- The online grocery market currently deems for solely 0.2% of the overall market, it’s expected to reach $10.5 billion (1.2%) by 2023.
- Amazon Retail India posted a loss of INR 127.4 crores and a revenue of INR 139/- crores in 2019.
- The online grocery market is ruled by BigBasket and Grofers with 70% market share by their side.
- Dunzo’s loss broadened to INR 169 crores this year compared to last year, they reported a loss of INR 21.9 crores.
- Swiggy Go another hyperlocal player is currently operating in Bangalore and Hyderabad is aiming to spread over 300 cities by the end of this year.
After disrupting the telecommunication industry, Reliance is all set to disrupt another major market – the grocery market. India being 6th largest grocery market, Reliance has all the reasons to try their luck here.
Reliance Retail a vertical of RIL has launched Jiomart – A hyperlocal offline-to-online (O2O) marketplace is aiming to bridge the gap between 3 crore offline retailers and 20 crores plus households nationally.
Jiomart kicked off their operations in Navi Mumbai, Thane & Kalyan. After receiving a positive response, the team is all set to launch it nationwide. Jiomart being India Ki Nayi Dukaan will have over 50,000 products to choose from that initially includes daily staple products, soaps, and other household items.
Jiomart comes with added features like free home delivery with no minimum amount, pre-registration discounts up to INR 3000/-, no questions asked returns and a promise of express delivery. The company made sure to inform and invite Jio users to this new platform where they can get early bird discounts.
Not only consumers benefit from Jiomart. The company makes sure that suppliers or local grocery stores that would sign-up on their platform are equipped with point of sale terminals (POS), low-interest working capital, inventory management skills, and GST compliance.
During 43nd AGM (Annual General Meeting), Mukesh Ambani said “Our beta trials with thousands of merchants across multiple locations in the country established the premise of New Commerce with a significant increase in sales and improvement in margins for the participating merchants. We are now getting ready to roll this platform at a larger scale”
Jiomart will be directly competing with brands like Amazon, Flipkart, Grofers, Big Basket, Dunzo and others. But they (Jiomart) already have an upper hand here. While Amazon had to tackle FDI rules and regulations, Jiomart will not face such a problem in India. Moreover, Reliance is a well established and reputed brand among consumers, they have behemoth userbase already and all that’s left for the conglomerate is to convey and encourage the users to use Jiomart for all their daily shopping needs.
But things are easier said than done. The grocery market is a highly competitive place and consumers are always looking for fresh and genuine products. Quality cannot be compromised anywhere along with timely delivery.
To tackle this issue, last year RIL acquired Grab A Grub a logistics service and also went to deal with a software company C-Square that specializes in providing solutions to distributors, retailers, online e-commerce and sales for automation. The company would soon roll out apps for Android and iOS platforms.
Reliance is all ready to disrupt the online grocery market. All we have to see is the response from the users and what perception they have regarding Jiomart which has already claimed to be Desh Ki Nayi Dukaan!
It’s going to be interesting to see how a deep-pocketed company enters the grocery market as an aggregator and disrupts the smooth flow of existing players. Days are not far when we might hear that several small players have combined together to tackle this giant. Or things might be entirely different and Jiomart might be beaten by existing players.
All we have to do is wait and watch as the online grocery space heats up during the chilled wintertime.