NEW DELHI: Billionaire Mukesh Ambani’s Reliance Industries has launched an online extension of its grocery business under JioMart brand across 200 cities.
The service is being offered in all leading metros (Mumbai, Delhi, Bengaluru and Kolkata), and even in smaller towns like Mysuru, Bhatinda and Dehradun.
JioMart is now delivering in more than 200 cities, Damodar Mall, the chief executive officer of Reliance Retail’s grocery business said in a tweet.
JioMart last month started a pilot project serving users in three neighbourhoods surrounding Mumbai.
Credit Suisse said, “The national roll-out provides customers with a useful alternative to existing players (BigBasket, Grofers) as online grocery orders have spiked, given the fewer store visits”.
D-Mart, it said, mentioned that April revenues are down 45 per cent year-on-year as nearly 50 per cent of the stores are shut or have very restricted hours of operation. Therefore, online orders should help offset some of the lower sales in physical stores.
CLSA said as of now, the website will only use Reliance’s offline grocery supply chain as its backbone and deliver to homes.
“Success at its ongoing beta tests in Navi Mumbai, which also encompasses mom and pop stores and uses WhatsApp as a platform to order, will be later extended to pan-India,” it said.
Users can order from a full suite of grocery items by visiting the JioMart website. Products include fruits and vegetables, dairy and baked goods, staples, snacks and branded foods, beverages, and personal and home care.
Reliance’s private labels also featured prominently.
“While it does not commit on a delivery timeline when ordering (due to the lockdown), it aims to deliver orders within a two-day timeframe,” CLSA said.
Eventually, like other online retailers, it is possible that Reliance integrates its entire retail offerings, including fashion, lifestyle and consumer electronics, onto one super e-commerce platform and mobile app.
“This, along with a pan-India extension of partnerships with mom & pop stores after a successful beta test and ramp-up of this new commerce venture is crucial in Reliance’s grand plan of converting Jio’s 400 million-plus subscribers into customers for its eCommerce and other offerings,” CLSA said.
Recent partnerships with Facebook-owned WhatsApp for JioMart will only help in increasing monetisation opportunities by increasing the convenience and reach of consumers.
The grocery platform was previously piloting deliveries only in select areas of Mumbai.
“JioMart has seen a 4x rise in online orders from a low base. With its pan India presence JioMart now directly competes with Amazon and Flipkart in eCommerce,” Bernstein said in a separate report.
Grocery is 70 per cent of the Indian retail market, 90 per cent-plus unorganised, driven by Kirana stores/small retailers. “Organised penetration is less than 10 per cent while online penetration for grocery is less than 1 per cent,” it said.
Facebook has made a bigger push into e-commerce with the launch of Shops. “The idea is to bring millions of small businesses online. This will allow free online storefronts for small businesses and retailers and expand Facebook presence across Instagram, WhatsApp and Messenger,” Bernstein said.
“Facebook shops will be complimentary to WhatsApp business use to sign and onboard Kirana stores for JioMart (grocery app of Reliance Retail).”
Credit Suisse said JioMart currently fulfills the order by own entity and kiranas likely to be on-boarded subsequently.
“The platform lists all the major grocery categories like fruits and vegetables, staples, dairy and bakery, snacks, beverages, personal care, home care and baby care.
“In terms of pricing, Reliance has extended the Smart promise of ‘minimum 5 per cent off on MRP’ to all products on JioMart. The discount is higher on its private label brands, and is competitive to branded products,” it said.
Reliance Retail had been piloting the initiative in Navi Mumbai, Thane and Kalyan among select population group. It was serving these customers through both Kirana stores and their own warehouses. It also set up Smart Points, which were acting as delivery points in neighbourhood.
However, orders post the national launch are being serviced by Reliance Smart and Fresh stores, Sahakari Bhandar stores (owned by Reliance retail), and is not yet fully leveraging kirana network (as on-boarding of Kirana stores is still ongoing), Credit Suisse said.
“Just prior to the national launch, Reliance Retail tapped the WhatsApp customer base in the three pilot regions to source orders. In our view, it was just a test phase of integration. The orders were available only for pick-up from nearby Kirana store, whose details were sent to the customer via WhatsApp. However, the national launch, so far, does not have integration with WhatsApp,” it said.
The brokerage said it placed an order on JioMart but the delivered order value was 55 per cent of the booked order value, due to inventory limitation in the nearby Sahakari Bhandar store. (AGENCIES)
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