Mukesh Ambani is all set to shake the Indian digital market space as he is planning to launch an Alibaba-like venture. He unveiled plans of setting up a $24billion digital services holding company that would dominate the Indian internet shopping space. In the latest move, the board of Reliance Industries has proposed to plow in ₹1.08 trillion ($15 billion) into the fully owned subsidiary, which in turn would be invested in the Reliance Jio Infocomm Limited. With a series of capital transfer, Reliance Jio Infocomm would be made debt-free by March 2020. As of now, Reliance Jio’s debt stood at Rs 84,000 crores; its stand-alone profit was Rs 990 crores for the September quarter against the revenue of Rs 12,354 crores.
Mukesh Ambani’s e-commerce platform is set to compete with the likes of established e-commerce platforms like Flipkart and Amazon. Earlier in August, Ambani announced that the Reliance’s new businesses and Retail would contribute to half of the company’s earnings as compared to 32% as of now. It is learned that Ambani had discussions with various stakeholders and other network partners in a bid to build a backbone for his e-commerce plans.
The Journey of Reliance Industries in India
Reliance Industries is the India’s largest private sector company and includes, hydrocarbon production and exploration, petroleum refining and marketing, petrochemicals, retail and telecommunications (Reliance Jio, Jio Fiber). Reliance Jio has created a revelation ever since its launch in September 2016. Within no time, the telecom operator emerged as the leading telecommunications service provider in India. With offerings such as unlimited voice calling and free data benefits, the telco has succeeded in luring a majority of subscribers from the other telecom operators. Many rival telcos like Airtel, Vodafone Idea, and BSNL have to bear the brunt and are on the receiving end of losing a large number of subscribers. Jio currently has more than 350 million subscribers in the country. Reliance Jio has recently announced the commercial launch of Reliance JioFiber services in India. The telco offered various broadband plans starting from Rs 699 with data speeds of up to 1Gbps.
Mukesh Ambani Taking a Cue From Jack Ma’s Alibaba
While Jack Ma started Alibaba in 1999 from scratch, and the market valuation of the Chinese multinational conglomerate stood at $454 billion. However, Ambani is looking to build a similar thing like Alibaba by connecting consumers and retailers. Recently, Ambani has revealed plans to sell a 20% stake of Reliance Oil and chemical business to the Saudi Arabian Oil Co (Aramco) at an enterprise value of $75 billion. With the new holding firm, Ambani has announced to take the business to public offering within five years.