Earlier Reliance Industries Limited (RIL) Chairman Mukesh Ambani had announced that his company is working on creating the world’s largest online-to-offline new commerce platform that would integrate the power of Reliance Retail’s physical marketplace with Jio’s infrastructure and services. In order to boost this ecommerce venture’s last-mile connectivity, Ambani plans to utilize the telco’s 5,100-plus smaller Jio Point stores in more than 5000 cities and towns, The Economic Times reported.
Reliance Retail would set up ecommerce kiosks in the Jio Point stores from where store executives will help consumers place orders, senior executives aware of the development told the daily. The company will undertake assisted sales of everything from daily provisions like sugar, pulses, soaps and biscuits to apparel from these stores leveraging the telco’s distribution network, which already reaches these stores to supply SIM cards, mobile handsets and accessories. They added that the ecommerce venture is likely to take off by April next year.
“Potentially, they can sell anything using this network which has a shelf life and doesn’t require installation service. The customer can pick up the product from the Jio Point or store executives can deliver it to them [at their doorsteps],” said a source. The idea is to reach out to 95 percent of India’s population directly – including consumers without Internet access, as well as those who have never shopped online – which will only be possible through the Omni channel route.
Jio Point stores already account for 10 percent of Reliance Retail’s overall consumer electronics sales, so the company now reportedly plans to extend the same model to grocery, personal care, apparel and shoes. “The company wants to have a retail presence through ecommerce in towns with population over 10,000, which would mean a presence across 95-98 percent of India’s consumer base,” the source added.
Moreover, given the rapidly mushrooming Jio Points, Reliance Retail is looking at a huge distribution network. According to the daily, Reliance adds over 500 new such stores every quarter and is targeting 50,000 Jio Point stores across India, which will operate as customer sales and service touch points for Jio.
Reliance Retail’s plans to tap the Tier 2 and beyond markets is understandable given the market’s potential. According EY India’s latest report, the rural market for e-commerce in India is likely to be a $10-12 billion opportunity in the next four years. The report further estimated that total ecommerce sales in the country are likely to grow at 32 percent CAGR between 2017 and 2021.
But Ambani will have a stiff fight on his hands, with biggies like Amazon India and Walmart-backed Flipkart also aggressively participating in the Omni channel battle. Amazon, for instance, launched Project Udaan in 2015. This is the e-tailers assisted shopping programme for rural and semi-urban areas that has reached out to more than 12,000 mom-and-pop stores. Then there’s the ‘I Have Space’ programme under which Amazon India partners with local store owners to provide last mile pick-up and delivery services to customers.― Business Today