How Jeff Bezos led Amazon and Walmart owned Flipkart lost out to Reliance Industries Ltd.

Amazon.com and Walmart Inc.’s plans to dominate India’s retail market have been ambushed by the constraints introduced by Indian Government in the form of new regulations for e-commerce players.

 

According to the new regulations , Jeff Bezos  led Amazon Inc. and Walmart owned Flipkart Online Services Pvt. Ltd.  Is debarred from owning inventory , and now they have to treat all the vendors equally  and have to put a control over the discounts and exclusives.

 

These new regulations have so far proved to be a huge advantage to Reliance Industries Ltd.  To flourish .

 

The stringent rules regarding the e-commerce operators have been aimed at providing protection to the small traders but it may end up benefitting the country’s richest man Mukesh Ambani , who is building a home grown competitor to Amazon and Flipkart , who together control 70 % of Online Shopping.

 

Sanchit Vir Gogia , CEO of Consultancy Greyhound Research  shares his views as , “ Whether serendipitous or not , India’s tightened regulatory regime for online retailers is a huge win for RELIANCE with its new retail ambitions.

 

Ambani Empire’s model to disrupt Indian Retail Market

 

From the advent of JIO IN 2016 to telecom , fiber to home broadband , media and entertainment to retail , Reliance Industries wish to cover every nook and corner of India market.

 

Reliance Industries , plans to create a “hybrid model , online to –offline new commerce platform “ and company wants to be partnered with India’s 12 million mom and pop  shops to create distribution and delivery centres.

 

Analysts at UBS predicts that ,” Reliance can gain market share in new-age retail given its starting point of 280 million telecom subscribers , a broadband offering, extensive content and a web of 10,000 physical stores nationwide.”

 

Setbacks to U.S. retail giants ; Amazon and Flipkart
  1. Both have to cut –back on cash back payments and discounts .
  2. Flipkart is estimated to rise its losses from 20 %to 25 % , after the changes so introduced.
  3. Walmart also had to suffer from the loss of the know-how and regulatory connections of the co –founders of Flipkart , who left after the new purchase.

 

 

Reliance will grab this golden opportunity with both the hands and will make a “ grand entry” into E- Commerce evolving into  a local version of Alibaba Group Holding Ltd.!!

 


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