Reliance Industries, the India energy company, is gearing up to invest 100 billion rupees ($1.4 billion) as part of its efforts to diversify into eCommerce.
According to a report in Reuters citing Reliance Industries Chairman Mukesh Ambani, the invest will be poured into the eastern state of West Bengal in India. The move comes in the wake of new eCommerce rules in India that took effect this month, affecting multinational online retailers like Amazon and Walmart.
Reliance Industries already has retail stores in operation that sell clothes, groceries and more. The idea behind the company’s “new commerce” eCommerce initiative is to connect small merchants with a retail network and warehouses to help the merchants handle inventory, the report said. The investment would go to increase the warehouse space in West Bengal over the next two years. Ambani said the eCommerce platform Reliance Industries is creating will “bring win-win benefits to consumers, retailers, and producers” and help 30 million small merchants.
Ambani said the company is also gearing up to expand its telecom services and open a data center that is “as good as the ones in Silicon Valley,” reported Reuters. He added, “There is no area of the economy, governance or life which is untouched by the revolutionary potential of digital technologies.”
The chairman of Reliance Industries has gotten more aggressive in his push into eCommerce in wake of the new eCommerce rules that have already hurt Amazon. Amazon was forced to sell 25 percent of its stake in Cloudtail Thursday (Feb. 7) in order to be compliant with the new rules. Thousands of listings were suspended as of the start of February, prompting Amazon to hastily sell the stake. Under the new eCommerce rules, foreign companies can’t own stakes in the merchants and are prohibited from striking exclusive deals. It has forced both Amazon and Walmart to overhaul their operations in India, resulting in a rise in costs to operate in the country.