Retailers typically deal with multiple distributors. A majority of the retailers engaged with more than 10 distributors.
Nearly 37% of JioMart partner retailers dealt with 15 plus distributors and 55% dealt with 10-15 distributors.
“One-stop source of product range” was another parameter while deciding on engaging with JioMart as a distributor for 73% of the respondents, the survey showed.
JioMart has also started a ‘Jio Smart Kirana Program’ wherein it ensures 3% additional profit margins on all products ordered from JioMart (app or web), free signboard for the store with JioMart-powered signage, doorstep delivery and preference in ordering and delivery of products as well as free inventory management software.
Currently, JioMart has 2 million partner stores, as per RIL’s AGM disclosures, and it targets to onboard 10 million partner stores over the next five years.
Earlier surveys conducted in Mumbai (December 2020) and Bengaluru (February 2021) had shown some skepticism among retailers on JioMart’s business-to-consumer strategy.
But the sentiment seems to be improving as the company fine tunes its business model, the study said. Retailers in Mumbai felt “positive” about JioMart’s B2C business intentions and its attempt to bring retailers under its coverage.
JioMart engages with small retailers in two ways: acting as a distributor by supplying products to retailers, and utilising the small store network to fulfill its orders for JioMart’s B2C portal.
The B2B and B2C services offered by JioMart are bundled. In order to receive B2C orders from JioMart’s portal, a retailer also needs to have a B2B partnership with JioMart.
JioMart’s annualised revenues earned per retailer is estimated to be in the range of Rs 7 lakh for Mumbai-MMR.
JioMart’s intent to launch its distribution service on a large scale can help it amass sizeable revenues, according to Kotak. Currently, JioMart’s penetration stands at 37% in Mumbai versus Udaan’s 36%.
According to Kotak, the bulk of its orders on digital platforms come from tier II cities and beyond.
“While the proportion of modern trade has been on the rise, we believe Reliance Industries would want to integrate its Reliance Market offering with its network of kirana stores, thereby disintermediating the existing value chain (company–distributor–wholesaler–stockist–retailer).”
The brokerage expects the business to be “an important feeder to the digital commerce business and can significantly aid supply aggregation in a fragmented market”.
Notably, the JioMart app sees about 19.2 million monthly visits. This compares with just 1.2 million for DMart, 10.3 million for BigBasket and 3.7 million for Blinkit.
