Home/ Companies / News/  For Reliance Retail’s JioMart, private labels are the way to go

Billionaire Mukesh Ambani’s online grocery venture JioMart has gone live across 200 cities and towns, riding the sourcing power and private labels of its parent Reliance Retail, and throwing a challenge to established rivals BigBasket and Grofers, and the grocery business of Amazon and Flipkart.

The launch of JioMart comes at a time online grocers are seeing explosive demand given the movement curbs during the nationwide lockdown. Just a month ago, Reliance Retail Ltd, which houses Reliance Industries Ltd’s (RIL’s) grocery venture, had signed a commercial pact with Facebook-owned WhatsApp to boost the reach of JioMart. JioMart.com replaces Reliancesmart.in, through which users could place online orders earlier.

“With JioMart, Reliance Retail initially plans to push its grocery brands. However, as the website picks up, the company plans to add more products to the catalogue, expanding it to other segments (fashion, consumer electronics) that it is present in," an industry executive aware of its plans said on condition of anonymity.

Reliance Retail operates neighbourhood stores, supermarkets, hypermarkets, wholesale, specialty and online stores. It sells staples, food, home, personal care and general merchandise under its own brands such as Best Farms, Good Life, Masti Oye, Kaffe, Enzo, Mopz, Expelz and Home One. Most e-commerce retailers—grocery firms and others—are increasingly focusing on such in-house brands which offer better margins.

“Never waste a crisis, they say! A wise colleague mentioned today, ‘Alibaba also flourished starting from the SARS crisis," Reliance Retail’s grocery retail business chief executive Damodar Mall tweeted after the JioMart website went live.

Reliance Retail, the retail arm of oil-to-telecom conglomerate RIL, operates 11,784 stores at over 6,600 plus towns and cities, more than two-thirds of them in tier-II, III and IV towns. It has three core divisions—grocery (18% of sales), consumer electronics (30%) and fashion and lifestyle (8%).

Private labels fetch around 75% of its fashion and lifestyle revenues, and 14% of grocery revenues. The firm expects grocery as the fastest-growing segment going forward.

Under grocery, Reliance Retail operates three core physical formats—neighbourhood store (Reliance Fresh), supermarkets (Reliance SMART) and wholesale/B2B cash and carry stores (Reliance Market). It also operates Qwik Mart, a convenience store at Reliance fuel outlets. Reliance Fresh and Smart account for over 50% of all fruits and vegetables sold in modern trade.

WhatsApp’s user base of about 400 million in India is expected to significantly accelerate the adoption of JioMart. The company had last month launched a pilot of JioMart deliveries through WhatsApp in suburban Mumbai, days after announcing that Facebook Inc. would spend $5.7 billion for 9.99% stake in RIL’s digital unit, Jio Platforms.

JioMart currently offers payments only through netbanking and credit/debit cards. More payment options may be added later. On order value less than 750, a delivery fee of 25 will be levied.

Reliance Retail also plans to explore and scale up new ways of engaging customers in shopping such as pop-up stores, mobile vans, the company said in a presentation to analysts on 30 April, post its March quarter results. Last fiscal, Reliance Retail posted a 24.8% year-on-year jump in revenue at 1.63 trillion.

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Updated: 25 May 2020, 12:02 AM IST
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