gdpr-cookie-consent domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home/u570418163/domains/altechbloggers.com/public_html/wp-includes/functions.php on line 6131Is it just business, or is something big happening with Reliance Industries and the Ambani family? Many people wonder why Mukesh Ambani and his family spend so much, as there are rumors of spending thousands of crores of rupees on a wedding. This spending level seems unique compared to other big business families in India. Some people are both excited and scared by the rapid growth of companies like Jio. This raises the question of who controls our information and our daily choices.
Many people still consider DMart to be a very big retail chain. DMart has around 415 stores across India. But Jio Smart Bazaar has more than 2,500 stores. Reliance did not build this business just from the beginning; He took it over.
Story of Big Bazaar
Remember Big Bazaar? It was very popular around 2019 and 2020. In 2019, Amazon invested in Big Bazaar. Amazon placed a condition that if Big Bazaar needed more money later, they would ask Amazon first. Amazon’s plan was clear: Walmart, a large offline retailer in the US, was a large competitor. Amazon wanted to use Big Bazaar to compete in India’s offline market in the same way as Walmart. Shortly after Amazon’s investment, COVID-19 lockdowns occurred. Big Bazaar was expanding rapidly, opening many rented stores. The lockdown caused a lot of problems. Big Bazaar ran out of money.
Then Reliance entered. He offered to buy Big Bazaar for ₹24,713 crore. Reliance told Big Bazaar not to tell Amazon about it until the deal is finalized. Big Bazaar agreed because they were in a lot of trouble. However, Amazon found out and filed a case against Big Bazaar. Amazon claimed that Big Bazaar broke the agreement by not asking them first. Then Big Bazaar went back to Amazon and asked for money. Seeing this, Reliance also filed a case against Big Bazaar. Big Bazaar got stuck between two big companies. He was not getting funding from anyone, and he had run out of money of his own. They were not able to pay the rent of their store.
Reliance’s clever move
As long as the court cases were going on, Reliance took a big step. They went directly to the landlords who owned Big Bazaar’s stores. Reliance offered more money to these landlords to lease their properties. Since Big Bazaar was in trouble, many landlords agreed to lease their stores to Reliance. When Big Bazaar finally settled the matter with Amazon and came back to Reliance, Reliance said they no longer wanted to buy the company. Reliance already had control of many important store locations in Big Bazaar. The move saved Reliance money and quickly gained a large network of physical stores. This shows how important right timing and smart decisions are in business.
After acquiring offline stores, Reliance faced a challenge in online retail. Around 2021, Blinkit, Zepto, Swiggy Install, and other Quick Commerce apps were transforming the market. Everyone felt that these apps would replace traditional stores by giving faster delivery.
Reliance has two main rules for entering any business:
This method was clear with Jio. Reliance already had experience running a telecom company in the early 2000s. He prepared for years before launching Jio in 2015-16, which disturbed the telecom market.
The story of Dunzo
The quick commerce market was new and was costing a lot of cash. Reliance did not want to spend a lot of money in building this market from the beginning. Instead, he invested ₹2,000 crore in Dunzo, a quick commerce company. This investment gave Reliance 26% of the shares and significant voting rights, including veto power.
Reliance encouraged Dunzo to expand quickly, offering more funds if needed. Dunzo used this money for these things:
Reliance learned a lot from Dunzo’s efforts. By 2023, Dunzo again ran out of money. The quick commerce market had boomed but was now slowing down. Other companies such as Zomato had bought Blinkit, and many investors were worried about Quick Commerce making money. Dunzo tried to raise more money from other investors. But the market was not going well, so investors offered less money than the price of Dunzo. This is called “down round”. Dunzo was prepared to accept this reduced offer to run the company.
However, Reliance used its veto power. He told Dunzo that they would not let him accept the down round. Reliance refused to invest any more money itself and also stopped Dunzo from taking money from elsewhere at low valuations. This left Dunzo with no choice. The company faced difficulties and ultimately failed. Reliance then took Dunzo’s technology and integrated it into its JioMart platform.
JioMart’s delivery strategy
From Dunzo’s experience Reliance learned that very fast deliveries (such as delivery in 10 minutes) are very expensive. Therefore, Geomart decided not to promise delivery in 10 minutes. Instead, they deliver within 10 minutes to an hour. They save a lot of money from this strategy. Instead of carrying one order of one rider, Geomart waits until there are multiple orders going in the same direction. Then, a rider delivers multiple orders at once. This reduces the expense of delivering 10 items from ₹300-₹500 to just ₹70-₹100. JioMart understood that most people do not need super-fast delivery. They want cheap items and free delivery so that they do not have to go to the store. Unlike premium quick commerce apps, JioMart offers local products at lower prices.
Milk Basket Model
Reliance has also launched a service named Milk Basket, which is their own. The milk basket works like an old milk system. Customers subscribe for daily essentials like milk, bread and eggs. A delivery person delivers these items every morning on a fixed route. This system is very efficient. One person can deliver items to 20-30 households in a single trip. This reduces delivery costs even further, sometimes by just 10 paise per item. This model makes the facility affordable for customers.
You might be wondering why the Ambani family will spend thousands of crores of rupees on marriage. This seems like a huge expense. Adani, Tata and Birla Group also have rich families, but they do not spend money like this.
