August 5, 2021

After telephony and the Internet, Indian billionaire Mukesh Ambani takes on e-commerce

Alibaba has been making Indians dream for a long time. In 2007, the Chinese e-commerce giant inspired the founders of Flipkart in Bangalore. Then, in 2018, the American Walmart seized the said Flipkart to counter Amazon which also claimed to become “The Alibaba of India”. And now Reliance Industries Limited (RIL), the industrial conglomerate of the richest man in the country, Mukesh Ambani, in turn decides to take up the bet, by launching a giant online trading platform.

Article reserved for our subscribers Read also Indian industrialist Reliance accelerates its transformation into high-tech

At the end of October, its board of directors announced that it would mobilize, before the end of the year, 24 billion dollars (21.5 billion euros) to set up a new holding company which will invest this sum in Reliance Jio Infocomm. , the digital branch of the group, whose flagship is, for the moment, the telephone operator Jio, launched in the fall of 2016.

When Mukesh Ambani starts a new business, he crushes his competitors, with the support of Narendra Modi’s government

The idea is twofold: to have both an actor purged of all debt by March 2020 (against 840 billion rupees, or 10.7 billion euros, currently) before landing in online commerce , and a specific financial vehicle to be floated on the stock market by 2024. This is the pattern adopted, in their time, Alibaba (1999), but also Alphabet (2015), the parent company of Google , to diversify.

Walmart and Amazon, which dominate the Indian market, have cause for concern. Because, when Mukesh Ambani starts a new activity, he crushes his competitors, with the support of Narendra Modi’s government. This is thanks to state aid distributed as part of the digital development program in India, Digital India, inaugurated in 2015.

This is what happened with Jio: three years ago, RIL offered the population initially free telephone services, and slashed prices in 4G mobile Internet. In record time, he invested $ 50 billion to capture 355 million subscribers (the official figure at the end of September), dethroning Bharti Airtel from its leadership position, forcing Vodafone India to move closer to Idea Cellular, and forcing, at the end of October, the two incumbent operators owned by the State, BSNL and MTNL, to merge through the injection of 8.9 billion euros of public money.

10,400 points of sale

Mr. Ambani, older brother of Anil Ambani, who heads another group called Reliance (the one associated with Dassault Aviation through the Rafale contract), initiated an unprecedented change in the family business, which had started in textiles and subsequently devoted itself to petrochemicals (€ 79.2 billion in sales over the 2018-2019 financial year, 194,000 employees).

You have 46.37% of this article to read. The rest is for subscribers only.