In its bid to tap into India’s soon-to-be USD 85 billion online retail market, Reliance Industries, the country’s largest company by market cap has launched JioMart, an online portal that will directly compete with e-commerce giants Amazon India and Walmart-backed Flipkart.
On Monday, Reliance Retail Ltd., the retail arm of Indian conglomerate Reliance Industries Ltd. invited Jio telecom users to register with the new venture, JioMart, local media Mint reported.
Although this is a soft launch which is limited to three suburban areas of Mumbai, the company confirmed it will gradually spread its presence in other markets as well.
“Yes, we have soft-launched our operations. All Jio users are sent invites to register to avail of preliminary discounts. Though it is currently only in three regions, we would be scaling it up further. The JioMart app will be launched soon,” Mint quoted a Reliance official who did not wish to be named.
To begin with, JioMart will focus on the high-consumption category that includes grocery, staples, and other household products such as shampoos and soaps. The move will first put JioMart into direct competition with incumbents such as Gurugram-based online grocery company Grofers and Bengaluru-based unicorn BigBasket. Together they hold the largest chunk of the market share currently, which might get shaken up as JioMart opens up its service in 2020.
JioMart will reportedly let users order from 50,000 grocery products without any minimum order restrictions. It will also provide free delivery and return of the products.
For Reliance Retail, the preparation to launch an online retail platform with a strong partnership with offline stores has been in the work for a couple of years. It wants to disrupt the retail market by digitizing physical stores and link all the stakeholders of offline retail including manufacturers, traders, small merchants, consumer brands, and consumers.
In August, during the company’s annual general meeting, Reliance chairman Mukesh Ambani had said the company will partner with 30 million mom-and-pop stores to provide them end-to-end digital and physical distribution.
JioMart will onboard retailers on its digital platform from where users will be able to browse, choose, and pay for the products. JioMart will get the products delivered from these shops. Later, it will also use its other supermarkets, retail stores to fulfill online orders. Reliance Retail runs neighborhood stores, supermarkets, wholesale stores, and an online fashion platform Ajio.com.
Since the beginning of this year, Reliance has been on an acquisition spree of technology startups to push its e-commerce plan that involves an active partnership with physical retailers and utilizing their capabilities for online sales. In April, Reliance Jio said it bought an 87% stake in Haptik, an (artificial intelligence) AI-enabled chatbot; later in August it bought a controlling stake in an e-commerce company Fynd; earlier this month it acquired a Hyderabad-based SaaS company NowFloats that works with SMEs to digitize their operations.
Another report in a local media Economic Times quoted a person with the company who said JioMart is in the process of registering mom-and-pop stores and giving them (point-of-sales) POS machines with in-built billing applications. “It enables digital transactions, promotions including loyalty, discount coupons by fast-moving consumer goods firms and supply chain management,” the person said.