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The problem is not with these salesmen. With Reliance becoming the single point aggregator for all products sold from these 450,000+ stores, Reliance also becom

The problem is not with these salesmen. With Reliance becoming the single point aggregator for all products sold from these 450,000+ stores, Reliance also becomes the single point of contact for any manufacturer wanting to distribute their products via these stores. If not a single point, it will at least bring down the number of institutional distributors to just 2 or 3 major distributors. That presents huge leverage for Reliance and they will be able to dictate purchase prices from manufacturers and also pricing/credit terms which will be extremely one-sided in favour of Reliance. This will be extremely anti-competitive and will be a death knell to many companies. This is similar to Amazon/Apple getting monopoly on music/books/video etc.

jeswin 5y ago
It's good for the 12 million kirana stores in India, who are concerned about Amazon, Walmart's FlipKart, BigBasket, Dunzo et al eating their business - which is happening already in metros. Reliance is bringing these stores into the game (in which, so far they've had no say) by working with them for order fulfilment. > This will be extremely anti-competitive and will be a death knell to many companies. How is it anti-competitive? A more efficient process might well be the death knell for many companies, but that doesn't mean it's anti-competitive. Add: I think you meant Reliance is going to squeeze the manufacturers - which puts them out of business. What would Reliance gain from it? If they want to be a successful middleman, their best bet is to make both sides happy.
- kamaal 5y ago
  >>by working with them for order fulfilment. Actually most people's time is cheap, so eventually people won't be ok with paying delivery fees, but just walking up to the local super market and buying things from there, so the real fear here the Kiranas will be out of business soon. >>How is it anti-competitive? A more efficient process might well be the death knell for many companies, but that doesn't mean it's anti-competitive. I think it means they are worried it will disrupt the status quo in a way they don't like, that's it.
  - jeswin 5y ago
    > Actually most people's time is cheap, so eventually people won't be ok with paying delivery fees But it would work backwards too. India's able to do super low cost delivery because labor (for delivery) is cheap. A delivery person working for Amazon makes $140 a month - and there's plenty of labor supply. Kirana stores also have delivery, they're paid $100-120 a month. This is not going to change any time soon. They do 30 deliveries a day, so the costs are very minimal.
    - kamaal 5y ago
      Depends on the target buyers, if you are a big township/apartment resident, who works a 9 - 9 job, and don't like walking to the nearest kirana for stuff, you will be happy paying for it. But the vast majority of the buyers, including me(though my time is not cheap), I still prefer spending a weekend afternoon shopping. This includes lots of middle class to lower middle class people whose time is cheap, and its definitely not worth for these people to pay local kiranas for incremental delivery. As a matter of fact this is precisely the kind of crowd that shops at DMart today. These people don't like paying Flipkart delivery fees for grocery delivery. >>This is not going to change any time soon. It will be forced to change, if the masses shop personally and don't like paying delivery fees, the delivery services are just bespoke lifestyle perks for which you pay premium, not saying that won't happen, but eventually its just a thing you are willing to pay for and others aren't. If you walk into a DMart today, it has all the markings of a standard US county Costco. They have cheap food products(wheat flour, rice, other food stuff at almost 30% discount), they have super cheap clothes, shoes, and other home accessories/appliances and all. When you finish shopping they also sell cheap softy ice cream and pop corn as a cooling off experience.
      - jeswin 5y ago
