After telecom, Mukesh Ambani now targets online retail with a price war
Billionaire Mukesh Ambani obliterated
rivals in India’s telecommunications sector by selling $2 data plans and free
voice calls. Four years later, he’s deploying a very similar tactic --
cutthroat pricing -- to gain an edge in the country’s increasingly competitive
e-commerce space.
As
India this week hits the peak of its biggest shopping season, the festival of
Diwali, the tycoon’s retail websites -- including JioMart -- are
elbowing their way into a space long dominated by Amazon.com Inc. and
Walmart Inc.’s local unit Flipkart Online Services Pvt.
Ratcheting
up competition, Ambani’s portals are offering blockbuster discounts of as much
as 50% on popular sugary confections and other holiday staples like spice mixes
for India’s rice delicacy, biryani. Meanwhile, his Reliance Digital website is
selling some flagship Samsung smartphones at prices cheaper than rivals, with
as much as 40% rebates.
It’s a push that comes as Ambani’s sprawling
conglomerate, Reliance
Industries Ltd., is flush with cash. After raising an eye-popping $20
billion for its technology venture, it’s shifted fundraising to its
retail arm, which has won over $6 billion in investment in recent weeks from
heavyweights like KKR & Co. and Silver Lake. Already India’s biggest
brick-and-mortar retailer, Ambani’s online ambitions pit him against the two
U.S. giants, both of which have invested big in India.
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