Digital Retail for Reliance

Ideathon – Team Mindhunters

India’s Online Retail Market is expected to be valued at $200
Billion by 2030, representing a CAGR of 21% from FY18-30
Online Retail Market Size ($US B) Online Retail/Total Retail (%) Reliance – Retail Operations
8.0%
200 8.0%
Revenue: Rs.1.30 Trillion | Profit: Rs.55.6 Billion

150
5.0%
6.0% • India’s largest retailer by reach, scale,
revenue and profitability
100
2.9%
4.0% • Presence across 5 key consumption baskets
• Leadership position in food, consumer
50 2.0% electronics and fashion retailing

0 0.0%
10,415 6600+ >500M
2018 2020F 2030F towns,
Stores footfalls
cities
Key Drivers

Demographics: Young demographic profile,

rising income and consumption expenditure Vision and strategy
To integrate stakeholders along the entire retail
Digital Infrastructure: Increasing internet
value chain through a pan-India ecosystem
users, smartphone penetration, payments
which will connect physical and digital spaces
Economy: Robust investments, government to provide quality products at affordable prices
policy push incl. FDI, entry of foreign players to all customers

Jio with its strong presence across retail, digital services and media & entertainment businesses, is
uniquely positioned to tap India’s growing online retail market through a multi-channel strategy
Source: RIL Annual Report 2018-19, IBEF
How can Reliance increase its online retail market share by
integrating online and offline marketplaces?
ONLINE RETAIL MARKET SHARE

SUPPLIERS CONSUMERS

PRODUCERS TRADERS New Markets Existing Market

Untapped Offline
RETAIL CHANNELS Geographies Customers
700 M 300 M

10,000
Reliance Retail Rest of Industry
PoS
300 M

3 crore Kirana Stores Online

Jio Points Traditional Retail
Customers

Super/Hyper
Modern Retail
markets
Buy Online Buy Physically

Wholesalers Wholesalers
 Value Propositions and Delivery Mechanisms for all key
stakeholders
1. Access to diversified retail channels
1. Larger customer base incl.
registered on JPA
VP small kirana stores DM
SUPPLIERS 2. JPA will replace middlemen
2. Increased Margins
3. Physical and digital distribution
3. Hassle-free last mile delivery
platforms

1. Demand Planning, Inventory 1. Consumer insights generated

Management through JCA
VP 2. Portfolio of modern retail DM
2. Jio Partner App will provide a
RETAILERS management services retailer interface with all features
3. Access to new customers, run 3. Personalised deals made possible
promotion & loyalty programs through predictive analytics
4. Link to Reliance’s supply chain 4. Through Jio Points

1. Consumers get multiple touch 1. JCA, Jio Points and Mom & Pop
points to discover and order Stores
2. Assisted shopping at Jio Points 2. Store operators will guide the
and Jio Partner stores customers
VP DM
CONSUMERS 3. Multiple Payment modes will 3. Both online, offline payments mode
provide flexibility to choose 4. Jio Commerce network to be a pan-
4. Increased accessibility' India ecosystem of retail partners
5. Stellar shopping experience 5. Augmented reality (long term plan)
6. Unlimited Choice 6. Large portfolio of brans

VP – Value Propositions | DM – Delivery Mechanisms JPA – Jio Partner App cum Point of Sale | JCA – Jio Customer App
Jio Commerce App – Interfaces & Features

Partner App/POS Customer App

Features Features

Integrated Inventory Tracking Virtual Reality walkthrough

Order Management AI-enabled multi-lingual interface

Hyper Local Customer Insights chatbot

Smartphone based billing Flexibility of multiple payments

Loyalty Management option, now possible at Jio Partners

Assisted Shopping

Benefits
Benefits
Demand Forecasting
Higher Inventory Turnaround Instant hyperlocal delivery

Cost Savings on multiple payment Personalized offerings/deals

terminals and expensive POS

hardware
Through a combination of inorganic growth and leveraging
inhouse capabilities ..

Deliver an enriching
Comprehensive Direct delivery to stores Provide multi-channel retail
shopping experience with
network of vendors from from chain network; experience, ensure last
increased accessibility,
farmers to large fleet of vehicles and mile delivery and reach
choice, quality and
enterprises logistics partners customers everywhere
personalized offerings

Suppliers Logistics Retailers Customers

• Logistics • JCA App

• Supplier network
capability • JPA App building building
building – Indian
building, • Signing up local • Data Analytics
+ international
including hyper merchants and continued
vendors
local logistics development

• Invest in digital
• Partner with
• Leverage • Inorganic growth tools including
digital providers
existing network through AR, ML, etc.
for a seamless
• Onboard new acquisition and • Acquire/partner
Partner Tool that
suppliers partnerships with firms that
will act as a
• Franchise intl. with logistics help bolster
POS + connect
brands firms customer
with suppliers
experience
.. our integrated operating model will connect the entire
retail ecosystem of producers, retailer & customers in India

Deliver an enriching
Comprehensive Direct delivery to stores Provide multi-channel retail
shopping experience with
network of vendors from from chain network; experience, ensure last
increased accessibility,
farmers to large fleet of vehicles and mile delivery and reach
choice, quality and
enterprises logistics partners customers everywhere
personalized offerings

Suppliers Logistics Retailers Customers

• Logistics • JCA App

• Supplier network
capability • JPA App building building
building – Indian
building, • Signing up local • Data Analytics
+ international
including hyper merchants and continued
vendors
local logistics development

