Reliance Industries chairman Mukesh Ambani in a speech at the Economic Times Awards for Corporate Excellence recently, said when the fashion was to invest abroad, Reliance took a contrarian bet to invest Rs 3.5 lakh crore in India and that has paid off handsomely.
Ambani was talking of his telecom venture, Reliance Jio, that disrupted the sector with freebies and a flood of cheap data.
After the smashing entry of Reliance Jio, Ambani is making another contrarian bet. When retail companies are logging into India, Ambani is betting big on Bharat. Amazon and Flipkart may be putting billions of dollars in e-commerce wars, Ambani plans to ride high on the corner shops—the small kirana stores.
For the retail biggies, the mom-and-pop stores could be dying but for Ambani they are an ambitious business opportunity. For his retail foray, Ambani is neither spending money nor dirtying his hands with delivery issues. All he plans to do is link manufacturers and kirana stores to his Reliance Jio customers and mint money.
Reliance Jio will offer its subscribers digital coupons to buy goods at Kirana stores at discounted rates. It will not spend its own money on discounts. It will only mediate between manufacturers and kirana stores to benefit its subscribers. While manufacturing brands will get free publicity, kirana stores will have more customers. And it will be an effective way to add and retain subscribers for Jio. The company is running a pilot project of this scheme in Mumbai, Chennai and Ahmedabad before it rolls out the scheme next year.
Small kirana stores are seen as a threat by e-commerce companies, but Ambani views them as an opportunity. In an age when the digital and brick-and-mortar are mostly seen as two opposing models, Ambani seeks to combine them in an innovative way using technology, e-cash, coupons and telecom userbase.