Jiomart Case Study: How It Is Leading in E-commerce Industry With Its Business Model?

When it comes to the Indian business arena, one simply cannot ignore Mr. Mukesh Ambani—the owner of Reliance Industries, and the wealthiest businessman of India. He has footprints in some of the most important sectors of the Indian economy such as refining, oil & gas, petrochemicals, telecom, retail, and media. Reliance's oil refining business has been its crown jewel to date.

In September 2016, Mukesh Ambani officially launched his telecommunication venture called Jio (Joint Implementation Opportunities) and set an example by turning Jio into the largest mobile network in India and the third-largest mobile network operator in the world with over 322.99 million subscribers (source: Wikipedia).

Witnessing the growth in revenues, profits, and market share in the above-mentioned sectors, Mukesh Ambani is now all set to try his hand at e-commerce through his new venture called JioMart. So what exactly is JioMart all about?

JioMart - Company Highlights

JioMart - How Does it Work?
Features of JioMart
The Idea Behind Starting JioMart
JioMart - Business Model and Revenue Model
How to Become a Seller on JioMart?
How JioMart Consumers and Retailers will Benefit from the Jio-Facebook Deal
A Peril Approaching Grofers, Amazon Now, and Big Basket

JioMart - How Does it Work?

JioMart is an online grocery store that provides 50,000+ grocery products at discounted rates at your doorstep through an express delivery system. It follows an on-demand model. The company will avoid the system of warehousing and partner with local retailers instead. These retailers will source the grocery products and deliver it to the customers.

JioMart began functioning in January 2020 and is currently operational in Navi Mumbai, Thane, and Kalyan. The company plans to launch its services in other parts India soon. However, the exact launch date is not known yet.

JioMart's app is available for download on Google Play Store and Apple Store.

Features of JioMart

JioMart will operate on the online to offline business model; it will connect with local retailers and deliver goods to customers by procuring them from the nearest store located in the customer’s vicinity. This model is unlike the warehouse model used by Grofers and Amazon Now.

The company wants to correct the unorganized retail sector and help local shopkeepers whose businesses were adversely affected due to competitive pricing and warehousing strategies of online retail stores. In addition to increased sales and margins, these shopkeepers will be equipped with point of sale (PoS) terminals, integrated billing applications, and GST compliance. It will also upskill them in inventory management and supply chain management.

RIL wants to establish its new venture, termed as 'Desh Ki Nayi Dukaan', in this manner.

JioMart claims to offer the following consumer-friendly services:

• Free home delivery: It will give you the benefit of delivery of commodities at your doorstep by procuring it from the nearby store, and that too free of cost, which your 'Kirane wala bhaiya' may not.
• No minimum value: Generally, e-commerce sites set up a minimum value of a purchase to validate free delivery. For example, Grofers has the policy of free delivery on a minimum purchase of INR 500. JioMart will not expect a 'minimum payment' and abstain from delivery charges, even for the smallest of items ordered.
• Express delivery: Express delivery means quicker delivery than ordinary services. In the e-commerce segment, it is generally within 24 hours.
• No questions asked return policy: When you wish to return the goods that you ordered online, you are almost always bombarded with unnecessary questions. And most of the times, they cannot avoided. JioMart will save you this hassle.
• Early bird discount of INR 3000: The platform has come up with a promotional strategy of pre-registration wherein people can save up to Rs 3000 on future shopping. Reliance Jio has started sending invites to its existing telecom service users in selected areas.

Reliance’s JioMart Expands Services | How To use JioMart

Reliance’s JioMart expanded its services in 200+ cities in India. Read to know how it competes in E-grocery market with Bigbasket & Grofers.

StartupTalkyVarad Kitey

The Idea Behind Starting JioMart

JioMart wasn’t an overnight expedition of Mukesh Ambani but a well-assessed move with the sole motive of capturing the highly sought-after e-commerce segment. The domain is projected to grow up to $1.2 Trillion by 2021.

Mukesh Ambani already has a formidable customer base in the retail sector with Reliance Fresh which functions successfully on the brick-and-mortar model. JioMart owner Mukesh Ambani's plan to set up an e-commerce platform goes back to 2019. His ambitious project emulates his desire to compete with global e-commerce giants such as Amazon and Walmart-owned Flipkart.

