Reliance Retail whose growth model is ‘based on partnerships with small merchants and shopkeepers’ has also ‘successfully piloted’ the JioMart grocery model with kirana partners.
India’s retail market is set to become even more competitive as JioMart gears up to expand its offerings to cover electronics, fashion, pharmaceuticals and healthcare. The move will give consumers — already addicted to the products and service of e-commerce majors Amazon and Flipkart — even more choice.
JioMart has already rolled out pilots in 200 cities and claims to be servicing over 2,50,000 orders a day. Reliance Retail whose growth model is ‘based on partnerships with small merchants and shopkeepers’ has also ‘successfully piloted’ the JioMart grocery model with kirana partners.
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JioMart will cover more cities, customers and expand to more categories in the coming years besides strengthening collaboration with more brands, businesses and entrepreneurs. Reliance Retail, which has received strong interest from strategic and financial investors, will induct global partners in the next few quarters.
“This seamless connection will provide a huge boost to India’s consumption which in turn will strengthen country’s existing manufacturing capacity as well as enable new start-ups.. . and over time, India can be a large manufacturing hub for meeting our own growing consumption needs,” Mukesh Ambani, chairman RIL, said on Wednesday.
JioMart’s partnership with Facebook-owned WhatsApp, that has a user base of more than 400 million in India, gives the company the much needed leverage to deepen its network of kirana stores and consumer reach. Analysts had earlier pointed out that JioMart had been facing some issues with getting customers and merchants. With WhatsApp on board, JioMart is now focussed on scaling its geographical reach and delivery capabilities. Merging the capabilities of kirana stores and Reliance Retail’s pan-India network of 12,000 stores — two-thirds of which are located in tier two, three and four towns — to service JioMart’s customers gives it an edge to fight behemoths Amazon and Walmart-backed Flipkart. RIL is also said to be in talks to acquire the retail businesses of Future Group that owns the Big Bazaar chain of stores.
The WhatsApp alliance could be a big advantage for JioMart and Reliance’s strength in distribution will further help it scale up the grocery business. Soon after the Jio-WhatsApp agreement, Amazon launched its ‘local shops on Amazon’ programme in the country on a wider scale to expand its network of sellers. Analysts say categories like e-tail are going to be shared by Reliance, Amazon and Flipkart. Arvind Singhal, CMD at Technopak believes that the market is huge and there is enough room for players to grow and co-exist.
“JioMart is fundamentally different as an idea and does not come in direct or indirect competition with Flipkart or Amazon — both are pure play online players and have got significant restrictions because of FDI policy which Reliance does not have,” Singhal said.
Earlier this week, Walmart led a $1.2 billion investment in Flipkart to fuel the e-commerce firm’s growth. Jeff Bezos-led Amazon has committed to invest an incremental $1 billion in India, taking its total commitment to $6 billion.