar Sinha, a retail expert and director of CRI Advisory and Research.
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