Would Reliance enter e-commerce in India?

June 7, 2012
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We at Sunstone are excited with the collaborative solution model and are looking forward to working with you to drive it. Please visit our last post to understand our WoW (Wisdom of Web) model.

As promised in the last post, here is the business strategy problem we shall be solving using the crowdsourcing model:

Would Reliance Industries enter e-commerce space in India?

Context of the Question:

Many of you might be wondering about the relevance of this question and if this question can even be answered by people outside Reliance. Indian e-commerce is the hottest space posing a lot of interesting questions, so why did we decide to work on this specific question. To start with, let us understand the background of this question.

At Sunstone Business School, we start the program with a business plan creation around a specific space and had chosen e-commerce for our recent batch. Students prepared their business plans and built ideas ranging from niche categories to capital efficient e-commerce businesses and defended their competitive advantage and go-to-market strategy with rigour. However, in one of the presentations, there was a question posed to students – what if Reliance decides to enter e-commerce space? In the ensuing discussion, it emerged that if a large conglomerate such as Reliance, which aspires to be a large retail, enters e-commerce space, it will drastically change e-commerce landscape in future.

Hence, this question seemed important enough to analyze and worth our mindshare.

Interpreting the question

It is important to appreciate the true spirit of this question so we can answer it completely. This question can be interpreted as:

  • Firstly, Reliance is just a placeholder in this question- it can be replaced by Tata, Birla, Bharti or any other conglomerate that has some presence in Indian retail.
  • This question also requires us to understand the change in e-commerce landscape if Reliance or other conglomerates enter Indian e-commerce
  • We are discussing online retailing (e-tailing) here, that excludes online travel, insurance etc.

Next steps

Team of Sunstone students will try to build a framework to answer this question, and they will be supported by you as well as some industry experts. They will start posting from tomorrow. You can follow it at Wisdom of Web project area.

 

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Dinesh Singh

Dinesh Singh

Dinesh spent significant time as a consultant with McKinsey & Co as well as various technology start-ups. While at McKinsey, he worked with Fortune 500 companies as a strategy consultant. Before that, Dinesh was an entrepreneur and also led the market facing activities for a technology start-up. He is currently part of Sunstone curriculum team and contributes to strategy and entrepreneurship modules. Dinesh is a graduate from IIT Kanpur and MBA from Cornell University.

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Comments

  1. [...] Now that we have the approach laid out, next step would be introducing the problem. For this, visit the next post in this series here. [...]

  2. brijesh says:

    Reliance current focus is not e-commerce. It's primarily a space for startups currently not for large companies like Reliance. However, they are starting in retail so they might think about it in few years.

  3. I think an earlier article on the basis of decisions by companies while evaluating a new product or new market answers this to large extent. Idea is whether it really moves the needle or not. The Indian ecommerce market is valued at 50,000 crores. 80% of that is attributed to travel market so etailing, value services, new markets make the rest. Now with existing players in there it's certainly not going to be few players' market. Market is certainly there and increasing so that may interest Reliance but I think offline retail is a bigger market and that is where RIL would focus rather than small pie of online market. 
     

    1. Dinesh Singh Dinesh Singh says:

      Manoj- You listed many interesting facts and thoughts. That's a reasonable hypothesis to start with but we need to build it slowly and evaluate each aspect. That's what we will try to do in next few posts. Check WoW project area and put your thoughts there as well. 

  4. harjotnarula says:

    A couple of days back Reliance announced that it aims to clock Rs 50,000 crore revenue in 3-4 years from the present Rs 7,600 crore. To get this 6-7 times growth in 3-4 years Reliance will definately need to look at all the options to see and e-commerce is probably the most promising of the options. With e-commerce retailers growing at a rapid speed and aiming to take a larger market share with every passing month, Reliance can not ignore this space and will have to start e-commerce operations sooner rather than later.

    1. Dinesh Singh Dinesh Singh says:

      Interesting thought Harjot. Let's build on it in next posts at http://sbr.sunstone.in/wow-project-post/

  5. Croma (a tata enterprise) recently launched their online store, though very quietly. I am keen to see what the teams come up with, I think ecommerce in India does need such big players.

  6. Introducing Wisdom of Web (WoW) to solve strategy problems | Secret To Get Cheap Wow Gold says:

    [...] Now that we have the approach laid out, next step would be introducing the problem. for this, visit the next post in this series here. [...]

  7. Avneetkapoor says:

    If we see the historical adventures of Reliance or may be any other conglomerate, Tata, Birla, I can safely say that. Reliance will foray into this domain. Rs, 50000 crore market is attractive enough.  Though  reliance will not be a first mover, but it has the muscle to take over. It already has a basic infrastructure. It has wel established offline retail in form of Reliance Fresh,   Reliance Super, Footprints,   Trends etc.   Putting up an online interface will not be a big issue for them.