1. Acquisition of Grab A Grub: Grab A Grub is an Indian logistics startup founded in 2013. In March 2019, Reliance Industrial Investments and Holdings Limited (RIIHL) acquired it for $14.9 million to support the logistics of Jio Mart founder Mukesh Ambani’s 'planned e-commerce venture'. Grab was chosen because it worked successfully with some mega-brands such as McDonald's, BigBasket, Myntra, Amazon Now, and Swiggy.
2. Acquisition of C-Square: C-Square Info Solutions Private Limited, founded in 2002, provides software solutions for verticals like e-commerce, salesforce, retail, etc. It was acquired by RIIHL in March 2019 for $11.56 million. A strategic move by RIL, it was aimed to strengthen JioMart.

JioMart - Business Model and Revenue Model

RIL is offering local merchants an O2O (online-to-offline) marketplace through JioMart. This business model was pioneered by the Chinese e-commerce giant Alibaba Group Holding Ltd. Under the O2O model, a consumer searches for the product or service online but buys it through an offline channel.

It connects with local retailers and delivers goods to the customers by procuring them from the nearest store located in the customer’s locality. The customer will use his or her official WhatsApp number to place the order. Post confirmation, the user will receive the bill which is to be paid in cash. When the store is ready with the order, the customer will receive a notification to pickup the order from store.

How to Become a Seller on JioMart?

A retailer can register with JioMart to become a seller. After registering with JioMart, retailers will receive the required support for the smooth delivery of goods to customers.

Registered grocery store owners will be able to list their inventories, take orders, create offers, and manage online sales using the app. JioMart will ensure that the sellers associated with its platform get a smooth selling experience.

How JioMart Consumers and Retailers will Benefit from the Jio-Facebook Deal

The Jio-Facebook deal, wherein Facebook will invest INR 43,574 crore ($5.7 billion) in Jio platforms, will make lives easier for the consumers and retailers associated with JioMart. As part of this deal, WhatsApp - Facebook’s popular messaging platform - will collaborate with JioMart. Owing to this collaboration, JioMart users will be able to place their order through WhatsApp and Facebook while payments can be made using ‘WhatsApp Pay’ feature (currently in pilot).

JioMart services have been made available on WhatsApp from 25 April 2020 in Navi Mumbai, Thane and Kalyan. JioMart is currently operating in these three cities only. However, the only mode of payment currently available is cash.

“In the very near future, JioMart - Jio's digital new commerce platform, and Whatsapp - will empower nearly 3 crore small Indian Kirana shops to digitally transact with every customer in their neighbourhood”- Mukesh Ambani said, CEO, Jio Mart.

A Peril Approaching Grofers, Amazon Now, and Big Basket

According to a report, grocery delivery startups such as Blinkit (earlier Grofers), Big Basket and PepperTap have performed extremely well with enormous funding and exponential revenues in the past couple of years. Realizing the potential, some well-established e-commerce platforms like Paytm and Amazon also began delivering groceries and essentials.

With the entry of the biggest player in the Indian market, a serious threat looms over existing grocery delivery ventures. Besides being a popular brand name, JioMart has some features that lend it an upper hand over its competitors.

Conclusion

When Jio entered the telecom segment, it stirred a revolution and turned the tables. Big shots like Airtel and Vodafone who dominated for years were sent tumbling. A potential revolution is on the cards again because of Reliance's JioMart.

FAQs

What is JioMart's business model?

RIL is offering local merchants an O2O (online-to-offline) marketplace through JioMart. This business model was pioneered by the Chinese e-commerce giant Alibaba Group Holding Ltd. Under the O2O model, a consumer searches for the product or service online but buys it through an offline channel.

Who is JioMart's founder?

JioMart was launched by Mukesh Ambani, India's richest man. Damodar Mall is the chief executive officer of Reliance Retail’s grocery business.

Where is JioMart's service available?

JioMart serves in more than 100 cities in India. To check the availability of JioMart in your area, enter your pin code at the time of ordering.

Does JioMart charge for delivery?

Currently, they do not charge any delivery fee for the orders placed on JioMart.

When was JioMart launched in India?

Jiomart was initially launched in April 2020. It was launched in May 2020 in 200 cities in India.

Which is the parent company of JioMart?

Reliance Retail is the parent company of JioMart.