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Will boost JioMart ops, challenge e-tailers, Retail News, ET Retail


Will boost JioMart ops, challenge e-tailersBengaluru: The Reliance Industries-Future Group deal’s impact will go beyond brick-and-mortar retail in India. It will also affect the country’s growing e-commerce economy as RIL’s chairman Mukesh Ambani eyes a bigger play online. The recently announced acquisition will accelerate scaling up of Reliance’s newly launched e-commerce venture JioMart.

It will also make it harder for its rivals — Walmart’s Flipkart and Amazon India — to strengthen offline presence for the grocery business, according to a note by Goldman Sachs on Monday. Additionally, this deal, if completed, would mean e-tailers would be left with fewer avenues here to invest in to strengthen their supply chain and logistics network offline.

“..we highlight that this acquisition, if completed, would also remove one potential expansion avenue for competitors, especially Amazon and Walmart, who have been looking to bolster their physical presence in retailing in India to strengthen their online business,” the Wall Street powerhouse said. Reports by Kotak and Axis Capital also indicated similar changes in dynamics for the online battle, and that Future’s retail assets will help Reliance in ramping up its online business “meaningfully”.

Across various brands and formats like Big Bazaar, Future has 1,736 stores. For example, Amazon India has been using some Big Bazaar outlets to fulfil grocery deliveries for Pantry.

JioMart, which so far sells grocery, has seen a peak of 4 lakh daily orders already. This is higher than horizontal rivals like Flipkart or Amazon India as well as vertical platforms like Bigbasket and Grofers. JioMart, which has been scaling operations in the middle of the pandemic, has made deliveries free for all orders without any minimum order size. This, sources said, has helped the company corner new users.

“Further, Easyday, which is a small kirana-like neighbourhood store format, can also potentially boost JioMart’s fulfilment capability in the cities that it is present in…We believe these stores can be converted into Reliance-branded outlets and be utilised to carry out JioMart’s hyperlocal operations. Further, Reliance Retail can also get data of these local neighbourhoods and can easily on-board them as JioMart’s customers,” a report from Kotak Institutional Equities said.

It added that there are close to 1,000 Easyday, Heritage Fresh and Nilgiris stores in Future’s network, as of December 2019, and some of them, locally for select locations, had started WhatsApp-based ordering. WhatsApp, with 400 million active users, is expected to play a key role for JioMart to smoothen online ordering via the messaging platform, whose parent firm Facebook invested $5.7 billion in Jio Platforms.

Amazon India has also been expanding its grocery service too. While its Pantry service was available in 110 cities in May, the company in June said it had expanded Pantry in over 300 cities. JioMart is currently available in 200 cities.





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