Amazon in India
Amazon.com Inc. has begun making forays into everything from grocery delivery and insurance to drugs in India.
The U.S. giant is fanning out at a pace not seen elsewhere in the world.
Amazon is now delivering prescription and over-the-counter medicines and herbal remedies in Bangalore. It started last month selling car and motorbike insurance -- a first for the Seattle-based online giant -- claiming to finalize policies in under two minutes without paperwork. It piloted a restaurant delivery service to Prime subscribers in parts of Bangalore last year. Amazon had also secured clearance for alcohol delivery in one Indian state, Reuters reported in June.
As Amazon builds its business at a rapid pace in India, it's now getting competition from Reliance Jio Platforms.
Reliance JIO Platforms
Reliance Industries Limited owns Reliance retail which currently owns 10415 stores across 6600 cities in India. Reliance Jio currently has 380 million subscriber base in India. The company has built a connection layer first by providing affordable data (internet) to consumer and even selling phones. It incentivised consumers to go online.
It now wants to use its retail stores as well as other offline merchants and kirana stores to sell goods to consumers. For this purpose Reliance has raised $15.2 billion in 2 months from some of the most coveted investors on the planet.
Acquisition of Netmeds
Reliance Industries on August 18, 2020 announced the acquisition of a 60 per cent stake in online pharmacy Netmeds' parent company Vitalic Health for Rs 620 crore valuing it at Rs 1,000 crore. The acquisition gives RIL’s retail unit Reliance Retail entry into a vertical e-commerce space, in addition to its online grocery platform JioMart.
India is yet to finalize regulations for online drug sales, or e-pharmacies, but the growth of several online sellers such as Medlife, Netmeds, Temasek-backed PharmEasy and Sequoia Capital-backed 1mg has threatened traditional drug stores. Their associations are threatening protests and legal action.
Why Future Group?
Future Retail operates some of India’s most popular retail chains and is in more than 400 cities in every state of the country through digital platforms and over 1500 stores that cover over 16 million square feet of retail space. It has large format stores Big Bazaar its flagship chain. It also has neighbourhood retail chains EasyDay Club and Heritage Fresh.
Future Group has enormous potential however it is now under severe financial strain. The total debt of Future Group is approx. 13000 crores and it needs 6000-8000crores to stay afloat.
Amazon however holds a minority stake in Future Group and may make Reliance takeover of Future Retail difficult.
The race to expand product profile as well as acquire strategically useful companies to gain a higher share of the consumers wallet has just begun in India. And it will be played between these 2 giants Amazon and Reliance Jio aggressively as they independently also take on other e-commerce players (do not forget Flipkart backed by Wallmart). Interesting times and discounts to consumers are perhaps here to stay!!
(Disclaimer : This blog is for information purposes and not to solicit any kind of business or offer any kind of advise)
