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Reliance Retail to benefit from JD’s evolution into a super app
- The acquisition will allow RRVL to leverage JD’s database of 30.4 mn business listings
- Mukesh Ambani had laid out RIL’s goal of on-boarding 10 mn merchant partners for its new commerce biz. This acquisition aids that target
Reliance Retail Ventures Ltd’s (RRVL) acquisition of a controlling stake in business-to-business (B2B) search engine Just Dial (JD) will provide RRVL with access to a large merchant base for its new commerce platform JioMart, analysts said.
The move will also allow the retail company to harness JD’s evolution into a super app that will help book flight, train and bus tickets, cabs and hotel rooms and pay bills, as well as provide other services, they said.
Reliance Industries Ltd (RIL) chairman and managing director Mukesh Ambani had laid out RIL’s target of on-boarding 10 million merchant partners for its new commerce initiative over the next three years, at its annual general meeting last month. The acquisition of JD aids that target.
RRVL, a wholly owned subsidiary of RIL, had last week acquired a controlling stake of 40.95% in JD—25.3% stake through a preferential allotment and 15.6% stake from founder V.S.S. Mani. This had triggered a mandatory open offer in accordance with takeover regulations to acquire up to 26% stake.
The final acquisition cost for a 66.95% stake would be around ₹5,720 crore.
The acquisition will allow RRVL to leverage JD’s database of 30.4 million business listings and its consumer traffic of 129.1 million quarterly unique users as on 31 March 2021.
JD’s B2B platform, JD Mart, matches wholesalers and manufacturers with retailers and industrial buyers, according to Credit Suisse.
It accounts for 7-8 million out of the current more than 30 million listings. JD operates it on a marketplace model and offers services such payment solutions, logistics, chat and catalogue management. In addition, small and medium enterprises (SMEs) can get insurance and working capital loans.
The large visitor base helps JD source advertising from suppliers.
It has an advertising-based revenue model, under which advertisers pay a fixed fee to run search-led advertising campaigns. The fee can be paid either upfront or through monthly payment plans.
Advertisers get preferential placement in search results. In addition, consumer preference is influenced by ratings and reviews.
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First Published:19 Jul 2021, 07:48 PM IST
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