Ambani Jr has retail on mobile in mind

Even as Mukesh Ambani's retail plans face ground-level opposition in a few states, the Reliance Anil Dhirubhai Ambani group has drawn up plans to foray into multi-product retailing using its mobile phone network.

Branded Mobi-Retail, this service will be offered to the 35 million subscribers of Reliance Communications, who will be able to use their handsets to buy over 100,000 products ranging from fresh vegetables to groceries, readymade garments, toys and electronics.

The consumer can either take home delivery or pick up products from a delivery point. The group will leverage over 300,000 outlets in 10,000 towns in formats like Reliance World, Reliance World Express, Reliance Money, Reliance Insurance, Big Flicks, and Adlabs as the delivery points.

The group has already set up a crack team of executives and, according to sources familiar with the development, hopes to roll out some time in the first quarter of 2008.

A Reliance Communications spokesperson, however, declined to comment. This could be yet another instance of the two Ambani brothers clashing for the same business.

In the first phase, Mobi-Retail will be launched in 1,000-1,200 towns across the country. The group has targeted a turnover of over Rs 4,000 crore from this venture in the first year itself.

Reliance Communications is working on creating an easy menu on the phone (for both CDMA and GSM customers) and has already started initial testing of formats like Mobi-HyperMall (in this menu, all the products can be assessed), Mobi-Mall (smaller than a hyper market), Mobi-Store (for products that can be bought in neighbourhood stores), Mobi-Fresh (vegetables), Mobi-Groc (groceries) and Mobi-Express (products that are needed regularly).

"Multi-store menus are essential as all mobile screens cannot show all the 100,000 products. The smaller store menus which have smaller number of products would fit into lower-end phone models," said a source. The company is eyeing over 10 million square feet of mobile screen space.

The investment needed for such a format of retailing could be 80 per cent lower than a brick and mortar retailing model. As a result, net margins are expected to be much higher in such a model.

The company has already started talks with suppliers to create a pan-Indian vendor base. However, the downside is that consumers will not get a "shopping experience" which is attached to a brick-and-mortar retailer.