RIL looks to tap kirana stores
THE MOM-AND-POP STORES ARE INCREASINGLY TURNING TO JIOMART TO STOCK UP ON BRANDS.
MUMBAI: For eight straight days, household goods salesman Vipresh Shah has failed to sell a single pack of Dettol soap to the storekeepers who have been buying from him ever since he took over his family business as a teenager, 14 years ago.
The 31-year-old said he lost $2,000 of his own money as he discounted products to match prices on Jiomart, the app rolled out by Reliance chairman Mukesh Ambani in his drive to revolutionise retail in India.
Up and down India, the momand-pop stores that account for four-fifths of a near-$900 billion retail market, are increasingly turning to Jiomart to stock up on foreign and domestic brands.
Just as Ambani has disrupted the country’s telecoms industry, the tycoon is intent on shaking up retail distribution, taking on US e-commerce giants like Amazon and Walmart Inc.
The country has around 450,000 traditional distributors, who have legions of salespeople to service every corner of the vast nation, including 600,000 villages. They typically earn a margin of 3-5% on product prices and mostly take orders physically once a week, making deliveries to retailers within a couple of days.
But Reliance’s model throws a wrench in that supply chain: The kiranas, can order goods on Jiomart Partner with deliveries promised within 24 hours. Reliance also offers training on ordering, credit facilities and free product samples for affiliated kiranas’ customers.
That means hundreds of thousands of salesmen representing consumer giants like Reckitt, Unilever and Colgatepalmolive, face an existential threat to their business, according to interviews with salespeople, 20 distributors and a trader group with members across India.
Many of the distributors said they have slashed their workforce or vehicle fleet, seeing their sales from door-to-door agents drop 20-25% in the last year as shopkeepers partner with Reliance.