How Reliance Retail is changing the ecommerce space

A key announcement in Reliance Industries results which largely went unnoticed was its plans for the ecommerce business. In its presentation, the company has said: “The curated fashion and lifestyle e-commerce initiative is transitioning from project phase to operational phase through beta testing and has been launched on an invitation only basis.”  Sensex Astrology 

Reliance Retail, the country’s largest retailer, by revenue and number of stores wants to now leverage on the ecommerce space by building a differentiated ecommerce model. The e-commerce business being launched is currently conducting customer tests to obtain feedback on the website’s performance.When a major deep pocket player like Reliance enters the market, other players will naturally feel threatened. A shakeout in the sector with changes in business model is inevitable and has already begun.      Share Market Astrology

In a report on the e-tail sector, Kotak Securities says that the market is innovating in a bid to combat competition and forge a possible path to profitability. Flipkart is moving towards an Alibaba-type revenue model of charging nil commissions from sellers and instead earning revenues from advertising. All players are rapidly expanding their seller base in order to add more products to the bouquet of product range. New product categories (the likes of automobiles, real estate, and exam preparation) have also been launched.Alibaba, the Chinese e-tail giant does not charge commissions from its sellers but encourages them to advertise on its platform. Reports say that Flipkart which used to charge anywhere between 2.5-22.5% from the seller is evaluating to charge a maximum of 2.5 per cent or Rs 20, whichever is higher, as commission.   Nifty Trading Tips

Reliance Retail is believed to be launching with nearly 30,000 sellers that is nearly 15 per cent of the 2 lakh sellers in the country, says that Kotak report. Existing players are now trying to woo sellers into their marketplace. Among the various incentives that are being offered are provisions for working capital loans, easy cataloguing services and standardised shipping rates.

However, Kotak Securities says there is little scope to increase the number of sellers in the marketplace. Of the estimated 50 million small businesses in India, there are only 0.2 million unique sellers across the three platforms. This limits the size of the market. Kotak has compared Indian players with Alibaba and says that the latter has nine times more buying customers compared to Indian marketplaces but it has 43 times more sellers on its platforms, which partially explains its 49 times higher GMV (Gross Merchandise Volume).   Jackpot Stocks Trading Tips