        > It will be forced to change, if the masses shop personally and don't like paying delivery fees The masses mostly just shop personally; delivery is the new thing (the change). Delivery volumes are small as of now, and can only increase. The problem (according to a lady who helps with our cooking) is not that delivery is expensive, it is that BigBasket prices are higher than local prices. But BigBasket will eventually figure out how to bring prices down. If you're suggesting that volumes are going to top out soon, I disagree. Smartphones have made it easier for people to order stuff, and hundreds of millions of people from various economic backgrounds are comfortable using them. India's large enough for the trend to continue for a very long time.
- throwaway59553 5y ago
  >How is it anti-competitive? A mega-corp effectively putting hundreds of small distributors out of business, dictating the prices that producers should sell their products, gaining a monopoly, which also opens the door for them to become the producers themselves. This also makes Indian wealth even more concentrated. Do you need a drawing?
- roenxi 5y ago
  > What would Reliance gain from it? If they want to be a successful middleman, their best bet is to make both sides happy. If prices go down, they sell more stuff. Speaking from the Australian perspective we have a couple of large monopsony retailers (Coles, Woolworths) who brutal squeeze a lot of producers and keep prices way down. It is very funny, you get crowds of grumpy farmers complaining that the price of milk is too low, and lots of politicians wagging their chins at the horror of it all. Then carefully not doing anything because if they manage to drive the price of milk up they will lose a lot of elections. It is great for consumers.
- pkphilip 5y ago
  "How is it anti-competitive"? The best example is to see what has happened with music/video/book sales on Apple, Amazon, Netflix etc. These three companies have such a stranglehold on this industry that it is impossible for any artist to have any say on pricing/margins etc. As an artist, if your product doesn't appear on any of these channels, you are basically dead on the water.
  - lotsofpulp 5y ago
    Spotify, Google, Tidal, HBO, Disney, Paramount, Comcast, etc. all exist and compete with those 3. In addition, an artist can create something and sell it on their own website. The artist (or content owner) has never had such an easy time getting access and collecting payment from the world’s population in all of history. Or sell it via Amazon or Apple. I am pretty sure Apple lets content owners set the sale price.
Angostura 5y ago
Is there any particular reason why another competitor couldn't do the same if Reliance became exploitative and lazy?
- pkphilip 5y ago
  Size and access to capital. Reliance has 100s of billions that they can invest into this - and they get this capital at a cost which is below what almost any other company can get it at. Plus they have enormous leverage with the government and also a huge network of stores.
lotsofpulp 5y ago
> Reliance also becomes the single point of contact for any manufacturer wanting to distribute their products via these stores. The manufacturers should be able to look up contact details for the shops via the internet. Assuming India does not let Reliance remove those contact details from the internet.
- pkphilip 5y ago
  The whole point is that retailers are now refusing to buy from manufacturers and are preferring to go directly through Reliance because Reliance will bring products from different manufacturers and across categories.
  - deleted 5y ago
    [deleted]
  - lotsofpulp 5y ago
    Manufacturers are free to sell directly to retailers at the same price they sell to Reliance. Then retailers would have no reason to go to Reliance.
    - pkphilip 5y ago
      Retailers will still not buy directly from manufacturers because they can buy things from multiple manufacturers in a single shipment from Reliance instead of dealing with individual manufacturers and incurring transportation costs per manufacturer. That apart, Reliance will extend offers to retailers based on the overall value of the order - rather than per manufacturer. This is the same reason people buy a range of items from sites like Amazon while they could buy individual items directly from some sites which deals with only specific product categories.
      - lotsofpulp 5y ago
        So Reliance is providing a valuable service or product? I am failing to see the problem. If the concern is Reliance is the only one, then they might need to be broken up into multiple logistics operations. But overall, increased in efficiency and communications should result in fewer and fewer middlemen.

