Amazon faces competition from Indian tycoon

Thursday, January 2, 2020 - 12:04 by Sarah Collinson

BBC News reports that efforts to introduce a new site offering safe shopping online to consumers in India are picking up pace as business mogul and billionaire Mukesh Ambani looks to get his foot in the door of this lucrative marketplace.

Ambani is well known for being Asia’s richest man, so he certainly has the resources at his disposal. The owner of the Reliance Industries group seems set to take a good stab at edging Amazon out of the market in his native land, as well as mounting an assault against it in other regions.

In the short term, the service will focus solely on the delivery of groceries ordered via safe shopping online. The fact that delivery will be free of charge in the basic version of the JioMart shopping experience suggests that it could be seriously appealing for shoppers in the areas covered.

Express delivery will be charged at a premium, but with 50,000 products set to be available via this service, it will not require any other compromises from customers.

Another feature of the service is that it takes a somewhat decentralised approach to distribution, essentially allowing its app to provide a platform to local stores from which products can be ordered. This will rule out the need for the creation of major distribution centres and will instead piggyback on existing infrastructure.

India is a vast country with a large population, but only 0.15 per cent of people actually shop online at the moment. This generates less than £800 million annually; by comparison, more than this amount is spent in just 24 hours on Black Friday in the UK.

Amazon may have a well-established brand and user base elsewhere in the world, but companies such as Mr Ambani’s have a better chance of winning over shoppers in India where they know the market better.