Daybreak - Does Reliance really know what it wants from e-commerce?

Episode Date: July 6, 2025

Ajio was supposed to be Reliance Retail’s e-commerce success story. While other digital bets like Jiomart, Dunzo, and Urban Ladder struggled to find their footing, Ajio surged ahead powered by aggressive discounts, brand partnerships, and the deep pockets of India’s largest retailer.But behind the scenes, the momentum was already beginning to crack.Today, we go inside the fashion platform’s sharp pivot. Over the past year, Ajio has gone through major leadership reshuffles, mass layoffs, and shifting strategies—from launching ultra-fast delivery to pushing premium fashion, only to walk parts of it back. And as profitability pressure mounts from the top, teams are left scrambling to do more with less.Tune in.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. It's one thing to work in a company that is struggling.

But it's quite another to be in one way nobody knows what the company actually wants to be. At Agio, the fashion e-commerce arm of reliance retail, that uncertainty has become the norm. Former employees describe a place where job roles are blurred, expectations keep shifting, and direction from leadership changes depending on the quarter. You could keep your job if you just looked busy. Targets did not matter as much as optics.

But AGO had once been reliance's most promising bet in the online commerce space. Its discount-led model, powered by the might of India's largest retail group made it a legitimate rival to Mintra, and it grew fast. Customers noticed and competitors scrambled. Strategy started zigzagging and layoff swept through the company. Former team members talk about last-minute pivots, product launches that did not last, and leadership that did not seem to know what to focus on. Premium customers, budget buyers, delivery speed, luxury tie-ups, everything was on the table and nothing stuck. This is the story of a platform caught between ambition and execution.

Of a team trying to deliver results with shrinking budgets and mixed signals. And of a company, which is Reliance Retail, trying to rewrite its digital playbook after multiple bets went sideways. So, the question now isn't just what happened to Agio. It is much bigger. It is, does Reliance really know what it wants from e-commerce? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Da Sharma, and I don't chase the news cycle.

Instead, every day of the week, my colleague Rahal Philipos and I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 7th of July. When you look at Agio today, it is hard to ignore the chaos that is existing behind the scenes. Let's go back to early 2023. Agio was still looking promising. sales had grown rapidly during the pandemic and it was Reliance Retail's online fashion hope. There wasn't much pressure to perform as long as employees looked busy. But then came cost-cutting.

Layoff slashed Agio's workforce by as much as 30%, part of Reliance's goal to reduce 38,000 jobs across the board. Managers say that there had been too much hiring before and now it was a sharp and sudden correction. At the same time, AGIO was trying, unsuccessfully, to also reinvent itself. A 4-hour delivery service called AGO Priority launched in Feb, 24, only to be rolled back shortly after. Meanwhile, rival Mintra was thriving, delivering fashion in just 30 minutes and finally turning a profit of 31 crore rupees in FY 2025 in FY 2024, which, by the way, was a massive turnaround from a 782 crore loss, the year before that. Agio was not even close.

Revenues were growing but profits stayed out of reach. Attempts to improve customer experience fizzled and internally, things were quite shaky. Layoffs weren't just from the top down. They were also triggered by the growing confusion within teams. You see, it was Agio's identity that was unclear. What exactly was it offering that Mintra or others were not? One former manager actually put it quite plainly. He said, all we had was lower prices, and that was not enough anymore.

Meanwhile, reliance was also under pressure. The valuation of its retail arm had dropped from over $100 billion to just $50 billion in three years. And its physical stores, now which are 18,000 strong, still drove profits, but online ventures were burning cash. Even Geo Mart, with all its backing, was averaging only $3,000. a day in sales. As one insider put it and I'm quoting,

Adju is the only one even holding up. And that is saying something. More on this in the next segment. But before that, my colleague Rahel has a quick message for you. Hi, this is Rahel, the co-host of Daybreak. I'm quickly pausing this episode to share something very exciting with you. We are hiring. We are looking for someone in the early stages of their journalism career,

maybe or fresh out of journalism school, or you've done a couple internships and projects and are eager to take on your first full-time role in audio. I'm looking for a co-host to help launch a brand new podcast from the Ken. This is a full-time role and you'll get to work closely with me as well as the rest of the audio team right from story pitches to interviews to shaping how the final show sounds. If you're curious, ambitious and absolutely love audio storytelling, we would love to hear from you. All the details will be in the show notes of the show notes of it. this episode.

Peter Rajesh Narkar in October 2023. He is a Mintra veteran and he joined AGO as a chief merchandising officer with one goal. Make AGO profitable. And his first move was obviously to cut spending, especially on marketing. Budgets were slashed across departments and one team saw its marketing spend drop from nearly 20% to 10% of segment revenue. And that hurt new customer acquisition. But Narkar was not aiming for growth anymore.

He was aiming for margins. His second move was to reposition AGO. Instead of completely purely relying on discounts, he wanted the platform to lean into AGO Lux and AGO Gold, highlighting premium and luxury brands. Because, after all, Reliance had those partnerships already. Why not use them? And it started to show the platform's average selling price jumped from $600 to $700 to $700,000,

to over 1,000. But it came at a cost. Shoppers who came for deals just left because daily orders dropped from 250,000 to around 130,000, only recovering partially in the following months. But behind the scenes, operational reforms were also underway. Agio moved from the costly sell-or-return model where it held unsold inventory and shifted to drop shipping, which freed up capital. A tighter return policy also helped.

Return rates dropped from 35% to 29%. By March 2025, Reliance Retail posted a revenue of 2.9 lakh crore rupees and profits of over 12,000 crores, which was a 12% rise. But AGO was still struggling. Internally, 30 to 40 people from the 180 member team were let go. Key people exited, including the executive behind its H&SHA. M and ASOS deals. To exist Narkar, Reliance brought in Dharminder Dabral, a cost-saving expert from Tira.

Together, they push for efficiency, cutting losses per order, reducing promotions and focusing on just profitability. As you also tried new tricks, it launched super value aimed at lower-tier cities. But nine months in, leadership questioned its viability, because the economics just did not hold. And then came a pivot. Reliance teamed up with Sheehan, targeting price-conscious shoppers. But even Sheehan's comeback was stumbling because downloads were down, the catalogue was thin, and competition was fierce. Reliance's leadership, including Manoj Mokhiambani's right-hand man, visited AGIO's team to assess what was going wrong. One former manager told my colleague the Ken reporter Noha Bubei, and I'm quoting,

we were adding brands, securing partnerships, but it wasn't translating to results. As you tried adding new categories like gold jewelry, which brought modest gains. Revenue from that segment rose from 2 to 3% to 4% to 5%, but core apparel sales remained flat. And the broader pressure was just unrelenting. Reliance was streamlining everywhere. Store openings slowed, marketing budgets shrank, and even high-level hires needed the chairman's personal approval.

Workplace culture has also shifted. Flexibility vanished and at Geomod, working remotely even one day a week meant being called out in public. So, naturally, the morale dipped. Reliance shuttered underperforming assets like Centro Department stores, refocusing them under its in-house brand umbrella. The fashion market was proving to be tough. And even Nica's fashion segment, despite growth,

was trailing far behind beauty. Agio was built to win in this market. It had the capital, it had the brands, it had the muscle. But something just got lost in execution. As one insider put it, there is no clear priority for Agio inside reliance. It is reactive, not proactive. Which brings us to the question. What happens to a platform that was once the best bet in a broken strategy?

But now risks becoming genuine. just another missed opportunity. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. To subscribe, head to the Ken.com and click on the red subscribe button on top of the Ken website.

Today's episode was hosted by Snigda Sharma and edited by Raji. see you.