Reliance Retail Ltd.'s JioMart, launched in multiple cities last month, has temporarily suspended delivery from neighbourhood stores, according to Jefferies India.
It's not able to serve customers through its network of local retailers for the past two weeks and one of the reasons could be Covid-19, the brokerage said citing its conversations with seven retailers in Mumbai who were part of the pilot.
The shutdown is temporary and the company is supplying consumers from its own stores, the report said. Reliance Retail has yet to respond to BloombergQuint's emailed queries.
Mukesh Ambani, Asia's richest man, launched JioMart last month amid the world's strictest lockdown to contain the new coronavirus outbreak. And he expanded delivery operations across 200 cities as part of his triple play of offering data, content and online retail. Besides ordering from Reliance Fresh and Reliance Smart, the service allows consumers to buy from kirana stores through WhatsApp. The company partnered with messaging app's parent Facebook Inc., which picked up $5.7 billion stake in Jio Platforms Ltd., the holding arm of Ambani's digital and telecom assets.
“The current environment may not be very conducive for an ambitious project of linking up traditional grocers, particularly when several areas in Mumbai (where the pilot was conducted) were facing Covid-19 crisis,” Jefferies India said. It appears that this is just a timing issue and JioMart would eventually link up the traditional channel to gain scale and efficiency as the potential remains immense, it said.
Also Read: How Facebook's Reliance Deal Upends a $1 Trillion Digital Arena
Execution holds the key and Reliance Retail will need micro-market strategy, feet on ground and customer- and consumer-centric approach for a successful and scalable model, the brokerage said.
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