One deal at a time: How Mukesh Ambani is trying to take on Amazon in India

Company News

A $2.5 billion spending spree involving more than two dozen deals provides some insight into how Mukesh Ambani is piecing together a strategy to take on Amazon.com Inc. in India.
Asia’s richest man is sharpening his focus on e-commerce with a string of tiny acquisitions and stake purchases to face the world’s largest online retailer, after shaking up India’s telecommunications industry with cheap data and free calls.

The acquisitions represent a new strategy for Ambani’s Reliance Group, whose founder -- his father Dhirubhai Ambani -- built a petrochemicals business and the world’s largest oil-refining complex from scratch. It’s a clear pivot toward consumer offerings in a country that’s becoming a battleground for giants such as Amazon.com and Walmart Inc.’s Flipkart Online Services Pvt.

“The deals may be tiny, but it’s more likely that they are putting together a team of talented people by acquisitions, who can then be invested in to build out larger platform products,” said Kunal Agrawal, an analyst with Bloomberg Intelligence.

Ambani is racing to grab a share of an online shopping market that Morgan Stanley estimates will grow to be valued at $200 billion by 2028 from about $30 billion last year. India will have 829 million smartphone users by 2022, according to Cisco Systems Inc., from a projected half a billion this year. That means a potential surge in demand for online services and products from music to food delivery, electronic gadgets and clothes.

‘Shopping Experience’


 Ambani outlined his plan to shareholders in July, saying the effort will involve the group’s unlisted businesses Reliance Retail Ltd...Read More

Reliance vs Amazon: Can Bezos beat Ambani without getting bruised?

Companies News:

The battle for the Indian consumer was never going to be an all-American affair.
Walmart Inc.’s splashy acquisition last year of Flipkart Online Services Pvt., the homegrown e-tailer giving Amazon.com Inc. a solid run for its money, might have given the impression of a two-horse race. But as I argued (here and here), billionaire Mukesh Ambani wasn’t going to watch from the sidelines.

And last week India’s richest man jumped right into the fray. Ambani, chairman of the petrochemicals-to-telecom conglomerate Reliance Industries Ltd., has a four-legged plan to connect India’s 30 million small retailers with consumers. One, neighborhood marts will be connected to Reliance Retail Ltd.’s footprint of almost 10,000 stores, offering them common inventory-management, billing and tax platforms as well as low-cost payment terminals. That will give the expanded retail network formidable sourcing power.


 The second hook is Ambani’s telecom business. Consumer e-commerce in India is dominated by the urban middle class. Out of the country’s 500 million Internet users, almost 200 million live in rural areas where one out of four goes online less than once a month. No wonder the number of online consumers, while growing rapidly, is expected to be only about 120 million this year. Reliance Jio Infocomm Ltd. alone has 280 million digital subscribers...Read More