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Wednesday, July 18, 2018

Reliance Retail to be biggest threat to Amazon, Flipkart due to wider reach of Jio, says former Infosys director

T V Mohandas Pai said Reliance had more physical stores, better distribution and more money to invest in India than Amazon and Flipkart

By: PTI | Hyderabad | Published: October 16, 2017 5:51:08 pm
Reliance Jio, Jio user base, Reliance Jio user base, Reliance Jio one year, JioPhone, Jio Phone delivery, Jio Phone delivery date, How to buy Jio Phone Mohandas Pai said with Jio, Reliance can easily connect to all the small retail stores. File Photo

Reliance Retail will pose the biggest challenge to top e-commerce players Amazon and Flipkart next year due to its wider reach and tremendous penetration of its telecom arm Jio, said Infosys’ former Chief Financial Officer (CFO) T V Mohandas Pai.

Pai said consolidation would be the name of the game in the e-commerce space next year, with small firms shutting shop, leaving fewer players in an environment of intense competition. “In e-commerce, the biggest threat to Amazon and Flipkart will be Reliance Retail because Reliance Jio is there all over India; they can easily connect to all the small retail stores and supply to them and improve their business dramatically,” he said.

Explaining his stand, Pai said Reliance had a wider reach, more physical stores, better distribution and more money to invest in India than Amazon and Flipkart.

V Balakrishnan, another former CFO of the Bengaluru-headquartered IT major, said telecom companies were in a sweet spot because they were becoming like utility play, but added that “they have to own the data”. “Data and content become very important because telcos per se will become utilities. Reliance is making the right moves to own the data and own the content. That will give them a strategic advantage in the market,” Balakrishnan said.

Speaking of the dismal start-up scene in India, Pai said funding had become discerning, except for large companies to which big firms were pouring in money. “There is keener competition for funding; investors are more cautious. But the investment is going on and start-ups are coming up,” he said.

Pai said 2018 would be a better year for start-ups as the country’s economic growth would improve. “Next calendar year, start-ups will heat up again and they are going to raise the next round of financing next year. What is in vogue is artificial intelligence, machine-learning, agri-tech and med-tech (life science and medical technologies),” he said.

However, from Balakrishnan’s point of view, funding has become very selective in the start-up scene. “Earlier, all kinds of start-ups were funded. Now, unless you have a strong business idea, the funding environment has become challenging,” he said.

“The start-up environment is good. Last year, some $8 billion funding in start-ups was received. B2B (business-to-business) companies are the flavour of the market now. And a lot of funds have raised money. Big boys (like Amazon, Flipkart and PayTM) will attract more capital. Smaller companies will struggle,” he said.

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