Amazon India and Flipkart might soon face a new challenger with immense experience in the Indian market. Mukesh Ambani’s Reliance Retail has ventured into online sales of smartphones, televisions, refrigerators and air conditioners as it aims to challenge Walmart-backed Flipkart and Amazon, the leaders in online retail segment.
Reliance Retail, the country’s largest brick-and-mortar retail chain, has launched an online storefront for Reliance Digital, the store that sells smartphones and electronics. According to Economic Times, these categories account for largest pie of Indian ecommerce at almost 55 to 60 percent of the business. With online portal for Reliance Digital, Reliance Retail is preparing to fight head-on with its more established rivals. The company is aiming to take sizable share of online sales of smartphones, televisions and other electronics ahead of the festive season.
Reliance Digital is also planning to run heavy discounts from time to time on some of the products including exclusive models and older devices. Most of the products are expected to 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,” an industry executive told the newspaper.
Reliance Retail plans to differentiate itself from other online retailers with its in-house service wing called ResQ, which offers installation, demo and after sales service for the products. The company plans to use Reliance Digital and smaller Jio stores as fulfillment centers for the products sold online. Reliance has been piloting online sales of mobile phones and consumers electronics for employees for over a year.
In India, 38 percent of smartphone sales happen online while for televisions, the online sales stands at around 12 percent. In the case of appliances, online accounts for around 6 to 7 percent of sales while personal care gadgets like shavers and dryers account for 15 to 20 percent of online sales. Flipkart, Amazon, Paytm Mall and Xiaomi’s Mi Store are the largest players in this segment.
Reliance Digital has 305 stores as of June and 4,530 smaller Jio points that also sell smartphones. With these large footprint of network stores, Reliance Jio stands to benefit by not having to create a new fulfillment center. However, it is not clear whether it will be able to match the familiarity and online offers from Flipkart and Amazon India.