Reliance Industries chairman Mukesh Ambani calls data the 'new oil' and has warned of 'data colonization' by overseas firms in India. (Pradeep Gaur/Mint)
Reliance Industries chairman Mukesh Ambani calls data the 'new oil' and has warned of 'data colonization' by overseas firms in India. (Pradeep Gaur/Mint)

Mukesh Ambani's Reliance e-commerce plan runs into a data privacy wall

  • Reliance Jio and Reliance Retail can't share data due to data privacy rules, says Reliance Retail CFO Ashwin Khasgiwala
  • Reliance e-commerce venture pits Mukesh Ambani squarely against Jeff Bezos' Amazon and Walmart's Flipkart in India

Mumbai: There’s a wrinkle in plans made by Asia's richest man and Reliance Industries Ltd (RIL) chairman Mukesh Ambani to take on Jeff Bezos' Amazon.com Inc. and Walmart Inc.'s Flipkart on his home turf of India: his telecom and retail businesses—Reliance Jio Infocomm Ltd and Reliance Retail, respectively—can’t share data.

Ambani has outlined how he will marry the might of his group’s 9,900-plus retail stores and 280-million strong telecom user base to bolster his Reliance e-commerce venture.

A senior Reliance executive says that any data sharing on customers between the two, could run into a legal wall. “They are different companies so there are data privacy rules," Ashwin Khasgiwala, Reliance Retail Ltd’s chief financial officer said at a conference in Mumbai on Tuesday. “They’re different platforms," he said while declining to elaborate on how the group plans to overcome it.

While Reliance Industries' brick-and-mortar retail businesses are housed in Reliance Retail, the telecom operations are in a separate legal entity Reliance Jio.

Legal hurdles in sharing information can stymie a variety of lucrative uses of that data to sell more products to customers.

Ambani, who calls data the "new oil" and has warned of "data colonization" by overseas firms in India, can potentially find workarounds for the legal snarl. One option would be to merge the two Reliance units.

Data sharing between “two legal entities is going to be very difficult," said Abheek Singhi, head of Boston Consulting Group’s consumer practice in India. “My view would be at some point in time, at least from a legal entity perspective, it will come together."

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