JioMart unleashes discounts in e-grocery fight

NEW DELHI: Reliance Industries-owned JioMart is taking the fight to the likes of BigBasket, Grofers and Amazon with heavy discounting on groceries as it vies for a piece of India’s growing online market for daily-use items.Staples such as rice, flour, oil, sugar and other essentials are available for a cheaper price on JioMart compared to rivals such as BigBasket. The ecommerce platform also sells loose grocery items such as dal, rice and flour — just like local kirana shops — at prices lower than packaged items, in a bid to target a broader spectrum of customers.The recently launched website claims to sell products at rates 5% lower than the maximum retail price (MRP). For instance, a 280-gm pouch of Maggi noodles is priced at Rs 46 on BigBasket, but costs Rs 43 on JioMart. A 5-kg pack of Aashirvaad atta costs Rs 185 on Amazon and Rs 188 on BigBasket, while it is priced at Rs 175 on JioMart. Similar price differences exist across product categories.Online discounts are a controversial issue and small traders allege that large companies — both foreign and local — use their deep pockets to undercut them.A senior official of Reliance Industries played down its pricing strategy and said the rates for the products available on JioMart are the same as any of the Reliance Retail-owned supermarkets. 76655165JioMart Sourcing from Rel Retail NetworkThe RIL official added that the online platform was currently sourcing and delivering goods from its own network of physical outlets, and maintaining price parity.But the top executive of a rival online grocery company did not agree with the assertion. “They (JioMart) are aggressive with discounts,” he said, asking not to be identified. “”They are sort of a startup in that sense.”JioMart’s aggressive push comes of the back of large fund-raising by the parent company. The Mukesh Ambani-led RIL recently raised $23 billion through a rights issue and by selling stakes in Jio Platforms to several investors, including Facebook, General Atlantic, L Catterton, TPG, KKR, Mubadala and others. The bulk of the proceeds are being used to retire debt, and RIL last week declared that it had become net debt free.“While they have money, they lack expertise in the online grocery business,” said the executive of the ecommerce player quoted earlier. “I am certain they would be looking for acquisitions in that space.”DIFFERENT CONSUMERSAnalysts said Amazon and BigBasket were targeting different sets of consumers when compared with JioMart, hence the difference in pricing strategies.“A BigBasket or Amazon customer will probably be more concerned about safety, and is ready to pay extra for convenience,” said Devangshu Dutta, CEO of Third Eyesight, a consulting firm focused on consumer products and retail.He added that Amazon is a marketplace, and may not have control over prices of goods sold on its platform.BigBasket declined to comment, while Reliance did not respond to emails seeking comment.An Amazon India spokesperson said the platform did not set prices. “Given that we are a marketplace, price of products are determined by over 600,000 sellers who sell on amazon.in,” the person said.

from Economic Times https://ift.tt/38bXHmb