Why Jefferies Says It Will Be Tough For Reliance Retail To Do A WeChat
Why Jefferies says it will be tough for Reliance Retail to do a WeChat.
While Reliance Industries Ltd. looks to integrate its multiple customer-facing segments into a super app, Jefferies thinks that may not be as easy.
“China has seen great success in integrating commerce on WeChat and possibly Reliance Retail is trying to replicate the same,” the research firm said in a report. “While a super-app structure will bring several offerings under one platform, driving cross-selling among existing user base and generating platform synergies would be a challenge to overcome in the context of strong vertical and horizontal competitors,” it said. “Execution remains critical in this context.”
Horizontal competitors are those that have various offerings, while vertical has a single category.
RIL’s retail unit has businesses across grocery, fashion and lifestyle, media and telecom. It has acquired e-pharmacy portal Netmeds, furniture and décor e-tailer Urban Ladder, intimate wear e-tailer Zivame, and micro delivery service platform Milkbasket. Reliance Retail also has a majority stake in online to offline fashion platform Fynd and search engine Just Dial.
Jefferies, citing media reports, said Reliance Retail intends to integrate the app with WhatsApp. “At the time of investment by Facebook in Jio Platform, Reliance Retail and WhatsApp decided to work together on the merchant partnership. There was a pilot undertaken to allow users to order on Reliance Retail through WhatsApp, which had to be delayed.”
Yet, according to the research firm, there is a lack of clarity on which apps will be part of Reliance Retail’s super-app ecosystem. Besides, the company is awaiting clarity on the new e-commerce regulations before the rollout.