Reliance Retail will depart from its previous strategy of directly selling packaged grocery products. Instead, its e-commerce platform JioMart will soon use Kirana stores as franchise partners to deliver non-perishable grocery items in India.
Kiranas will be leveraged for non-perishable items; Reliance Retail will fulfill perishable goods
JioMart will utilise the existing inventory of these Kiranas, which typically sell the most popular items in their neighbourhoods. And in case there are non-perishable products ordered online which are not in stock with the Kiranas, Reliance Retail will supply them and the margins will be shared equally among the parties involved. Reliance Retail will also continue to sell fruits, vegetables and other perishable items in its stores and fulfillment centres.
Pilot of new format ongoing, and will continue to be rolled out
JioMart has started to partner close to 60,000 Kiranas from 30 cities to pilot this new system of selling to consumers. It is planning to enroll more Kiranas in over 100 cities by April 2021, and implement this new arrangement in all locations where JioMart is operating.
Hybrid model in the interim before Reliance Retail will exit from direct sales
It is expected that it will take some time before Kiranas are fully roped in. In the interim, JioMart plans to have in the next few months a hybrid model. Kiranas will be able to deliver where there is an existing arrangement, while Reliance Retail stores will be in charge of fulfillment in locations where there is still no such partnership.
Kirana partnership will be a competitive advantage for Reliance Retail
This pivot in its strategy will help Reliance Retail fulfil orders placed by shoppers on JioMart at a faster pace than competition. It can be Reliance’s competitive advantage over other e-commerce rivals such as Big Basket and Grofers. Although JioMart only started operations in December 2019 and an official rollout in May 2020, it has already overtaken Big Basket and Grofers based on daily active users. This partnership with Kiranas will further cement its dominance in e-grocery in India.