The Ambani family is trying to create something different: the direct-to-consumer (D2 C) brand. They want to reach customers directly. That’s why he made the wedding look like a national event, calling it “the country’s wedding”. They want people to feel connected, almost like Ambani is “one of us” This motivates people to try their products. Reliance is believed to have spent about ₹450 crores on advertising of this wedding only. Such expenditure ensures that everyone in India knows about it.
Reliance’s huge retail empire
The claim that Reliance has 2,500 stores is misleading. He owns 2,500 grocery stores. But their empire is much bigger than this:
Apart from these Indian brands, Reliance also partners with several international premium brands such as Armani, Gap and Marks & Spencer. They have around 400-500 brands in their portfolio. They have over 18,000 physical stores and partner with over 1 lakh local grocery stores across India (which often show signs of “Geo Partner” or “Geo Smart Partner”). His revenue is more than ₹3,25,000 crore. In comparison, DMart has 415 stores despite having long.
How Reliance Brands Succeed
It is difficult to believe that all their brands are successful. Reliance understands its target audience very well. They don’t just create brands; They create categories of brands.
For example, for bottled water, they offer several options:
They also sell popular brands like Bisleri. If you buy Bisleri from their store, Reliance may make less profit. But if you buy Sure or Independence, they make more profits. They ensure that they have an option for all types of customers.
Revival of Campa Cola
Take the example of Pepsi and Coca-Cola vs Campa Cola. Reliance first started JioMart and asked Pepsi and Coca-Cola to offer their products at the lowest prices. People started buying soft drinks from JioMart because they were cheap. Then, Reliance quietly launched Campa Cola in similar packaging. After some time, he stopped giving discounts on Pepsi and Coca-Cola and started giving discounts only on Campa Cola.
Customers who were used to buying discounted soft drinks from JioMart often picked up Campa Cola without realizing it was a separate brand. They thought this was also some other discounted item. Thus, Reliance is using its strong distribution network to launch its own products. Reliance is now trying to make many everyday items like flour, pulses, sugar and rice itself. They can earn more profits by selling them under their own brand.
Not all of Reliance’s ventures have been immediately successful. Around 2016, when Jio launched, Reliance also launched LYF (called “Life”) mobile phones. These were 4 G phones. At the time, most people had 3 G phones, and the 4 G network was not much available. Reliance’s idea was to sell 4 G phones and accompany them with a free Jio SIM.
However, LYF phones were not very good. People often used them as Wi-Fi hotspots just for their families because SIM was free. When Reliance realized this, they partnered with Samsung to start offering free SIM with Samsung phones. Gradually, LYF phones were discontinued as Jio SIMs became available to everyone.
LYF phones didn’t work because the market wanted better technology, like good chipsets for gaming. Chinese companies were selling cheap phones with better technology. Reliance realized that it was difficult to compete in the mid-range smartphone market. Eventually, they stopped making LYF phones. Later, they launched easy Jio feature phones (phones with buttons) priced under ₹3,000, targeting a different market. They learned that they could target either a very low-end or a very high-end market, but the middle market was very competitive.
The power of data and AI
From these experiences, Reliance understood the importance of content and distribution. He started buying media channels, which gave him the power to influence news and people’s opinions without paying Google or Facebook for ads. He also has his own movie studio.
One of his biggest steps was to obtain distribution rights of a large amount of content. He took a big step with JioCinema, which was filled with popular movies and shows. This gave them a large user base and a lot of strength in the content streaming market. He also bought JioSaavn for Music.
Reliance also developed a financial app like PhonePe or Google Pay. This did not initially succeed because he refused to give cashback or spend money on promotions, which went against his rule of not spending cash. However, he maintained the technology. Today, Reliance’s own transactions, which are worth more than ₹3 lakh crore, use this very internal software. If they used another payment service like Razorpay or InstaMojo, they would have to pay 1.5% to 3% as transaction fees. By using their own systems, they save a lot of money.
This system also collects a lot of data. Reliance tracks everything:
This data helps them know how much money you have and what you buy. Earlier, this data was difficult to analyze. But with Artificial Intelligence (AI), it is now much easier to misuse or optimize this data. Reliance is creating India’s largest database, which will be ready soon. They are also investing in AI operating systems and companies that use AI for education.
Reliance has entered many different sectors like retail, footwear and clothing, and disturbed small businesses without completely eliminating them. Convenience still matters to many people; People often choose a nearby shop for early shopping, even if Reliance is offering slightly cheaper prices at a distance.
However, the service sector is different. Online services are already convenient. If Reliance implements its cost-saving and market disturbance strategy on online services, it can dominate. He has already launched an income tax filing service at a very low cost, which is much lower than the fees of many accountants. They are also investing in AI companies which provide educational services. Imagine Reliance having an AI-powered online school that is accessible to everyone. This can eliminate the need for many other education providers.
Reliance knows who to target. They have data on your spending power, what you buy for your family, and even what snacks your kids eat. They don’t need to pay Facebook for ads; They have their own distribution network, news channels and India’s largest paid content app, JioCinema. They can distribute any new product or service for free. It is not difficult for them to create this tool.
This huge benefit can change the entire industry. If you are planning to start an AI company, you will have to pay for computing power. Reliance is building its own data centres. It is risky to have so much power and data under the control of a single company. The possibilities of what they can do with so much data are endless.
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