Reliance Retail’s New Stratagem: Exit JioMart’s Direct Sale, Engage Kiranas

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For a conglomerate to increase its presence and function in the most optimal of ways, the think tank must always be on its toes. After all, long-drawn plans are only as good as you execute them to be, and you can bet Reliance’s ones have a different breed of an endgame. The development in relation to JioMart looks to be one of those trademark remarkable moves.

As per the latest news, Reliance Retail is set to enlist the services of local kirana stores as franchise partners to fulfill orders placed on their e-commerce platform JioMart. Following this, Reliance Retail will straightaway exit from the direct sale of packaged food, grocery, and FMCG products. The decision will only see them continue with the sale of perishables items in fruits and vegetables from its stores or fulfilment centres, whereas kirana stores will be called into action to sell products to consumers in their nearest neighbourhoods.

How Will It Pan Out

For Reliance Retail and JioMart, dropping its B2B cash-and-carry store ideology to turn Reliance Market into B2B delivery of products to kirana stores is a first and a salient departure from their conventional strategy.

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Industry executives in the know of the plans have mentioned in a report that as per the drawn-out blueprint – the kiranas will source goods from Reliance or elsewhere. If it happens that the case of products ordered on JioMart is not in stock with the kiranas (which let’s face it, typically only sell some choicest items!), Reliance Retail will supply them and the margins will be divided equally. The neighbourhood stores will get to place their orders online and receive deliveries at their kiosks or outlets.

For the first go or pilot of the aforementioned model, JioMart has already incorporated more than 56,000 kirana stores from as many as 30 cities to pilot this system of direct sale to consumers from kiranas in the coming June quarter. Moreover, Reliance Retail plans to enrol kiranas in over 100 cities by the month of April, eventually implementing the model across every JioMart store in operation across the length and breadth of India. The coming months could see Reliance Retail following a hybrid model of sales, until the move reaches completion.

Reliance Is Turning the Tables

In the hotly contested e-commerce market of India, this roll of the dice will enable in differentiating it from other e-grocery rivals BigBasket, Amazon, and Grofers, and may also possibly further cement an unwavering dominance of JioMart in the segment.

Considering the fact that JioMart has already left BigBasket and Grofers in the dust in terms of daily active users (logging in 2.3 million active users!), experts have opined that a faster order completion rate resulting in higher sales volume could see them trump the competition even further.

In developing scenarios such as these, the might of the Jio-Facebook deal comes out in full effect. Seeking to capitalize on the 400 million-plus WhatsApp users, the Mukesh Ambani led behemoth is looking to manoeuvre itself well to milk out every possible avenue stemming from the partnership.

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Ambitions of the company only look to soar, considering how while addressing the 43rd AGM in July last year, Ambani had claimed that JioMart will also cover electronics, pharma, fashion, and healthcare in the times ahead.

Time looks ripe in the e-commerce domain to shake up the right moves, considering how Indian e-commerce is expected to lodge a 12.1% CAGR till 2023. There is always the sense that there is much more for players like Amazon, JioMart, and Flipkart to aim at, with potential internet penetration in India underway. With JioMart making impressive headways in the past 7 months, this juggernaut is set to jog on.

Stay tuned for more updates.

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