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MUMBAI: The ubiquitous kirana shops in the Indian neighborhood are not only on consumers’ minds, given the closure, but have also caught the attention of billionaires Mukesh Ambani and Mark Zuckerberg.
On Wednesday, the companies signed a trade pact to accelerate Reliance Retail’s JioMart platform by connecting nearby kirana stores with customers.
The covid-19-induced blockade, ironically, has given family stores a new opportunity while hitting e-commerce platforms. The two companies now want these small kkuna kirana merchants and stores to provide their products and services to end-users, who number in the billions, through transactions through Reliance’s JioMart using Facebook’s WhatsApp.
“Our focus will be the 60 million micro, small and medium enterprises in India, 120 million farmers, 30 million small traders and millions of small and medium enterprises in the informal sector,” Reliance Jio said in the statement announcing the agreement.
India’s Kirana stores represent 80% of the country’s retail industry, and for Mukesh Ambani of Reliance Industries, it’s a great opportunity.
“The new business is a massive new $ 700 billion business opportunity … New Commerce’s primary goal is to completely transform the disorganized retail market,” Ambani had said last August at the company’s annual general meeting.
Reliance Retail is India’s largest retailer by revenue and caters to the entire consumer basket of groceries, fashion and lifestyle, and consumer electronics.
Of these segments, the supermarket is considered the anchor of growth. “The grocery business is expected to take center stage in Reliance Retail’s growth narrative for fiscal year 19-22 as expansion plans for the profitable inventory format ‘SMART accelerate,” HDFC Securities said in a report from April 14.
Reliance Retail recently acquired Coimbatore’s SKDS department store, which also validate its increased focus on inventory format.
The company has launched a new SMART point in a small store format with a presence in residential neighborhoods and so far 18 stores have been launched in Navi Mumbai, Thane and Kalyan. These outlets will double as last mile delivery centers for online fulfillment, and will also act as collection points.
RR’s ‘New Trade’ initiative connecting Kirana stores to a consumer base and managing their inventory through an M-POS (monile point of sale) device is expected to reduce last mile delivery costs also, since the kirana stores act as delivery agents
Reliance Retail, in December 2019, launched JioMart in a soft version, naming it “Desh Ki Nayi Dukaan”. JioMart currently serves online shoppers in the Navi Mumbai, Thane and Kalyan suburban areas.
