JioMart Is Fast Closing the Gap With BigBasket: Soon Become The Market Leader?

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Mukesh Ambani’s JioMart is posing to be a tough competitor for BigBasket as it is inching closer to the latter’s daily and monthly userbase.

According to a report by BofA Global Research, the DAU/MAU ratio of JioMart is at 16% whilst that of BigBasket is currently 1 point higher at 17%.

Since its launch in May 2020, JioMart has been able to successfully corner 20% market share amid grocery distributors in Bangalore. A survey conducted by Kotak Institutional Equities found that the RIL’s O2O aka offline-to-online entity is not only offering low prices to retailers but also happens to have a much bigger share of the distribution pie when compared to its rivals such as Amazon.

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That being said, industry analysts believe JioMart has the potential to onboard a far more number of kiranas as it is continually improving its service levels. Currently, retailers who are tied up with JioMart earn the margins on products sold along with an average delivery charge ranging from anywhere between Rs 15-20 per order.

Reliance Retail, which is a wholly-owned subsidiary of RIL, launched JioMart amid the chaos fuelled pandemic in 2020. At present, Reliance Retail, with over a whopping 3,500 stores, is the retail king of India, and it is the only one that has its presence across all verticals such as electronics, fashion, grocery and more.

Note here that JioMart’s distributors are currently also pushing Reliance’s very own private label products. As of December, close to 37% of Mumbai retailers stock JioMart’s private label products, whilst only 13% of retailers stock the private label goods of Amazon and Metro.

Reliance Retail sells everything from food, home improvement products, personal care, and general merchandise under its own brand names such as Good Life, Masti Oye, Best Farms, Kaffe, Expelz, Home One and more.

A majority of e-commerce retailers, including grocery firms and others, are becoming increasingly more interested in housing such in-house brands as they offer better margins than other big brands that have long been dominating the FMCG space.

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JioMart has two ways in which it engages with small retailers. First, by being a distributor and supplying products to retailers and then by utilising the network of kiranas to fulfil orders placed on JioMart.

When it comes to the grocery segment, Reliance Retail has a 20% share amid the organised players in the market and is 40% larger when it comes to the second biggest player DMart. In the fashion segment, the company has a 5% share in organised retail and is 50% bigger than its peers, such as Aditya Birla Fashion.

Lastly, Reliance Retail, with $6 billion in revenue, accounts for a whopping third of the country’s organised electronics retail and 12% of the overall electronics segment. And it also generates $10 billion in addition to that from connectivity or telecom revenues via Reliance Jio.

Thus, all in all, it now remains to be seen how will JioMart further expand its market share into India’s retail space. We will keep you updated. Until then, stay tuned.

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