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Reliance Industries Can Gain Significant Share In Retail, E-Commerce: UBS

UBS said Reliance Industries can become a market leader in telecom and media, while gaining a significant share in retail/e-commerce.

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Reliance Industries Can Gain Significant Share In Retail, E-Commerce: UBS

Reliance Industries reported an 8.8% rise in its net profit for the October-December quarter


New Delhi: 

Highlights

  1. Reliance Industries can become market leader in telecom, media, says UBS
  2. US, China internet platforms don't own telecom networks, adds brokerage
  3. Reliance Jio, Reliance Retail plan to launch platform for small retailers

A week after Reliance Industries (RIL) reported an 8.8 per cent rise in its consolidated net profit for the December quarter, global financial services firm UBS on Thursday said the Reliance Industries has the true potential to evolve from an integrated energy company into a consumer giant like Amazon or Alibaba. In a comprehensive 100-page report, UBS said Reliance Industries can become a market leader in telecom and media, while gaining a significant share in retail/e-commerce.

"Its 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," UBS said in its report.

According to the UBS report, its China internet analyst, Jerry Liu, has listed some similarities between Alibaba and Reliance Industries such as pursuing an ecosystem or a bundling strategy in a high-growth fragmented retail sector with lower online penetration and home-turf advantage.

"Similarly, Eric Sheridan, our US internet analyst, thinks Amazon's core value proposition to customers is its Prime subscription, which offers free shipping and video & music content," the report noted.

"Our assessment of the capital framework, regulations, business positioning and emerging trends in each of its consumer-facing business indicates RIL can lead in telecom & media and gain significant share in retail/e-commerce," it added.

The report found another similarity RIL shares with Amazon and Alibaba: an ecosystem strategy. "The biggest difference is that the Chinese and American internet platforms do not own telecom networks," it noted.

"But based on the success of Amazon Prime, and similar memberships such as Alibaba's 88VIP and JD's Plus in China, we believe bundling of products and services is a tried and true strategy, and this should play to Reliance's advantage," the report highlighted.

Addressing the "Vibrant Gujarat Global Summit 2019" on January 18, Reliance Industries chairman and managing director Mukesh Ambani had announced that the company would double its investment and employment numbers over the next decade.

He had said Reliance Jio and Reliance Retail would soon launch a new commerce platform for small retailers - a mega mission which will first be launched in Gujarat and then across the country.



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