Financial services provider Morgan Stanley has estimated Reliance’s Retail business net asset value at $29 billion, a big chunk of which is credited to the expansion of the new JioMart, Reliance’s attempt at becoming the Amazon of India.
While Reliance has been in the retail game for a long time now, forming alliances in the industry, the company’s entry in e-commerce is expected to cause an unprecedented rise in the business. Morgan Stanley expects e-commerce, through JioMart, to account for 15% of Reliance Retail’s sales by 2023. MS puts total revenue projections at around $19Bn.
The push into retail, both offline and online, is a part of Reliance’s goal to become a technology led platform which will have a footprint in just about every sector in the country. To this end, Reliance Jio Platforms has also grouped a slew of high profile investors on its board, including Silicon Valley tech giants. Facebook invested $5.7 billion for a 9.99% stake in the company, and Google followed it up with a $4.5 billion in the company for a 7.7% stake. So far, the company has raised north of $20 billion in just 3 months.
These investments, while aimed aggressively towards expanding Jio’s digital businesses, will also go towards expansion of the JioMart ecommerce platform. And such has been the impact of these investments, that existing ecommerce players are now arranging for additional capital to fight Reliance. A recent example was exhibited when Walmart led a $1.2Bn round in its subsidiary Flipkart, as it looks to build cash reserves for the company to take on the behemoth that is Reliance.
During Reliance’s recently concluded Annual General Meeting, group Chairman Mukesh Ambani announced, that in addition to grocery, JioMart will also sell electronics, pharmaceuticals, healthcare, clothing and much more. JioMart charges no additional delivery fee from consumers and has no minimum order limit.
The platform is primarily aimed at including Kirana stores to help MSMEs in India. The company has already introduced a platform for Kirana owners where they can tie up with JioMart to list their inventories.