• Invest in digital
• Partner with
• Leverage • Inorganic growth tools including
digital providers
existing network through AR, ML, etc.
for a seamless
• Onboard new acquisition and • Acquire/partner
Partner Tool that
suppliers partnerships with firms that
will act as a
• Franchise intl. with logistics help bolster
POS + connect
brands firms customer
with suppliers
experience
Connected through Jio’s 5G and Fibre networks
42 Billion USD worth of business value for Reliance by 2030

• Higher Revenue Growth – New markets, channels

Benefits
• Cost Savings – Efficiency, Higher margins
Value

• Investments in acquisitions, tech capability building

Costs
• Licenses, PoS procurement and installation

204,672
Initial Capital Expenditure – INR 37,000 Crore

NPV – INR 300,000 Crore (~ USD 42 Billion) 146,155

Payback Period ~ 4.5 years 103,520

72,558
Return on Investment – 800 %
50,160
34,037
22,501
8,549 14,310
1,820 4,550

FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30

Reliance Retail Projected Cash Flows (INR Crores)

Jio Commerce is an opportunity to promote inclusive growth
and shared prosperity across India’s retail ecosystem

Employment & Wealth creation

India has 30 Million merchants and kirana shop owners – the backbone of Indian commerce

They generate direct and indirect employment for 20 crore people

Technological Advancement

Customers and merchants will have access to the benefits of AI, ML, Cloud, Blockchain

Our platform will enable Kirana stores to stay competitive with large E-commerce players

Bharat meets India

Millions of Indian’s in rural India will be able to access E-commerce, digital payments

Jio Commerce will connect retail footfalls, Jio customers and JioGiga Homes

B2B and B2C consumption data of 900 M Indians can be leveraged to improve service
Offering to be launched pan-India in 3 phases
PHASE I PHASE II PHASE III

Fashion apparel, Health

Groceries, Stationery, Electronics, Home &
Categories & Household, Home &
Personal Care, Time Furniture,
Kitchen

Geographies Metros, Tier 1 Cities Pan India Pan India

E-Commerce & Internet Non-Ecommerce Users

Target Segment Everyone
Users & Non-Internet Users

Customer Acquisition & Customer Acquisition & Customer Retention &

Objectives
Brand Awareness Brand Loyalty Deeper Penetration
End-to-end solutions to
Product VR Walkthroughs,
Launch of JPA & JCA link retailers and
Innovations Multilinguality of Chatbot
consumers
Mass Media Marketing,
Launch offers, Exclusive Tie-
Marketing Tactics Referral Schemes, Pop-up Stores
ups Social Media Marketing
Loyalty Programs

Timeline Nov. 2019 – June 2020 June 2020 – Dec 21 Jan 2021 – ahead
Digital Retail for Reliance
APPENDIX
Business Case Assumptions

ASSUMPTIONS
# POS in India 30,000,000
Cost/ POS (including installation) 10,000

Reliance Online Retail CAGR (FY18-30) 30%

Physical Organized Retail CAGR (FY18-30) 15%

Physical Unorganized Retail CAGR (FY18-30) 5%

WACC 8%
Corporate Tax Rate 30%
EBIT Margin 10%
 Business Case Approach

Capital Outlays

Technology Acquisitions (INR Crore) 7100

POS Purchase and Installation 30000
Consulting Services 100
Software Licenses 100
Total CapEx 37300

Gains Year 0 1 2 3 4 5 6 7 8 9 10 11

Reliance Retail Online

revenue (INR crores) CAGR 130,000 175,500 236,925 319,849 431,796 582,924 786,948 1,062,380 1,434,212 1,936,187 2,613,852 3,528,701
Physical
CAGR 130,000 149500 171925 197714 227371 261476 300698 345803 397673 457324 525923 604811
Incremental Gain in
Revenue (Online
over Physical) 26,000 65,000 122,135 204,425 321,448 486,250 716,577 1,036,540 1,478,863 2,087,930 2,923,890

Incremental EBIT 2600 6500 12214 20443 32145 48625 71658 103654 147886 208793 292389

FCFF -37300 1820 4550 8549 14310 22501 34037 50160 72558 103520 146155 204672
Cumulative Cash
Flow -37300 -35480 -30930 -22381 -8071 14431 48468 98628 171186 274707 420862 625534
Digital opportunities exist across the Retailer value chain
Traditional retailers…
 Compete on price and quality alone, focus only on in-store journey, follow ad-hoc
assortment prioritization & haven’t adopted online channels and digital tools

Procurement & Vendor Mgmt. Contract management and supplier payments

Logistics & Warehousing Shared logistics capability, Continuous monitoring

Financial Management Digital payment solutions

Assortment-mix & Planning Demand forecasting, Assortment planning algorithms

Human Resources Managing staff shifts, HR KPIs tracking

In-Store Exp. & Front-end Enhancing online and in-store customer journey

Store Layouts Pricing Loyalty Programs POS Solutions

Customers are increasingly connected and experience-driven
Traditional retailers…
 Need to adapt to emerging purchase patterns and behavior by connecting with
consumers through digital channels and customizing their offerings

CUSTOMER JOURNEY
SEARCH Product information, pricing
CONNECTED EXPERIENCE

EVALUATE Personalized offerings, deals

ONLINE AWARE

SHOP In-store experience

New-age consumer
characteristics
TRANSACT Quick & Cash-less payment
RESPONSIVE SOCIAL
IMPACT

CHAT Customer Feedback

HEALTH
CONVENIENCE
CONSCIOUS
POST-PURCHASE Loyalty Programs
Our vision of ‘New Commerce’ connects the entire retail
ecosystem of producers, retailer and customers in India

Suppliers Jio Platform Buyers

Reliance Brands Shoppers

Jio Cloud

Jio Commerce
Businesses
Sellers
Logistics Jio Commerce

Jio Partners Jio Partners