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Flipkart, Snapdeal Must Now Brace For Competition From Mukesh Ambani

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Sachin Bansal and Kunal Bahl may have to perk up as Mukesh Ambani, the country's richest man, has formally announced his entry into India's burgeoning e-commerce sector.

Ambani has announced that the Reliance Industries will launch its e-commerce portal for electronics and fashion goods by the end of this year.

While announcing its earnings for July-September 2015 the company said in a press release, “Reliance Retail 2.0 initiatives encompassing fashion and lifestyle e-commerce, development of marketplace platform and building distribution ecosystem for Jio devices are on track and gearing up for rollout in a staged manner,” reported Quartz.

With Ambani's entry, the e-commerce sector in India, prominently led by young entrepreneurs, will start to look quite different from what it is now.

Flipkart, for instance, is headed by its 34-year-old co-founder and chief executive officer Sachin Bansal. Snapdeal is led by Kunal Bahl, 32. Zomato co-founder Deepinder Goyal is 32 years old. Before he was fired, former Housing.com CEO Rahul Yadav was just 26 years old when he decided to give away all his Rs 200 cr worth shares to the firm's 2,251 employees.

Stepping into e-commerce was not a sudden decision. Last year, Mukesh Ambani’s Reliance Retail took tentative steps into the crowded sector without much fanfare. Reliance Retail’s Reliance Fresh Direct virtual store has started taking online orders for groceries, fresh produce and household items and offering the service in a few neighbourhoods in Mumbai city at the start.

A spokesperson for Reliance Retail had told Forbes, "The launch of reliancefreshdirect.com adds the ‘direct delivery channel to our network besides providing convenience and choice to our customers.”

Will RIL be able to match the game?

Arvind Singhal, chairman of consulting firm Technopak, told Quartz that RIL may bring in much more than the existing players. “Their e-commerce offering will include elements like entertainment, gaming, and financial services, so they are bringing a much larger value proposition on one platform," he said.

RIL has one more advantage. The company's telecom venture Reliance Jio is likely to be of great assistance to the company's online retailing plans through its mobile wallet, Jio Money and 4G telecom services.

The company plans to launch its e-commerce platforms with 150,000 vendors. That's large comparison to Flipkart which operates with only around 40,000 sellers on its platform and Snapdeal, with around 200,000 vendors.

Buckle up Flipkart, Snapdeal and Amazon.


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