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May 28, 2024

Adani Group Ventures into India’s Digital Payment and E-Commerce Markets

The Adani Group is making strategic moves to enter India’s rapidly growing digital payments and e-commerce sectors. According to a report by The Financial Times, the conglomerate is considering applying for a license to operate on India’s public digital payments network and is in talks with banks to launch a co-branded credit card.

This expansion marks a significant diversification for the Adani Group, led by billionaire Gautam Adani. The group is set to join India’s Unified Payments Interface (UPI) network, a system that has revolutionized digital transactions in the country. In addition, Adani is negotiating to offer online shopping through the Open Network for Digital Commerce (ONDC), a government-backed initiative designed to streamline e-commerce activities.

These ventures are part of a broader strategy to establish a robust digital business capable of competing with established giants like Google and Mukesh Ambani’s Reliance Industries. The new services will be integrated into the group’s consumer app, Adani One, which launched in late 2022. Initially offering travel services such as flight and hotel bookings, Adani One is poised to expand its offerings significantly.

Adani’s push into consumer-facing businesses comes at a pivotal time for the group. Last year, the company faced significant challenges following allegations of market manipulation and fraud by US-based Hindenburg Research. These allegations led to a sharp decline in the company’s stock value and increased scrutiny from political adversaries. However, Adani Enterprises’ shares have since rebounded, recovering much of the lost ground.

Further complicating matters, the world’s largest sovereign wealth fund, Government Pension Fund Global (GPFG) of Norway, recently decided to exclude Adani Group’s port arm from its investment portfolio. The exclusion was based on ethical considerations, particularly concerning the sale of Adani’s port in Myanmar and the company’s perceived lack of transparency.

Despite these setbacks, the Adani Group continues to pursue new opportunities aggressively. Digital payments are the latest in a series of strategic acquisitions and market entries. In 2022, the group acquired the popular broadcaster NDTV, followed by the acquisition of BQ Prime (renamed NDTV Profit) the next year. These media acquisitions complement the group’s broader digital strategy.

The Adani Group also plans to establish a think tank focusing on climate change, energy, and politics, underscoring its commitment to addressing global challenges while expanding its business interests.

One of the group’s key strategies is leveraging its extensive existing customer base, which includes gas and electricity users and airport travelers. By creating a seamless ecosystem, Adani aims to encourage customer loyalty and engagement. For example, users could earn loyalty points through bill payments or duty-free purchases, which they could then redeem for online shopping. This approach is designed to integrate the group’s diverse business interests and capitalize on its large customer base to gain a foothold in the competitive digital payments and e-commerce markets.

Although the Adani Group has yet to make an official announcement regarding its foray into digital payments, the planned initiatives signal a significant shift towards consumer-centric services. This move not only aligns with the group’s diversification goals but also positions it as a formidable player in India’s burgeoning digital economy.

In conclusion, the Adani Group’s entry into digital payments and e-commerce represents a bold step in its ongoing transformation. By tapping into these fast-growing markets, the group aims to build a comprehensive digital business that can stand shoulder to shoulder with the industry’s heavyweights. Despite past controversies and challenges, the Adani Group continues to innovate and expand, driven by a vision of creating a seamless, integrated digital experience for its customers.

Jhumpa Lahiri

Jhumpa Lahiri

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