New Delhi: After building a ‘digital layer’ (Jio Platforms) on top of the existing ‘physical layer’ of retail stores, Reliance Industries would focus for the next four years on adding a third ‘commerce layer’ and monetizing existing investments, BofA Securities said.
RIL is also looking to leverage users’ fingerprint and earn incremental revenue from digital ads, digital loans, and even engagements like playing alongside IPL, KBC, etc., it said in a report.
Over the next 3-5 years, RIL is expected to have 500 million mobile users, offer broadband services to 20-25 million households, and serve 12-15 million small businesses.
“In the last 4 years, with Jio, RIL has been able to build a ‘digital layer’ on top of the existing ‘physical layer’ of retail stores in electronics, groceries and clothing, as well as the depth and breadth of India.
“We believe that over the next four years, RIL’s focus would be to add a third ‘layer of commerce’ and monetize existing investments in different formats,” the brokerage said.
Jio has 388 million subscribers at the end of fiscal 2020. Reliance has partnered with WhatsApp to deliver grocery products from local Kirana stores to customers.
Like Amazon, Alibaba and Tencent, RIL has the potential to create shareholder value to retain its customers, believes BofA Securities.
“RIL’s approach to owning the ‘pipeline’ as well as the ‘services’ offered in the pipeline should help it hold the subscriber base captive, and apart from the main telecom and retail offerings, the company could also offer other services.” , said.
For example, entertainment offers would help RIL improve adherence. Jio might not fully monetize this, but it would hold users captive to cross-sell other offers.
RIL is also focusing on leveraging technology to deliver educational technology, health technology, and agricultural technology services.
“We also believe that gambling will pick up in India as the country has a mixed youth population,” he said.
An omnichannel approach to commerce would help RIL sell its grocery, clothing, and electronics items to a wider audience base.
“By working with the kiranas, RIL would probably also increase its B2B sales,” said BofA.
Stating that the potential sale of stakes in the retail business will be a catalyst, he said that Reliance Retail can follow the Jio Platforms model, bringing in multiple investors by selling stakes in the company.
RIL has reportedly offered the 13 investors of Jio Platforms (including Facebook, Google, etc.) the option to invest in its retail unit.
This story was published from a news agency feed with no changes to the text. Only the title has been changed.
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