Reliance Industries, the Indian conglomerate controlled by Mukesh Ambani, Asia’s richest man, launched an e-commerce platform called JioMart at the beginning of this year and the move is expected to provide a direct challenge to Amazon and Walmart-owned Flipkart.
Operated by Reliance Retail, JioMart is currently in a soft launch phase and available only in a few regions around Mumbai, yet the platform is already slated to offer more than 50,000 grocery products to shoppers and is likely to be rolled out more widely across India if the pilot proves successful.
“Whether it’ll be successful, whether it’ll be rolled out on a national level, remains to be seen,” said Arvind Singhal, chairman of consultancy Technopak, in comments reported by the Financial Times. “But if they’re able to crack this … they’ll be the only guys in town.”
JioMart’s entry into India’s lucrative online grocery market spurred Amazon to announce last week that it was entering a partnership with Future Retail, which operates 1,500 stores in more than 400 cities in India.
The deal will make Amazon the official online channel for Future Retail's stores, while Amazon will add Future Retail's grocery products to its two-hour Prime Now delivery service, CNN reported.
Yet a key question for the Financial Times is whether this would be enough to fend off the emergent threat from Reliance’s JioMart, which will offer free delivery and returns as well as discounts of up to Rs 3,000 ($42) for early customers.
In addition, JioMart is looking to sign up India’s small army of kiranas, or family-owned shops that specialise in groceries, pharmaceuticals and other household goods.
These shopkeepers will be able to use a handheld Jio device to order new stock from Reliance’s network of wholesalers and, according to a Financial Times source, Reliance intends to benefit from the loyalty consumers have for the kiranas. It also will save the company from having to build up a network of couriers from scratch.
According to the report, Ambani’s latest JioMart venture is just part of a broader strategy of his to build an Indian digital giant that incorporates the 350 million people who use Jio’s mobile network – the idea being that consumers use its apps for everything from online shopping to streaming music and films.
“The holy grail for us is that … you come directly to us,” said one person familiar with the company’s strategy.
Sourced from Financial Times, CNN; additional content by WARC staff