After telecom, Jio is getting ready to disrupt the ecommerce industry. The e-commerce market is already competitive. But Jio is working on a very different business model, offline e-commerce, for their new venture.
The company is working with local stores or ‘kiranas’ and some big consumer brands for an operational marketing model. Jio is planning to enable shoppers to buy from neighbourhood or local shops using their Jio Money platform.
A pilot with multiple store tie-ups and some big consumer brands is presently on at Mumbai, Chennai and Ahmedabad. The company is planning for a larger pan-India rollout next year.
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Jio’s Offline E-Commerce Model
Presently Jio has a user base of 132 million subscribers. They have achieved these numbers in just about a year. Now, the company is trying to enter the e-commerce market with their online-to-offline model, where they will turn the local stores into exclusive Jio sellers.
Companies like Paytm and PhonePe are working on a similar model where they are collaborating with kirana stores and other consumer brands locally. At the same time, e-commerce giants Amazon and Flipkart are investing huge money in grocery delivery businesses.
Untapped Market
The online-to-offline business model is still in an early stage in the country. The retail industry in India stands at $650 billion, where e-commerce has only around 3-4 per cent share.
The other major organised retailers like Big Bazaar or Pantaloons have only an 8% share. The remaining 88-89 per cent of the market, with smaller entities, remains untapped.
With Jio’s widespread presence around the country, the company can successfully foray into the untapped offline e-commerce market.
A Different Business Model
While the company hasn’t yet confirmed their e-commerce business model, their pilot project suggests an offline e-commerce model.
Jio has already partnered with consumer brands like ITC, Wipro, Dabur, Tata Beverages, Godrej Consumer Products and Amul for the pilot rollout in Mumbai, Ahmedabad and Chennai.
Jio will continue tying up with other consumer brands for their e-commerce platform and will simultaneously work on a supply distribution network with local stores.
Coupons And Jio Money
All the transactions happening under this model will take place either with digital coupon codes sent by Jio or Jio Money. One can use these coupons to purchase items at their nearest kirana stores. The stores enrolled by Jio will be equipped with specific software on their smartphones to read these coupons and accept Jio Money.
The Jio-partnered stores can also use the software to send promotional offers to their customers, even to those who are not Jio subscribers.
Jio will do geo-tagging for the leftover stocks in a given geographical area and will allow retailers to send promotional offers in a specific area.
Revenue Generation
Jio will directly charge the brands a fee for the products being sold using their platform, to allow ‘below the line marketing’. This will double up as a money-saving advertising option for the companies.
The company is trying to build a seamless network between manufacturers and retailers, to allow better and timely offers to scale up the sales.
As per Jio officials, the company is not going to invest any of its own money to offer extra discounts on products.
Jio Money is presently available to use with some of the biggest ecommerce brands. Soon it will also be available at your neighbourhood Kirana stores!