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How Mukesh Ambani Plans To Expand His Empire

Reliance Industries aims to expand its businesses beyond telecom into media, entertainment, e-commerce, online services, retail, and others. It plans to acquire Future Group's retail business to become the largest retailer in India. Reliance is also growing its media network, e-commerce platform JioMart, online fashion business AJIO, and health services through acquisitions. The company seeks to build scale in these sectors to compete against other major players through organic growth and strategic mergers and acquisitions.

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Vikrant Jain
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104 views3 pages

How Mukesh Ambani Plans To Expand His Empire

Reliance Industries aims to expand its businesses beyond telecom into media, entertainment, e-commerce, online services, retail, and others. It plans to acquire Future Group's retail business to become the largest retailer in India. Reliance is also growing its media network, e-commerce platform JioMart, online fashion business AJIO, and health services through acquisitions. The company seeks to build scale in these sectors to compete against other major players through organic growth and strategic mergers and acquisitions.

Uploaded by

Vikrant Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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How Mukesh Ambani plans to

expand his empire


By Surajeet Das Gupta
August 19, 2020 12:03 IST
Its trajectory in telecom is well known but now it is pushing for a
similar leap into the ranks of the top players in its other
businesses: media and entertainment, e-commerce, a series of
online businesses ranging from health to education, and retail.
Its trajectory in telecom is well known but now it is pushing for a similar
leap into the ranks of the top players in its other businesses: media and
entertainment, e-commerce, a series of online businesses ranging from
health to education, and retail.

First, retail. With a revenue share of over 12 per cent of the country’s
organised retail, Reliance Retail (this excludes their mobile and fuel related
retail) is now believed to be in the final stages of acquiring Kishore Biyani’s
Future Group’s retail business.

If the deal goes through, Reliance Retail will lord over a 16 per cent share of
the market, hitting more than Rs 100,000 crore as annual revenues, based
on the estimates of consultancy firm Technopak.

Or it will simply see its revenues nearly double from FY17 when they stood
at Rs 57,000 crore.

This will widen the gap with its key competitors.

Currently, the company’s revenues are equivalent to the combined revenues


of the next top four large retail players identified by Technopak: the Future
group, DMart, the Tatas (only Titan - if Croma and Trent are added, it will
be around Rs 30,000 crore, says Technopak), and Kalyan Jewellers.

Even if the deal with the Future group fails to go through, Reliance’s retail
business has been valued at $60-70 billion.

Mukesh Ambani announced in the last AGM that he will bring a clutch of
investors into Reliance Retail and monetise its shareholding.
The modern retail market in India in FY20 was estimated to be worth $650
billion (Rs 765,000 crore), an increase of 22 per cent over the previous
year, says Technopak.

The Covid-19 pandemic could, of course, slow down its growth or push it
into the negative in FY21.

Reliance is also building scale in its broadcasting business, i.e. expanding


its reach to viewers.

The Viacom18 network with over 40 channels has reached over 89 per cent
of the total 684 million paid TV subscribers as of July 2020, according to
company data.

These subscribers see at least one channel from the Viacom stable.

The network, which is third in the pecking order in terms of reach, is also
closing in on its rivals Star Disney and Zee which are still ahead by 7 to 8
percentage points.

In the online business, the company is building size through acquisitions


and organic growth. Its biggest challenge is in e-commerce where JioMart,
a latecomer to the game, will be locking horns with global heavy weights.

The company officially launched the app (earlier it was in the beta version)
a few weeks ago and intended to cover over 200 cities. Judging by its initial
actions, it seems to be on track.

That it is attracting consumers can be seen in the fact that JioMart,


according to App Annie, is number 6 in terms of downloads among
shopping apps, way ahead of Big Basket and Grofers but trailing behind
Amazon and Flipkart.

Reliance’s AJIO which offers online fashion, is also moving up.

Its ranking on App Annie in the shopping category has risen from number 5
in mid-July to number 3.

Data from SimilarWeb shows that its total visits on mobile web and the
desktop have seen a surge of 117 per cent from June to July to 1.91 million.

Reliance has used acquisitions for growth too, buying Saavn, the online
music OTT, and it is already paid dividends.
The acquisition has helped it reach the top of  the rankings in this category
with over 100 million subscribers, based on Google Play data for May.

Now Reliance is looking to build scale in its online health technology


business which is an area that needs attention.

For instance, JioHealthHub with over one million downloads (based on


SimilarWeb data for May) is among the smallest in relation to its
competitors which include Practo, Netmeds and 1mg.

JioHealthHub gets around 0.01 million daily average users.

Reliance's acquisition of Netmeds will help it add online medicine


orders - the key driver for such platforms - to its portfolio.

Secondly, given that Netmeds has over five million app downloads, a deal
will help JioHealthHub close in on, and even surpass, some of its rivals.

Reliance is also trying to build up the education technology business where


it is a small player compared with Byjus or Unacademy which reign
supreme.

It started in the game by buying a majority stake in Embibe for $180


million in 2018.

Embibe leverages artificial intelligence and analytics to identify children’s


weaknesses in exams and help them perform better.

It followed this up by acquiring online tutor start-up, Funtoot, and online


test preparation start-up MockBank which concentrates on government
jobs.

Photograph: Adnan Abidi/Reuters

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