Reliance Industries to enlist local stores to fight Flipkart, Amazon

Mukesh Ambani, chairman of Reliance Industries group, today said that his company is working on creating a pan-India e-commerce platform that will help small, offline shops compete with players like Amazon and Flipkart.

The platform will work by making the inventory of small shops available for purchase online using a sophisticated web and app interface comparable to those offered by online retail giants.

At present, small, local shops often have zero online presence.

Even those that have their own websites lack the sophisticated software tools to list their items, manage and track orders, update stock data and support online payments.

Reliance Industries, which owns telecom operator Jio, is expected to provide all this in an easy-to-use package to help anyone with a phone to order anything online from shops in his vicinity.

If successful, the move could reduce fulfillment time for typical online purchases from days to hours, while helping offline stores remain relevant in the online shopping era.

“Reliance is working on creating the world’s largest online-to-offline New Commerce Platform,” Ambani revealed at the Make in Odisha Conclave 2018 today.

He promised to transform the lives and businesses of 3 crore merchants in the country.

“We will enable them to do everything that large enterprises and large ecommerce players are able to do,” he added.

The idea of e-enabling local shops is not new. Apps like Zopper and Purplista have tried to connect the shopper with local vendors, with mixed success.

The primary impediment to the strategy has been two-fold: keeping inventory data up-to-date and delivery.

All the apps require the local shopkeeper to ensure that items that are out of stock are shown as such, so as to avoid disappointing shoppers.

This requires the shopkeepers to enter inventory information — such as the number of size XL baby diapers they have — into a software so that it can be read by the e-commerce platform.

This also means that these numbers have to be updated after every sale — offline or online. While it is possible to automate the process for online transactions, accounting for offline transactions requires constant and, often expensive, manual intervention.

The second challenge has been delivery.

While online platforms like Amazon and Flipkart have their own departments and subsidiaries to take care of delivery, many of the local-shopping apps do not offer any kind of logistical support, putting the onus for delivery entirely on the individual shopkeeper.

While this is not a challenge for certain types of shops like restaurants, it may pose difficulties for others categories like garment outlets.

It is not clear whether Reliance, which owns India’s widest chain of retail shops, intends to help with the logistics part as well. As of September, the company had 9,146 retail outlets across more than 5,800 towns and cities in the country.