jeswin 5y ago

It's good for the 12 million kirana stores in India, who are concerned about Amazon, Walmart's FlipKart, BigBasket, Dunzo et al eating their business - which is happening already in metros. Reliance is bringing these stores into the game (in which, so far they've had no say) by working with them for order fulfilment. > This will be extremely anti-competitive and will be a death knell to many companies. How is it anti-competitive? A more efficient process might well be the death knell for many companies, but that doesn't mean it's anti-competitive. Add: I think you meant Reliance is going to squeeze the manufacturers - which puts them out of business. What would Reliance gain from it? If they want to be a successful middleman, their best bet is to make both sides happy.

kamaal 5y ago
>>by working with them for order fulfilment. Actually most people's time is cheap, so eventually people won't be ok with paying delivery fees, but just walking up to the local super market and buying things from there, so the real fear here the Kiranas will be out of business soon. >>How is it anti-competitive? A more efficient process might well be the death knell for many companies, but that doesn't mean it's anti-competitive. I think it means they are worried it will disrupt the status quo in a way they don't like, that's it.
- jeswin 5y ago
  > Actually most people's time is cheap, so eventually people won't be ok with paying delivery fees But it would work backwards too. India's able to do super low cost delivery because labor (for delivery) is cheap. A delivery person working for Amazon makes $140 a month - and there's plenty of labor supply. Kirana stores also have delivery, they're paid $100-120 a month. This is not going to change any time soon. They do 30 deliveries a day, so the costs are very minimal.
  - kamaal 5y ago
    Depends on the target buyers, if you are a big township/apartment resident, who works a 9 - 9 job, and don't like walking to the nearest kirana for stuff, you will be happy paying for it. But the vast majority of the buyers, including me(though my time is not cheap), I still prefer spending a weekend afternoon shopping. This includes lots of middle class to lower middle class people whose time is cheap, and its definitely not worth for these people to pay local kiranas for incremental delivery. As a matter of fact this is precisely the kind of crowd that shops at DMart today. These people don't like paying Flipkart delivery fees for grocery delivery. >>This is not going to change any time soon. It will be forced to change, if the masses shop personally and don't like paying delivery fees, the delivery services are just bespoke lifestyle perks for which you pay premium, not saying that won't happen, but eventually its just a thing you are willing to pay for and others aren't. If you walk into a DMart today, it has all the markings of a standard US county Costco. They have cheap food products(wheat flour, rice, other food stuff at almost 30% discount), they have super cheap clothes, shoes, and other home accessories/appliances and all. When you finish shopping they also sell cheap softy ice cream and pop corn as a cooling off experience.
    - jeswin 5y ago
      > It will be forced to change, if the masses shop personally and don't like paying delivery fees The masses mostly just shop personally; delivery is the new thing (the change). Delivery volumes are small as of now, and can only increase. The problem (according to a lady who helps with our cooking) is not that delivery is expensive, it is that BigBasket prices are higher than local prices. But BigBasket will eventually figure out how to bring prices down. If you're suggesting that volumes are going to top out soon, I disagree. Smartphones have made it easier for people to order stuff, and hundreds of millions of people from various economic backgrounds are comfortable using them. India's large enough for the trend to continue for a very long time.
throwaway59553 5y ago
>How is it anti-competitive? A mega-corp effectively putting hundreds of small distributors out of business, dictating the prices that producers should sell their products, gaining a monopoly, which also opens the door for them to become the producers themselves. This also makes Indian wealth even more concentrated. Do you need a drawing?
roenxi 5y ago
> What would Reliance gain from it? If they want to be a successful middleman, their best bet is to make both sides happy. If prices go down, they sell more stuff. Speaking from the Australian perspective we have a couple of large monopsony retailers (Coles, Woolworths) who brutal squeeze a lot of producers and keep prices way down. It is very funny, you get crowds of grumpy farmers complaining that the price of milk is too low, and lots of politicians wagging their chins at the horror of it all. Then carefully not doing anything because if they manage to drive the price of milk up they will lose a lot of elections. It is great for consumers.
pkphilip 5y ago
"How is it anti-competitive"? The best example is to see what has happened with music/video/book sales on Apple, Amazon, Netflix etc. These three companies have such a stranglehold on this industry that it is impossible for any artist to have any say on pricing/margins etc. As an artist, if your product doesn't appear on any of these channels, you are basically dead on the water.
- lotsofpulp 5y ago
  Spotify, Google, Tidal, HBO, Disney, Paramount, Comcast, etc. all exist and compete with those 3. In addition, an artist can create something and sell it on their own website. The artist (or content owner) has never had such an easy time getting access and collecting payment from the world’s population in all of history. Or sell it via Amazon or Apple. I am pretty sure Apple lets content owners set the sale price.

Angostura 5y ago

Is there any particular reason why another competitor couldn't do the same if Reliance became exploitative and lazy?

pkphilip 5y ago
Size and access to capital. Reliance has 100s of billions that they can invest into this - and they get this capital at a cost which is below what almost any other company can get it at. Plus they have enormous leverage with the government and also a huge network of stores.

lotsofpulp 5y ago

> Reliance also becomes the single point of contact for any manufacturer wanting to distribute their products via these stores. The manufacturers should be able to look up contact details for the shops via the internet. Assuming India does not let Reliance remove those contact details from the internet.

pkphilip 5y ago
The whole point is that retailers are now refusing to buy from manufacturers and are preferring to go directly through Reliance because Reliance will bring products from different manufacturers and across categories.
- deleted 5y ago
  [deleted]
- lotsofpulp 5y ago
  Manufacturers are free to sell directly to retailers at the same price they sell to Reliance. Then retailers would have no reason to go to Reliance.
  - pkphilip 5y ago
    Retailers will still not buy directly from manufacturers because they can buy things from multiple manufacturers in a single shipment from Reliance instead of dealing with individual manufacturers and incurring transportation costs per manufacturer. That apart, Reliance will extend offers to retailers based on the overall value of the order - rather than per manufacturer. This is the same reason people buy a range of items from sites like Amazon while they could buy individual items directly from some sites which deals with only specific product categories.
    - lotsofpulp 5y ago
      So Reliance is providing a valuable service or product? I am failing to see the problem. If the concern is Reliance is the only one, then they might need to be broken up into multiple logistics operations. But overall, increased in efficiency and communications should result in fewer and fewer middlemen.