Walmart and Amazon are titans of tech—but they don’t know India like Mukesh Ambani

India’s richest man just can’t help being disruptive.

After ushering in a crackling internet data-usage boom in the country, Reliance Industries Limited (RIL) chief Mukesh Ambani plans to transform its already rising e-commerce industry, till now a bastion of the two American retailing rivals Amazon and Walmart.

On Jan. 18, Ambani said two of his group companies, Reliance Retail and Reliance Jio Info comm, will together launch a new e-commerce portal that will benefit nearly 1.2 million small retailers and shopkeepers in the western Indian state of Gujarat alone. Ambani was speaking at the state’s flagship annual event, the Vibrant Gujarat summit.

Given RIL’s history, most recently in the telecom space, experts believe Ambani is a rival that incumbents need to seriously watch out for.

“Reliance has had an Indian presence for many years and, therefore, understands the on-ground realities, especially of small- and mid-sized shopkeepers. Moreover, it is a company that knows how to launch businesses and scale them,” said Yugal Joshi, vice-president of Texas-based consultancy Everest Group.

However, the oil-to-telecom conglomerate will not be immune to the incumbents’ challenges. Besides, the group is “yet to prove its success outside of traditional business models of oil and telecom,” Joshi said.

Ambani’s e-commerce ambitions

While the Ambani-led group has not yet shared any further details on what its new e-commerce venture would look like, the business will definitely have a giant scale given Reliance Retail and Reliance Jio Infocomm’s current reach, and Ambani’s deep pockets.

Reliance Retail currently has nearly 10,000 stores in over 6,500 towns. And within less than three years of its launch, Jio already boasts of a subscriber base of 280 million users in India.

Reliance’s e-commerce venture’s “success could be built on an ecosystem or bundling strategy, and a home court advantage, similar to Alibaba’s success in China, beyond explicit or implicit policy support,” brokerage firm UBS said in a note on Jan. 24.

In addition, the untapped opportunity in the e-commerce segment is big considering the low internet penetration in India. While the country is home to the world’s second-largest internet user base, e-commerce is not as popular here as in the US or China. In fact, in 2018, e-commerce accounted for under 3% of India’s overall retail sales.

Besides the merits of its retail and telecom arms, Reliance is a far more popular brand name in India than its American rivals, making it a more likely candidate to attract first-time shoppers.