JioMart Grabs 20% Share In Bengaluru, Can Overtake Big Basket Soon: Find Out Why?
According to a report by BofA Global Research, Reliance Industries’ e-commerce venture JioMart has gotten closer to market leader BigBasket’s monthly and daily active user base.
“The DAU/MAU ratio, a function of retention, is also highest for Big Basket and JioMart at 17% and 16% respectively,” said BofA which has based the findings on the latest trends of key apps in India according to Feb-21 Sensortower data.
Jiomart, The Strengths Of Reliance Jio And Reliance Retail
JioMart offering more than 50,000 products in the fruits and vegetables, dairy and bakery, staples, snacks and branded foods, beverages, personal care, home care and baby care categories, according to its website.
“Farm produce will directly be sourced from farmers that have collaborated with the brand,” said the JioMart website.
Kotak Institutional Equities surveyed 100 grocery retailers, which have partnered JioMart in Bengaluru, and found that the Reliance Industries’ entity is not only offering cheaper prices to retailers but also has a much larger share of the distribution pie compared to competitors such as Amazon.
Last year During RIL’s annual general meeting some time back, chairman Mukesh Ambani had hinted at the company’s foray into ‘new commerce’ which, he said, was a $700-billion opportunity.
“The main purpose of new commerce is to completely transform the unorganized retail market, which accounts for 90% of India’s retail industry. The three crore merchants and Kirana shop owners, who generate direct and indirect livelihoods for over 20 crore people, form the backbone of India’s commerce eco-system,” he had said.
Why JioMart the next big thing in online grocery retail?
JioMart also has the advantage of being able to integrate with WhatsApp. During the nationwide lockdown, JioMart’s availability in cities where the other apps didn’t work contributed to its popularity. JioMart was quick to act and expanded to over 200 cities.
JioMart clocked big numbers during the lockdown, Reliance said in its first-quarter earnings report (April-June) – over 400,000 orders in a single day. JioMart continues to scale-up quickly, according to the company, with a consistent increase in daily customer orders in the second quarter.
The Goldman Sachs report showed that the new app downloads for JioMart in recent weeks have been double than BigBasket and Grofers put together.
It was clear during Facebook’s $5.7 billion investment in Reliance Retail in April that Reliance Retail will use WhatsApp’s huge user base in India to reach out to new customers. In exchange, WhatsApp Pay’s potential integration with JioMart would give Facebook’s payments feature a much-needed boost.
“RIL’s foray into the space leveraging its large of?ine distribution capabilities, and integration of ability to order groceries through WhatsApp, a platform with >400 mn MAUs in India,” said the report about Reliance’s stronghold in grocery.
Its presence across India, as well as its offline-to-online approach through partnerships with Kirana stores, gives it an advantage over competitors. India’s Kirana retail network of millions of stores remains the country’s primary source of grocery sales. Retailers earn their product margins besides an average delivery charge of Rs15-20 per order. Not only retailers, but users also enjoy huge discounts and offers.
“India has 10 million Kirana stores, which account for 90% of grocery retail. JioMart has already launched in more than 200 cities, leveraging Reliance Retail’s store network, with Kirana partnerships across 20 cities,” said the Goldman Sachs report.
“All respondents mentioned that B2C orders from JioMart’s portal are being supplied and delivered to households directly by the retailers; this is contrary to Mumbai, wherein most retailers were providing only last-mile delivery for products supplied by JioMart,” as per a report.