It's been just over seven months since Amazon's (NASDAQ:AMZN) rival in India -- the Reliance Retail-owned JioMart -- started its services in India. The homegrown online grocery retailer had conducted a pilot run in limited locations in January this year before spreading its network to 200 cities in the country in the space of just four months.
After initial hiccups, JioMart finally seems to be finding its feet in India's e-commerce space. JioMart and Reliance Retail parent Reliance Industries recently pointed out that the e-commerce platform is now delivering over 400,000 orders daily. This comes just a couple of weeks after Reliance chairman Mukesh Ambani said that JioMart was processing 250,000 orders a day.
That rapid growth doesn't seem surprising as the JioMart app went online on iOS and Android last month, increasing the platform's accessibility as ordering items was earlier restricted to just the website. The app was downloaded 1.5 million times in two weeks. Amazon needs to be concerned about this as its online grocery business has been doing well in India, and JioMart could dent some of that momentum. Let's see how.
JioMart's rapid expansion isn't over yet
It hasn't taken long for JioMart to leave behind India's existing online grocery retailers such as BigBasket, Grofers, and Amazon Pantry. BigBasket reportedly fulfills around 250,000 to 300,000 orders a day. Amazon Pantry and Grofers are further behind with 100,000 orders processed daily.
But don't be surprised to see JioMart keep up its terrific growth as it plans to recruit more mom-and-pop stores to increase its reach in India. Entrackr, an Indian publication that covers the country's technology space, reports that JioMart is currently partnering with 13,500 local mom-and-pop stores in India. That number could swell to nearly 30,000 by the festival season that falls in the months of October and November. For comparison, Amazon is currently partnering with 11,000 such stores.
The publication also anticipates that JioMart could be fulfilling 500,000 orders by September, a milestone that isn't very far off now. Goldman Sachs is also quite upbeat about JioMart's prospects in India's online grocery market, estimating that the new entrant could end up cornering half of the space by 2024.
JioMart has the necessary infrastructure that could help it take the lead in this space. Reliance Retail has nearly 11,000 locations in the country spread across 6,700 cities and 24.5 million square feet of retail area. Reliance is looking to leverage this vast network to quickly fulfill grocery orders and also supply the local mom-and-pop stores.
If that's indeed the case, Amazon could face stiff competition in online grocery sales in India, a market that's expected to hit $29 billion in revenue by 2024. But that's not the only danger for the e-commerce giant as Reliance has designs of entering other categories, as well.
Amazon could face a bigger threat
JioMart aims to expand from the grocery and food segments into fashion, electronics, and healthcare, as well. Like with groceries, it may not take long for the platform to boost its presence in those areas, as Reliance already has the offline infrastructure in place.
For instance, there are more than 8,000 Reliance Digital stores in India selling a broad range of consumer-electronic items including televisions, washing machines, gaming consoles, and smartphones, among other things. Similarly, the company has 777 retail stores spread across India that sell clothing and fashion accessories under the Reliance Trends chain.
Amazon will now have to counter another big threat, as India's e-commerce market is all set to become a three-pronged race. Walmart-owned Flipkart has already been providing tough competition to Amazon, with both companies reportedly sitting on near-identical market share in 2018, as per Forrester Research.
JioMart looks well-placed to upset that balance. It could give its American rivals a tough time, considering its impressive pace of growth and plans to expand into newer categories to corner a bigger share of India's fast-growing retail space.