AHMEDABAD: Reliance Jio, after successfully disrupting India’s telecom industry, is preparing to wade into the crowded ecommerce market leveraging its vast network and hundreds of millions of subscribers, according to two persons aware of matter. The company is working with corner stores, or ‘kiranas’, and consumer brands to create an operational model that will enable shoppers to buy at neighbourhood shops using digital coupons via its Jio Moneyplatform or text messages, they said. A pilot project involving several stores and leading brands is ongoing at Mumbai, Chennai and Ahmedabad and a larger rollout is likely next year, they said.
Given Jio’s rapid growth to gain 132 million subscribers in about a year, its entry into online-to-offline ecommerce should put on notice payment companies including Paytm and PhonePe that are also forging collaborations with corner stores and other entities. These firms, though, have the strong backing of investors to aggressively expand their networks.
Ecommerce giants Amazon and Flipkart, too, are investing significant sums in their grocery delivery businesses.
Reliance Jio declined comment to a detailed emailed questionnaire from ET. The online-to-offline business model is strategic for a new digital entrant like Jio, as of India’s $650-billion retail industry, only 3-4% is ecommerce and another 8% is controlled by organised retailers such as Shoppers Stop and Big Bazaar. The remaining 88-89% of the market rests with smaller entities such as corner stores.
Jio’s ecommerce business model has not been finalised and will incorporate several changes and additions based on inputs from the pilot project, said a Jio executive, one of the persons mentioned above.
For the pilot, Jio has roped in ITC, Wipro, Dabur, Tata Beverages, Godrej Consumer Products and Amul, this person said. ET couldn’t independently verify this.
“In total, 15-20 brands have been enrolled for the pilot project,” the executive said. Jio will initially tie up with consumer brands for its platform while simultaneously connecting with corner stores through the brands’ distribution networks, he said.
Under its present plan, Jio will send digital coupon codes for a particular brand’s product to its mobile users, who can use the coupons at neighbourhood stores to buy those brands. Stores enrolled by Jio will be equipped with software on their phones or tablets to read these digital coupons.
Jio will also allow partner stores to use its platform for stock clearances or to send promotional offers to their customers, which could include those who are not Jio subscribers.
“There will be seamless connectivity between manufacturers and retailers, allowing for better and timely offers for scaling up product sale,” said the Jio executive.
“Geo-tagging can also be done and sales in leftover stocks can be pushed for a given geographical area,” he said, adding that this will allow brands to spur their retailers to be pro-active in clearing stocks. Jio also plans to introduce a so-called missed-call facility that will allow it to relay to shoppers the promotional offers in a specific area, he said.
The company will charge brands a fee for using its platform for ‘below the line marketing,’ which is a money-saving advertising option for companies involving the distribution of leaflets and other such promotional material. Jio will not burn any of its own money for offering discounts on products, said the persons aware of the company’s ecommerce plans. The Jio Money app currently hosts ecommerce brands but with this broader move, Jio is seeking to rope in more brands whose products are readily available at neighbourhood stores.
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