Reliance JioMart is an online grocery delivery service housed under Reliance Retail, targeted to the kirana network by operationalising 21 smart hubs and 34 staples hubs across India .The business model is to partnering with a number of kirana stores in the selected states to offer online grocery delivery.
JioMart is also offering a number of discounts and promotions to attract customers. The company is targeting to leverage the unorganised local Kirana stores in the country, whose income is from the daily selling. The company is also leveraging its vast network of offline stores to reach customers.
The company has also installing TV screens inside partner kirana stores to promote products and offers of local brands. The TVs were showing customised ads as per region and language, and enabled kirana partners to benefit from an additional revenue stream.
Initially, the kirana partners gained significantly from digitally marketed promotions, offers and new launches in the catchment area. Initially, it has increased acceptance of the kirana proposition among several small-and-micro partners.
Now all it shows, JioMart is not without its challenges. The company is facing stiff competition from other online retailers, such as Amazon and Flipkart. It is also facing regulatory challenges, as the Indian government is concerned about the growing power of e-commerce companies.
The announcement of layoffs are likely to have a significant impact on the JioMart employees who have been affected. Many of them are likely to face financial hardship and may have difficulty finding new jobs.
The company has reportedly asked over 1,000 people on the ground, including 500 executives at its corporate office, to resign over the past few days and expected to cut 9000 more jobs in coming months. Sources said, the company has set the plans to close down a majority of its fulfillment centers, with over half of the 150-plus centres that cater to local stores set to be shut down
All it shows the move is part of the Indian retail giant’s strategy to enhance its profit margins. This decision aligns with the recent completion of Reliance Retail’s acquisition of the Indian cash and carry business from German retailer Metro AG for a total of $344 million.
The layoffs are also a sign of the challenges that e-commerce companies are facing in India. The market is highly competitive and margins are thin. This is likely to lead to more layoffs in the future.
JioMart is a major threat to traditional kirana stores. The company is well-positioned to succeed in the Indian market, but it faces a number of challenges. It will be interesting to see how the company fares in the long run.
