Reliance zeroes in on last-mile delivery & customer experience to out-do Flipkart, Amazon

NEW DELHI: Reliance Industries has identified last-mile delivery as the biggest challenge for its planned online marketplace venture and will focus on nurturing this aspect of the business, where rivals Flipkart and Amazon have asignificant head-start, sources said.

“Last-mile delivery and the overall customer experience are going to be priority areas for Reliance,” a source said, asking not to be identified. Reliance plans to invest heavily to build a robust supply chain, including its own delivery logistics, and will also use third-party companies as “it wants to take ownership of delivery and experience,” the source said.

The key focus for the oil-to-retail conglomerate will be on speed and the ability to deliver the right products with minimum errors, the source said.

Reliance did not immediately respond to queries seeking comment on its last-mile delivery plans.

The online marketplace will host all of Reliance Retail’s businesses, including grocery, fashion, jewellery and electronics, apart from independent sellers.

Reliance has plans for large hiring – directly and indirectly – for its ecommerce entry, the person said.

When Reliance unveiled its plan of make use of its telecom service – Reliance Jio Infocomm – and the Reliance Retail chain for a “hybrid online-to-offline” venture on Thursday, chairman Mukesh Ambani said the company would leverage legions of kirana stores as last-mile delivery partners.

ET reported last week that Reliance is working on a multi-channel platform where goods and services can be offered and purchased from anywhere through online and offline routes. While products will be delivered to their doorsteps, customers would also have the option of picking up their purchases from Reliance’s network of stores or the outlets of its last-mile delivery partners.

Entities such as Amazon and Myntra are using an increasing number of small retailers as their last-mile delivery mechanism.

A retail analyst with a foreign consulting firm said Reliance is a deep-pocketed, long-term player prepared to lose money in the initial stages and to invest heavily in supply chain development.

“It is going to be tough but they have two parts already covered really well. They got solid physical retail business where they have got suppliers, whether it is fashion or food and grocery,” he said.

“Similarly on the Jio side, they can push apps. Thirdly, they have deep pockets and we have seen what they have done on retail and Jio.”

Reliance has already built a nationwide network of warehouses and a supply chain to feed its 7,500 outlets, but analysts said Reliance needs special focus when it comes to ecommerce delivery.

“Today, Reliance’s logistics network would be geared to servicing stores and stores pick up a certain amount of bulk,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight. “But servicing individual customers at their doorsteps is different.”