As Reliance Retail prepares to launch its own e-commerce platform that will sell everything from food to fashion, the Mukesh Ambani-owned company is withdrawing its own products such as clothes, shoes and lifestyle products from would-be rival marketplaces like Amazon India and Flipkart.
According to a report in the Economic Times, Reliance retail is withdrawing its own brands as well as global brands for which it has selling rights in India. The process has gathered pace in recent month as RIL prepares for its biggest online initiative later this year, the business daily mentioned citing three people aware of the development.
It may be noted that Reliance Retail has the highest number of global fashion and lifestyle brands in its stable with around four dozen joint ventures or master franchise arrangements with international labels including Diesel, Kate Spade, Steve Madden, Burberry, Canali, Emporio Armani, Furla, Jimmy Choo and Marks & Spencer. Many of these brands are sold online on Amazon, Flipkart, Myntra, Jabong and Tata Cliq, among other sites.
The ET report citing sources said the move from Reliance is an attempt to create exclusivity for global as well as its own brands to attract consumers to its portal.
Reliance Retail did not respond to an email seeking comments sent by ET.
Reliance Brands, the flagship subsidiary that holds rights for the majority of global brands, has been instructed by the head office to stop supplies to third-party marketplaces from this month, another person with direct knowledge of the development told the publication. “They have been told to sell only on Ajio-.com and through their own monobrand sites for different labels,” the person said, asking not to be identified.
Industry experts are of the view that Reliance Retail has an edge over foreign-funded players such as Amazon and Walmart-owned Flipkart after the government updated its regulations on foreign direct investment (FDI) in e-commerce marketplaces in December.
The two FDI-funded online marketplaces can only act as technology platforms that connect independent sellers and buyers. They cannot sell, own or control inventory. However, an Indian firm with no foreign investment can exercise control over inventory, thereby controlling pricing, quality and speed of delivery — key elements for the success of any e-commerce business.