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As e-grocers perfect the art of online sale, Jio effect lurks in background

Mukesh Ambani-led Reliance Industries' upcoming 'new commerce' platform is working hard to get its grocery game right

Ecommerce
Karan Choudhury Bengaluru
4 min read Last Updated : Jan 17 2020 | 8:04 PM IST
Almost three years ago, Amazon India Senior Vice-President and country manager Amit Agarwal had claimed his platform was proudly selling 50 different kinds of churan. He had also predicted that grocery would become the biggest money churner for online marketplaces in times to come. He was mocked by competition back then. Cut to 2019 and perfecting the art of online sale seems to be working towards almost full-time.

A player that is yet to join the race might, however, present a challenge at full blast: Mukesh Ambani-led Reliance Industries’ upcoming Jio ‘new commerce’ platform is working hard to get its grocery game right. The company has been working on various pilots to put together all the logistics for delivering grocery as well as fresh produce. 

Over several past months, Reliance has hired several senior executives with experience of working in the grocery and retail industry. It has got on board Rohit Sood as assistant vice-president (Grocery and E-commerce Strategy). Sood has in the past set up and operated the FMCG business at SPAR Hypermarkets, Carrefour Cash & Carry and also worked at companies like Snapdeal and Paytm. Sources say that Sood and his team are working on setting up the grocery network, specifically to perfect the delivery of fresh produce, something most major players have either not been able to do properly or completely stayed away from.


With more than 10,000 stores under various Reliance Retail brands and over 2.5 million kirana stores already tying up with it, Jio’s online marketplace would have the biggest hyperlocal logistics network in the country. 

According to sources in the know, more work on logistics development is happening on ground. “The idea is to bolster offline partnerships with kirana stores, which are expected to play a major role in the whole initiative."

"The plan also includes opening more stores. Over the next few months, more than 2,000 stores might be opened under various brands, including Reliance Fresh, Digital, Trends and Footprint, among others. By the end of the year, the company would have a vast network of stores that would form the core logistics network for Reliance,” said a source who did not wish to be named.

RIL’s e-commerce platform, announced by chairman Mukesh Ambani at the Vibrant Gujarat summit in January this year, is looking to leverage the company’s offerings like JioMoney, JioGST and Jio Payments Bank effectively to bring in a large ready-made customer base from the Jio universe on to the online shopping platform, according to analysts.


Industry experts believe that Jio’s new commerce plan is similar to Alibaba’s rural China initiative. “The Mukesh Ambani-led company wants to go to kirana stores, which have a captive audience and loyal customers. The relationship that customers have with these stores, and those who run these stores, goes decades back, and in some cases even generations,” said a senior analyst with an international consultancy firm. There is an inherent trust factor here. Both know that the other won’t cheat.

Jio plans to capitalise on its various grocery brands, including Reliance Fresh, Reliance Smart and Reliance Market. Reliance Fresh is a neighbourhood store concept for fresh produce and daily grocery delivery which follows a farm-to-fork model. Reliance Smart has a low-price retail store model. At the moment it sells online through the reliancesmart.in portal in several cities.

Reliance Market is a cash-and-carry store chain that provides inventory to its kirana network. The company has one of the largest presence in the B2B retail business, with over 46 stores transacting with around 2.5 million customers.


The company is expected to soon launch its point of sale (PoS) machines to get retailers hooked to Reliance’s larger retail ecosystem. Using these, retailers can manage order inventory, accept digital payments, get database of regular consumers, access Jio’s offers and award programmes, and also secure easy short-term loans.

Reliance, which is calling its online marketplace an extension of its brick-and-mortar outreach, would not have any sellers or vendors on the platform and follow an inventory-based model.

It also wants to gradually take its merchant base to the cloud for better logistics and inventory management. Getting more merchants to the cloud would be critical for scaling up the e-commerce business and taking on competition.

Topics :ecommerceFlipkartReliance JioAmazon

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