RIL's offline plan to push new e-commerce venture

With more than 10,000 stores under the various Reliance retail brands and over 2.5 million kirana stores already tying up with it, Jio’s online marketplace would have the biggest hyperlocal logistics network in the country.

Illustration: Dominic Xavier/Rediff.com

Mukesh Ambani-led Reliance Industries’ upcoming ‘new commerce’ platform is being linked to the biggest chain of offline retail and kirana stores in the country, which will enable it to deliver products ranging from groceries to clothing to electronics within hours.

With more than 10,000 stores under the various Reliance retail brands and over 2.5 million kirana stores already tying up with it, Jio’s online marketplace would have the biggest hyperlocal logistics network in the country.

According to sources in the know, more work on logistics development is happening on the ground.

“The idea is to bolster offline partnerships with kirana stores as they are the key to the whole initiative.

"The plan also includes opening more stores.

Over the next few months, more than 2,000 stores might be opened under various brands, including Reliance Fresh, Digital, Trends and Footprint, among others.

"By the end of the year, the company would have a vast network of stores that would form the logistics network for Reliance,” said a source.

Reliance is also looking to add another 50,000 kirana stores to its network in the coming months.

In the near future, the company plans to make grocery and FMCG deliveries within two hours, five-hour delivery for fashion and electronics, and next-day delivery for bigger electronics items a norm.

Sources said the company might not charge extra for swift delivery as the process would be highly localised.

“Groceries would be delivered by the local kirana store, while electronics might be through a nearby Reliance Digital or an affiliate store.

"Items for any kind of deliveries would be sourced mostly from an area within 5-km radius from where the order has been placed.

"This would reduce the cost of delivery as well as time,” added the source.

The secret sauce in RIL’s e-commerce recipe is kirana stores and its GST services.

It acquires kirana stores by offering them GST services attached to a PoS machine and then makes them their correspondent in the field.

While some of the PoS machines have been given to a small set of kirana stores, the company is yet to start a large-scale trial run.

Industry experts believe that Jio’s new commerce plan is similar to Alibaba’s rural China initiative.

“The Mukesh Ambani-led company wants to go to kirana stores, which have a captive audience and loyal customers.

"The relationship customers have with these stores, and those who run these stores, goes back decades, and in some cases even generations,” said a senior analyst with an international consultancy firms.

There is an inherent trust factor here.

Both know the other won’t cheat him.

RIL plans to utilise this trust to promote its products via shop owners.

Once the customer starts to appreciate the price and is looking for something better, the store owner would introduce Jio’s apps to him.

Kirana store owners themselves encourage these customers to download these apps and use them.

When it comes to e-commerce, they encourage customers to select their stores as delivery hubs.

After the customer places an order, the retailer handles last-mile delivery.

And because the retailer has already tied up with RIL as its distributor, RIL uses these deliveries to ferry e-commerce packages too.