After productively disturbing telecom industry of India, Reliance Jio is gearing up to wade into the packed ecommerce industry using its thousands of millions of users and vast network, as per 2 sources well known with the matter. The firm is operating with corner shops, or “kiranas,” and user brands to make a working model that will allow users to purchase at neighborhood stores utilizing digital coupons through its platform of Jio Money or text messages, they claimed. A pilot project comprising various shops and top brands is in progress at Chennai, Mumbai, and Ahmedabad and a bigger rollout is expected in 2018, they claimed.
Considering rapid growth of Jio to expand 132 Million users in almost 1 Year, its entry into “online to offline” ecommerce might threaten transaction firms comprising PhonePe and Paytm, which are also creating collaborations with other entities and corner stores. These companies, although, have the strong support of investors to forcefully increase their networks. Ecommerce majors Flipkart and Amazon, too, are spending noteworthy sums in their businesses for grocery delivery.
Reliance Jio refused to comment on a comprehensive emailed survey from the media. The “online to offline” business model is tactical for a new digital applicant such as Jio, as of $650-Billion retail sector of India, only 3% to 4% is ecommerce and additional 8% is managed by organized retailers such as Big Bazaar and Shoppers Stop. The rest of the 88% to 89% of the market rests with tiny entities such as corner shops.
Ecommerce business model of Jio has not been finalized and will include various additions and changes on the basis of inputs from the pilot project, claimed an executive of Jio as well as one of the sources cited above. For the pilot, Jio has involved Wipro, ITC, Tata Beverages, Dabur, Amul, and Godrej Consumer Products, this source claimed. “All in all, 15–20 brands have been registered for the pilot project,” claimed the executive. Jio will originally tie up with user brands for its marketplace while connecting with corner shops at the same time via the distribution networks of the brands, he claimed.