(Bloomberg) – Amazon.com Inc. has started making everything from deliveries and insurance to groceries to drugs in India, setting up a monumental clash with Mukesh Ambani’s hard-charging Jio platforms.
The American giant is moving at a pace not seen anywhere else in the world. Amazon now supplies medicines and herbal medicines and herbal medicines in Bangalore. It began last month with sales of car and motorcycle insurance – a first for the Seattle-based online giant – which claimed to finalize policies in less than two minutes without paperwork. The pilot last year launched a restaurant delivery service to Prime subscribers in parts of Bangalore. And it has even been reported to discover wealth management services this year.
These eclectic choices coincide with a similar rapid fire expansion by Jio’s mother, Reliance Industries Ltd. The energy-to-retail conglomerate run by Ambani, one of the richest men in the world, scored more than $ 20 billion in investments in just months from supporters, including Facebook Inc. and Google’s Alphabet Inc. to make an Indian behemoth. On Wednesday, Reliance’s retail unit announced that it had acquired a majority stake in a top e-pharmacy Netmeds. And it is preparing to add a suite of financial products and services, including insurance, brokerage and mutual funds.
“This is going to be one big blow,” said Satish Meena, senior forecasting analyst at Forrester Research Inc. “Amazon and Reliance want to meet a person in every need, from online retail to financial services to entertainment. It’s a battle for household spending.”
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The most brutal battle will be in shopping, which accounts for 55% of all Indian retail sales, according to Forrester. While it is still early days, Amazon has been slowly pushing groceries through Amazon Pantry and producing through Amazon Fresh. Confidence recently launched competitor JioMart in 200 cities, and it averages 250,000 orders a day in weeks. Both also run across one of India’s largest wholesale chains, Future Retail, which controls Big Bazaar stores. Reliance has been negotiated over a purchase, but Amazon, which has a minority stake, may not be ready to gain its rival control.
Amazon is now testing farms for fruit and vegetables in the western city in the western city of Pune – first another world. It’s a direct attack on Jio: Ambani recently said that four-fifths of the fruits and vegetables sold at JioMart as if through their retail stores were directly from farmers.
“The hardest battle between the two will be fighting in the grocery stores,” Meena said. “Grocery is the strength of Reliance and they will assess their pricing power by combining their offline muscles.”
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