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The Oyofication of Kiranas - Why Jio Mart’s 48-hr transformation can be a game changer

In one of his most popular lectures, Oyo founder Ritesh Agarwal discusses how Oyo standardized not only the hotels they offered customers, but also the processes of the transformation, that enabled them to do this fast and at scale, while significantly improving customer experience.

In their recently concluded AGM, Mr Mukesh Ambani announced that Reliance Retail via Jio Mart will transform the existing retail landscape in to an omni-channel platform. With this move, JioMart not only expunges the borders between General Trade, Modern Trade & E-comm channels, it also amalgamates them into a single, immersive experience for their end consumers.

In today's post we discuss the value this brings to the different counter-parties, the impact this will have on competition, and the value of the 48 hour transformation.

What are kiranas up against?

In the last 2 decades, the Kiranas have been competing against multiple adversaries to maintain market share. Other than the internal problems around SKU availability, diminishing margins, GST compliance and trade scheme opaqueness, they also faces some strong adversaries.

Competition against Modern Trade channel (Value & Variety): - Higher product range availability - Deeper discounts directly to end consumers

Competition against E-comm channel (Convenience): - Availability of Digital payment facilities - Convenience of Home delivery + COD

The main thing kiranas had going were proximity (there is probably one quite close to where you live) and the deep relations that they developed with customers over the years, which not only led to greater loyalty, but also allowed for practices that would be tough for competitors to replicate, including extending credit lines to their customers based on trust.

JioMart tries to solve some, if not all of the kirana problems through its offering.

The value JioMart adds

The value propositions offered to the customers are:

  1. Wide range available – 50K+ SKUs in partnership with major FMCG brands

  2. Most of these SKUs will be stored in local Fulfillment Centers & delivered to Kiranas within 24 hrs of ordering by consumer.

  3. Discount coupons from brands – applicable when consumers purchase from their nearest Jio Mart enabled Kirana stores

  4. Additional Order collection channel – Jio Mart enables Kiranas to accept online orders as well, in addition to their existing walk-in & on-call orders

  5. In app promotion to convert/redirect traffic from online shoppers to retailers

  6. Order fulfillment – This is done in 2 ways - Products available at retailer: same day delivery - products not available at retailer: delivery to retailer within 24 hrs of ordering

Value addition from Jio Mart for retailers:

  1. Opportunity to earn extra profits – Retailers will be able to earn even on those products which are not kept in their shop

  2. POS – facility to receive online payment from multiple sources in one device ex: UPI, Debit Card/Credit Card, Net Banking, Sodexo.

  3. Provision of Khata facility – Enabling retailers to keep a digital track of credit given to customers with option for digital settlement of dues

  4. Training provision for delivery boys – To ensure good service provided to customers to strengthen relationships

  5. Credit – All orders by retailers are to be on credit

What the 48 hour transformation does? With a clear value proposition for both the kiranas and the customers, the only question is how fast the initiative can scale. We believe the 48 hour standardized transformation will be the most critical portion in the scaling strategy here, allowing it to enter newer cities and grow faster in existing ones faster than potential disruptors who might want to come in can.

If you would like to read a long form piece on what strengthens the JioMart moat, we've covered it here.


About the Author: The post is written by our EZPP Partner Jigmee Sherpa with edits from our editorial team. Jigmee is a graduate from IIM Calcutta, currently working with Udaan


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