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Mukesh Ambani Takes On Amazon & Walmart With JioMart Move

Pritish raj by Pritish raj
July 17, 2020
in News, Retail, Tech
4 min read
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JioMart Nationwide- Next Big Brand

JioMart Nationwide- Next Big Brand

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  • Mukesh Ambani long trumped its ambition to revolutionize 1.3 billion retailers in the country by persuading farmers and shopkeepers to sell their products on its digital JioMart platform launched this year.

Backed by multibillion-dollar investments from multinational tech firms, India’s richest man is poised to rumble through his conglomerate Reliance with Amazon and Walmart for the country ‘s massive e-commerce market.

But it’s far from certain that the new bet from Mukesh Ambani would pay off in a competitive market where multiple suppliers are not well versed in the digital industry.

The mogul has long trumped its ambition to revolutionize 1.3 billion retailers in the country by persuading farmers and shopkeepers to sell their products on its digital JioMart platform launched this year.

Yet it will not be easy to modernize India’s creaky, dysfunctional supply chains, even for Reliance, the nation’s largest retailer by sales with a portfolio spanning supermarkets, electronics shops, and fast-fashion outlets.

Google on Wednesday, following in the footsteps of Facebook and Intel, became the biggest Silicon Valley player to invest in the Indian oil-to-telecoms juggernaut digital network.

Notwithstanding these confidence votes, the success of Ambani will rely on India’s mom-and-pop stores and their ability to adjust to an online business’ demands, analysts claim.

This could be much harder to keep the bargain-hungry buyers happy in a tightly competitive market.

After its roll-out to 200 Indian cities in May, early signs for JioMart have not been encouraging.

From rotten food to missed orders and overdue refunds, consumers complained about everything.

A prolific online shopper who buys Amazon products and Walmart-owned retailer Myntra clothes, Mehul Shah is the kind of customer Ambani and his rivals sought for.

The 22-year-old placed his first order with JioMart shortly after the highly awaited launch of the app.

“Because there was so much excitement about it, I decided to see what it was like,” he told AFP.

But less than half of his things were shipped, and he ordered mint leaves to arrive rotted, prompting Shah to throw them away.

Shah ‘s experience highlights the difficulties Ambani is facing as he aims to take on Amazon, BigBasket, and Grofers, all of which have set up supply and distribution networks in India.

JioMart Interface- Next Big Brand
JioMart Interface- Next Big Brand

The 63-year-old tycoon is likely to be using the same approach he used to make his Jio telecom service a market leader since its launch in 2016.

Jio’s cut-price discounts put the phones in India’s hands of millions of first-time buyers, clogging up the market and driving rivals out of the game.

Ambani has raised more than $22 billion in a rights issue in recent months, and through the selling of shares in Reliance to international investors.

Now, the company is net-debt-free and has burning cash, analysts say.

“JioMart will use the money by providing deep discounts to get customers, and is in it for the long haul,” said Minakshi Ghosh, an independent analyst.

But the company will still need to inject funds into educating local online trading shopkeepers. Most claim that the growth of supermarkets and e-commerce has affected their companies badly.

“I never even imagined running such a modern business in my dreams … or receiving card payments,” said Kavita Chowdhury, a shopkeeper in Navi Mumbai, a financial hub of India’s neighboring city.

For the 30-year-old, her collaboration with JioMart could not have come at a better time, with the coronavirus pandemic pushing her to shutter the bricks-and-mortar shop.

Then, she is now willing to sell online and business is booming, she told AFP.

A Reliance source told AFP JioMart that consumers had received a “stunning” response.

“Del Monte olives and focaccia bread are being purchased by people in small towns … They are aware of global trends and want more choices,” he said.

But he admitted that the organization was faced with “teething issues” in logistics — problems that experts say could be their Achilles heel.

“You need clear delivery models and customer satisfaction” to undertake a productive e-commerce project, Senior forecast analyst Satish Meena of Forrester Research told AFP.

Reliance, he said, would not “get a walkover only because of its financial ability.”

Even some consumers have sworn off the site.

Vamshi Krishna, 28, told AFP that after his first two orders went missing he would never buy anything from JioMart again.

“I wanted to give them a second chance, given the problems with my first order … because it’s an Ambani business,” he said.

“I have serious questions now as to whether I will ever get my money back.”

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Pritish raj

Pritish raj

Pritish Raj is a content writer at Next Big Brand. Hailing from the diversified state of Bihar, he is an engineer by education who chooses the way of poetry, photography, and writing to kick off his career. Highly enthusiastic about brands and startups, he aims to be a travel content creator.

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