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Reliance to Digitise 5 mn Indian Kirana Stores by 2023: Report

Reliance, with a deep footprint in over 10,000 Reliance Retail outlets pan-India, is working on to create the world's largest online-to-offline new ecommerce platform

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Reliance Jio office. Source: www.reliancejio.website

As more and more neighbourhood kirana stores aim to modernise their tech infrastructure, the entry of Reliance Industries Limited (RIL) would help expand the current 15,000 digitized store base to over five million stores by 2023, a Bank of America Merrill Lynch research said on Tuesday.

One of the most interesting trends in retail sector in India is that kirana stores are keen to upgrade their merchant point-of-sale (MPoS) technology, which is driving a wave of modernisation (90 per cent of the $700 billion retail market is still unorganized).

“The current one-time price point of Rs 50,000 limits the market to Class A/B stores (turnover of Rs 900K+/month).

“We believe that with the RIL’s entry, we could see an increase in merchant adoptability, as the price points will likely come down (RIL’s current one-time deposit is Rs 3,000) and reach should expand,” the research noted.

As a big player, RIL is entering an otherwise scattered market. Some of the key players in the fragmented merchant point-of-sale (MPoS) today are SnapBizz, Nukkad Shops and GoFrugal.

“Overall, we expect RIL to help expand the current 15,000 digitized store base to over 5 million stores by 2023,” said Sachin Salgaonkar and Sukriti Bansal, Research Analysts at DSP Merrill Lynch (India).

In this photograph taken on June 6, 2013 Reliance Industries Chairman Mukesh Ambani poses as he arrives for the company’s annual general meeting in Mumbai. India’s 100 richest people are for the first time all billionaires, according to an annual Forbes survey released September 25, 2014, with the country’s top earners worth a third more combined than last year. Industrialist Mukesh Ambani topped the list for an eighth straight year with a 23.6-billion dollar fortune, Forbes India said on its website. AFP PHOTO/Indranil MUKHERJEE/FILES

For the research, the team met with the SnapBizz management which has over 4,500 devices installed in more than seven cities in India (or over 30 per cent of the digitized store base).

For a one-time payment of Rs 50,000, the merchant gets a PoS device with Snapbizz software, a screen space to display ads and a personal app to interact with users.

On back of these products, the retailers’ revenue is estimated to increase by Rs 8,250 month each, thus recovering the investment in six months.

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“Kirana stores liked the ease of billing/generating GST complaint bills the best. The PoS system provides an option of adding in-built discounts and also push offers to entire customer database via SMS,” the research noted.

Reliance, with a deep footprint in over 10,000 Reliance Retail outlets pan-India, is working on to create the world’s largest online-to-offline new ecommerce platform. (IANS)

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Fresh Telecom War between Reliance Jio and Older Operators, Airtel and Vodafone-Idea

One of our competitors has imposed a rate of 6 paise for all off net calls made to other operators to cover the termination charge

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Telecom, War, Reliance
Telecom Regulatory Authority of India (Trai) Chairman R.S. Sharma did not respond to calls for queries on Jio' s contention that it has been forced to take the step due regulatory undertainty created by Trai issuing a consultation paper to review whether the regime timeline needs. Flickr

A fresh telecom war between Reliance Jio and older operators — Airtel and Vodafone-Idea — erupted on Wednesday after the Mukesh Ambani-led Jio said it would charge 6 paise per minute for making calls to other networks, even as Airtel described it as pressure tactics by Jio to reduce interconnection charges.

On account of taking a hit of Rs 13,500 crore due to network connection charges, or interconnet usage charges (IUC), Reliance Jio on Wednesday said it will charge customers 6 paise per minute for voice calls made to rival networks till IUC charges are eliminated. This is the first time that Jio users will pay for voice calls which has been free so far since September 2016.

Telecom Regulatory Authority of India (Trai) Chairman R.S. Sharma did not respond to calls for queries on Jio’ s contention that it has been forced to take the step due regulatory undertainty created by Trai issuing a consultation paper to review whether the regime timeline needs to be extended.

In a statement here, Airtel said: “One of our competitors has imposed a rate of 6 paise for all off net calls made to other operators to cover the termination charge of Interconnect Usage Charge (IUC). They have gone on to suggest that Trai has re-opened this issue”.

Telecom, War, Reliance
On account of taking a hit of Rs 13,500 crore due to network connection charges, or interconnet usage charges (IUC), Reliance Jio on Wednesday said it will charge customers 6 paise per minute for voice calls made to rival networks till IUC charges are eliminated. Flickr

“On 19th September, 2017, when Trai reduced the IUC from 14 paise to 6 paise and proposed a move towards Bill and Keep (zero IUC) with effect from January 1, 2020, they had specifically mentioned that the Authority shall keep a close watch on developments in the sector, particularly with respect to the adoption of new technologies and their impact on termination cost.

“The Authority, if deems it necessary may revisit the scheme of Termination charge applicable on Wireless-to-Wireless calls after one year from the implementation of the regulation”, the statement said.

Trai had, in 2017, slashed the IUC to 6 paise per minute from 14 paise, and had said that the regime would end by January 2020. Last month, however, Trai weighed the option of deferring the date for scrapping IUC.

The regulator a floated a fresh consultation paper to see if there is a need to revise the applicable date for scrapping the IUC, given the continuing imbalance in inter-operator traffic.

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The paper also sought to discuss with stakeholders what parameters should be considered to decide on an alternate date, if any. At the time Trai decided to scrap the IUC, Airtel, Vodafone and Idea had resisted the change, while Jio was in favour.

Jio said that the possible change of timeline for eliminating IUC, has led to uncetainity about the IUC phase-out deadline and it cannot continue to be at a loss of Rs 13,500 crore on acocunt of IUC by offering free voice calls to rivals’ networks from its own.

“The consultation paper has created regulatory uncertainty and therefore Jio has been compelled, most reluctantly and unavoidably, to recover this regulatory charge of 6 paise per minute for all off-net mobile voice calls so long as IUC charges exist,” the Jio statement said.

Trai’s aim was to evaluate two factors – the adoption of VoLTE, which TRAI assumed would bring the cost down and that the growth of smaller-sized operators would result in symmetry of traffic would ensue. Both these factors have not materialised.

Telecom, War, Reliance
This is the first time that Jio users will pay for voice calls which has been free so far since September 2016. Pixabay

There are still over 400 million 2G customers from the poorest sections of society living in rural areas paying less than Rs 50 per month who still cannot afford to buy a 4G device. Second, there is still significant asymmetry of traffic.

Accordingly, Trai issued a consultation paper in September 2019 to reassess the timeline of the shift from 6 paise to a zero charge.

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The telecom industry is in a state of deep financial stress since the last three years with several operators having gone bankrupt and thousands of jobs lost. Given the massive 2G customer base in India the cost of the call at 6 paise is already significantly below the real cost of the call. (IANS)