Reliance Poised To Dominate India's Booming E-Commerce Sector, Says Bernstein

Alliance Bernstein LP, a U.S. asset management firm, predicts that Reliance Industries Ltd. (RIL) stands to dominate the Indian e-commerce sector, boosted by its retail, mobile network and digital ecosystem. Its familiarity with the complicated regulatory and operational conditions in India works to its advantage.

What Happened? As highlighted in a BQ Prime report, Bernstein anticipates the Indian e-commerce market to grow from $24 billion (₹1,98,570 crore) in 2018 to $133 billion (₹11,00,409.39 crore) by 2025, signifying a five-fold increase and an annual growth rate of approximately 30%.

According to Bernstein, Reliance’s innovative strategy involving a unified approach to consumers sets it apart. This approach combines an $18 billion (₹1,48,928 crore) gross merchandise value through Reliance Retail Ventures Ltd., a customer base of 355 million (₹2,937 crore) through Jio Platforms, and appealing prime apps like JioTV, MyJio, JioSaavn and Jio Prime.

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Reliance’s Jio, through its e-commerce venture JioMart and a collaboration with Facebook for a communications platform via WhatsApp Business, is projected to be a cornerstone of India’s digital economy. Moreover, Jio’s extensive content distribution through its apps strengthens its position in the digital economy.

Reliance also shows strength in the fashion segment, with Ajio and Reliance Trends holding a 20% market share, following a spike in online shoppers, especially for fashion.

Bernstein adds that foreign direct investment (FDI) regulations favouring Indian firms could aid Reliance. These regulations restrict non-Indian e-commerce companies from running a first-party model or owning more than a 25% equity stake in a seller. This allows Reliance to operate an inventory model, providing better inventory control, pricing, and customer experience, unlike Amazon and Walmart (Flipkart), which operate a marketplace model.

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