MUMBAI: The $200 billion (roughly Rs. 13,00,300 crores) e-commerce market Morgan Stanley is forecasting for India by 2027 just got a new contender – with a very different plan.
But India’s richest man may not create a marketplace of his own. According to an Economic Times report, Ambani’s Reliance Industries Ltd. wants to leverage its Jio wireless service and hand out digital coupons, which customers can then use to get discounts at their neighborhood stores.
Why is this a smart move? There are clues in Morgan Stanley’s research. India has 432 million Internet users, but only 60 million online shoppers. The e-commerce industry, including online food delivery, is just $15 billion (roughly Rs. 97,517 crores) a year, or 40 percent less than Alibaba Group Holding Ltd.’s Singles’ Day sales in China.
The inflection point in a 10-year journey from $15 billion to $200 billion will come after five years because that’s how long it takes for new Internet users to get comfortable shopping in cyberspace. Most Indians who have Internet-ready phones have only bought them over the last couple of years, thanks to a 36 percent decline in the cheapest 4G handset in the past 15 months. In other words, they’re experiencing the web for the first time.
The payday Amazon and its homegrown rival, Flipkart, are waiting for will come after new users’ buying habits change. But Ambani, who has already acquired 133 million customers for his Jio service in its first year of operation, and is aiming to lure hundreds of millions more by effectively giving away custom-built Jio Phone handsets, is in a hurry. He may want to speed up e-commerce by joining hands with bricks-and-mortar.