8 COVER STORY Reliance Industries Strikes Back Energy and the majority of the nation’s retail sector by linking petrochemicals producers, traders, small merchants, consumer conglomerate brands and consumers. Reliance Indus- tries, India’s most In an interview with The Innovator, John Cham- valuable com- bers, the former CEO and Chairman of Cisco pany by market Systems, who is now working closely with Indian revenue, has Prime Minister Narendra Modi on the country’s created a plat- digitalization, says Reliance Industries is well-posi- form for all of its tioned to succeed with its new digital platform digital businesses «Ambani has built out the most advanced architec- in order to better ture in the world for digitization, says Chambers. combat interlo- “He clearly got it. [He saw that] voice will be free, embed their financial services within other platforms – es- top management in place to enable them to adapt quickly pers for control of the Indian market. then data will be free and then video will be free. sentially a new approach to distribution. Then, banks need to disruptive innovations—whether it means to collaborate “This new Company will be a truly transformatio- He kept ahead of those trends and all the competi- to create much more vibrant marketplaces for banking and or compete with, or even undermine, new entrants.” nal and disruptive digital services platform,” tors not willing to take the huge risk that he took. Mukesh Ambani, Reliance Industries’ Chairman He spent billions and billions of dollars of equip- non-banking services, to help retain customers by adding and Managing Director, said in a press statement ment and now he is the leader in this market with more value. The third step to create new platform-based announcing the unit’s launch. “It will bring together the best network in the world, much more complex ventures in ‘white space’ areas beyond banking. “This Success Factors India’s number one connectivity platform, leading and capable than the U.S. networks are.» is about accessing new customers in new ways,” says digital app ecosystem and world’s best tech capa- Torrance. “If you can connect the dots between all three Established companies in theory have the resources, the bilities.” Reliance Industries is credited with having Chambers predicts that Ambani will test the new parts, then you can leverage much more data, play a might and access to the customers but what keeps them transformed the digital eco-system in India, cata- technology transitions and leverage those. «He will stronger role in the digital economy, and create a path to back is their culture and lack of customer orientation, pulting the country from 155th rank in broadband do it in an ecosystem environment where he brings RoE growth and shareholder value.” says Michael Jacobides, the Sir Donald Gordon Chair of penetration to the first rank in mobile data together the small companies, to compete against Sberbank is one of a relatively few banks that have de- Entrepreneurship & Innovation at London Business School, consumption within a span of less than three years the big companies, and enable them in ways that by building out a high-speed fiber optic network others can not,» says Chambers. He takes risks, cided to invest wholeheartedly in a dynamic platform and where he is Professor of Strategy. “They are more focused and slashing prices on data plans. It is the second again and again and again. He’s done the same ecosystem approach (see the story) “It’s a good example on functioning product lines which makes them less largest singlecountry operator globally and says it thing in the petrochemical market. So, if you look of integrating bold platform thinking into an overall well suited to seize opportunities that are based on real is trending towards half a billion customers, with at Reliance, they’ve reinvented themselves on so growth strategy,” says Torrance. “Sberbank is already one customer needs. There is nothing in terms of business cal- net additions of 8 million to 10 million per month. many fronts, and out of all the companies in Asia, of the best RoE performers in the world, but they are not culus that keeps them back. It is their inability to see the Ambani said the new spin-out, Jio Platforms, I’d put them at the very top in terms of reinventing complacent. They have anticipated the threats of disinter- opportunities and even more so their inability to mount an will roll-in the Jio Infocomm infrastructure and themselves.» Chambers says he thinks Ambani is mediation and are now executing at pace a platform-ins- effective response and to put into place the right organiza- focus on digital services in healthcare, education, brave for going up against the biggest technology pired business model renewal.” tional structure to make sure that it happens.” agriculture, commerce, government-to-citizen challengers while taking on the traditional players. services, gaming and manufacturing sector among «I think he is a great example,» says Chambers. others... The more successful ecosystems are orchestrated by an «It starts with a leader, a clear vision, using techno- Stepping Up The Pace established market share leader, says Jacobides. These Part of the plan is to win market share in India’s logy, getting the transitions right, understanding leaders are best positioned to attract partners with the burgeoning e-commerce sector. To that end, the trends that will occur, and that changes the But all too often incumbents from banking, transport and right skills and funding. The idea of starting a digital Reliance Industries has started testing its online game. That’s how you gain market share. There is retail sectors have been too slow to act. Some have even ecosystem might seem strange to some large incumbent shopping portal, JioMart, to challenge e-com- no incremental thinking here. This is all out-of-the allowed new entrants to take the driver seat, with their players, who are used to going it alone but it’s better for merce giant Amazon and Walmart’s Flipkart Online box, exponential thinking. This is all disruptive.» support. “Incumbents were well aware of disruptive them to try and shape the new digital landscape, he says, Services. Reliance Retail serves more than 3.5 innovations introduced by startups early on when these especially if they have advantages that rivals just can’t million customers each week through its nearly J.L.S. upstarts were just emerging in the industry and had a low match, most notably a strong user base. Research Jaco- 10,000 physical stores in more than 6,500 Indian cities and towns. JioMart, plans to offer more than market valuation,” says Teng, referring to her research at bides conducted with consultancy BCG shows that 83% of 50,000 grocery products and free home delivery. the London Business School and University of Oxford. “By digital ecosystems involve partners from more than three Ambani said his goal is to “completely transform” the time the incumbents decided to invest in these inno- industries and 53% from more than five. The research India’s mom-and-pop stores which account for vative startups several years later, they had to pay a steep showed that the more partners an ecosystem has, and the premium for partnering with startups that had become more industries they come from, the better that ecosystem unicorns. will fare. While the average ecosystem has 27 partners, The lesson here is that incumbents should be prepared to the most successful digital ecosystems have about 40, have the right organizational structure and support from according to their research. The most successful also cut