Jiomart Case Study: How It Is Leading in ECommerce 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 in 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 477.94 million subscribers as of November 2024. 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 Benefitted from the Jio-Facebook Deal
JioMart's 30-Minute Delivery

How JioMart Works?

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 them to the customers.

JioMart began functioning in January 2020 and is available in over 200 cities and towns across India, including Mumbai, Chennai, Kolkata, Hyderabad, Delhi, Bengaluru, Jaipur, and Trivandrum.

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

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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 '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 a 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 time, 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.
• AI-Powered Inventory Management: JioMart leverages artificial intelligence to monitor inventory in real-time, ensuring better product availability and faster deliveries, eliminating the hassle of out-of-stock items.
• Hyperlocal Approach: JioMart expanded beyond major cities by partnering with local kirana shops, reaching the core of India to ensure quick deliveries, no matter the location.

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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.

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.

JioMart, Reliance Retail’s e-commerce platform, has tripled its number of sellers compared to 2023, as shared in its December 2024 quarter results. While groceries remain its main focus, JioMart is now working to increase its share of non-grocery items.

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 pick up the order from the store.

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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 Benefitted from the Jio-Facebook Deal

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

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.

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JioMart's 30-Minute Delivery

Grocery delivery startups like Blinkit (formerly Grofers), Big Basket, Zepto, and Swiggy Instamart have seen remarkable success in recent years, driven by significant funding and rapid revenue growth. Recognizing the market's potential, major e-commerce players like Amazon have also entered the grocery and essentials delivery space.

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.

The company plans to deliver orders in 30 minutes as quick commerce grows popular.

Next month in December 2024, it will start 30-minute delivery in the top eight metros and later expand to 20-30 cities in phase one. Eventually, it will cover the rest of the country.

Deliveries will be managed through its 3,500+ stores. However, JioMart won’t open dark stores or compete in the 10-20 minute delivery race.

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. JioMart's business model showcases its ambition to dominate India's e-commerce space by expanding Reliance's vast retail network, focusing on groceries, and steadily focusing on quick commerce, making it a key player in the digital commerce ecosystem.

FAQs

What is JioMart?

JioMart is Reliance Retail's e-commerce platform offering groceries, essentials, and other products online.

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 founder?

Mukesh Ambani is the owner of JioMart.

Does JioMart charge for delivery?

JioMart charges a delivery fee for orders under INR 250, but not for orders over INR 250 or new customers' first three orders.

When was JioMart launched in India?

Jiomart was initially soft-launched in 2019. It was fully launched in May 2020 in 200 cities in India.

Which is the parent company of JioMart?

Reliance Retail is the parent company of JioMart.