RIL PLANS TO SET UP JIO HUBS
NEW DELHI: India’s richest man Mukesh Ambani plans to build Jio Hubs, a one-stop shop for all consumer items sold by Reliance Industries Ltd (RIL) and its units ranging from electronics to groceries, to provide people living in small towns their first mall-like shopping experience.
The aim is to leverage the strengths of units Reliance Retail Ltd’s physical stores and Reliance Jio Infocomm Ltd’s digital infrastructure to boost sales in smaller towns, which have largely been untouched by modern retail and online shopping.
Jio Hubs is the biggest focus area for the company after Jio GigaFiber broadband services, a person familiar with the development said, requesting anonymity. The Jio Hubs project is in line with Ambani’s vision to bring together telecom, retail and e-commerce to become a technology platform. “It is the chairman’s (Ambani’s) pet project. The company has realized that it has to reach small towns to get big volumes,” the person said.
At Reliance Industries’ annual general meeting on July 5, Ambani said, “we see our biggest growth opportunity in creating a hybrid, online-to-offline new commerce platform”.
“Small towns need assisted e-commerce and the comfort of a physical space where after-sales service is also available,” said a retail sector analyst, requesting anonymity.
“Jio Hubs could showcase what is available and act like experience centres. Most impor- tantly, these hubs could also hold inventory and act as warehouses as it satisfies the 100% India owned requirement under the draft e-commerce policy.”
Under the draft e-commerce policy floated by the government last month, only Indian-owned firms will be allowed to hold inventory.
“The company plans to set up close to 800 such Hubs which will sell all consumer items under Reliance. The investment required for setting these up will be finalized within a month,” the person cited above said.
The plan to reach local markets, know local merchants and local customers assumes significance given a large chunk of Indian population still shops offline. The online retail market in India has more than tripled since 2015, but it is only expected to contribute to 2.9% of the total retail sales in 2018, a June report by researcher eMarketer said.
RIL has a formidable physical presence in the country with 7,500 stores across 4,400 cities under its subsidiary Reliance Retail.