JioMart expands to 200 cities in India as it tries to compete with Amazon and FlipKart

JioMart, the grocery platform owned by Mukesh Ambani’s Jio platforms, extended services to 200 cities over the weekend. Previously, he had piloted deliveries in three areas in and around Mumbai.

The move came just days after Jio – a part of the vast conglomerate of Ambani Reliance Industries – secured more money to fuel the billionaire’s technological ambitions. The company has raised over $ 10 billion in recent weeks, including an investment of $ 5.7 billion from Facebook (FB) which includes a link between JioMart and WhatsApp. This agreement is still in the regulatory approval phase.

“Never waste a crisis, they say!” Damodar Mall, CEO of food retail at Reliance Retail, tweeted on Saturday. Mall added that Chinese e-commerce giant Alibaba (BABA) “flourished” during the 2003 SARS pandemic, something founder and president Jack Ma acknowledged.

But the launch of JioMart “is cause for concern for Amazon and Flipkart, [because they] they’re not very strong in the food sector, “said research analyst Forrester Satish Meena. Both companies launched online food deliveries last year.

Amazon and FlipKart also had difficulty delivering orders across India during the Covid-19 pandemic due to varying levels of restrictions from one city to another, he said.

FlipKart had to temporarily suspend services in March, when the blockade began nationwide, and Amazon had to limit orders in response to rising demand.

Amazon and FlipKart did not immediately respond to requests for comment. Both are currently delivering essential goods to India.

JioMart was launched late last year, with the goal of getting 30 million kiranas, neighborhood moms and pop shops online.

The grocery store is 70% of the Indian retail market and over 90% of the market is disorganized and driven by kirana stores, according to investment research firm Bernstein. The overall retail market is expected to double, from $ 676 billion in 2018 to nearly $ 1.3 trillion by 2025, according to Bernstein.

India’s online grocery market is small in comparison, worth about $ 3 billion this year, according to Forrester. But the company said the number is growing rapidly as the pandemic is rapidly changing people’s shopping habits.

Bernstein and Forrester analysts say JioMart is well placed to upset the online grocery market because it can supply Reliance’s brick and mortar stores. Reliance is the largest retail operator in India. If JioMart manages to get the kiranas online and organized, it will also have a hyper-local logistics and logistics chain that it can use to meet demand.