JioMart a real juggernaut, but needs to broaden its customer base

Facing stiff competition in BigBasket and Grofers, as well as Swiggy and Zomato, thanks to its late entry

Seven months after its quiet launch in may jio mart — Reliance's e-commerce platform — is moving beyond just grocery and foods and entering new segments of apparels and electronics. It has already reached over 200 cities with around 15,000 Stock Keeping Units (SKUs) on offer. However, if you add the two new categories, it has already hit close to 45,000 SKUs.
 

Only Amazon Pantry has a larger coverage (across 300 cities), while BigBasket has more SKUs —  over 18,000. BigBasket is available in 25 cities, while Grofers is present in 27.

Looking at it from a ‘consumer usage’ prism, for 30 days ending December 10, JioMart grabbed 59 per cent share of new users from between itself, BigBasket, and Grofers, with an engagement share of 54 per cent based on daily active users and download scores, according to Apptopia, which tracks such figures.

It has also won a 54 per share of monthly active users (the highest share) in this period and tops the chart with the best day one retention of customers with 26 per cent of them coming again.

However, JioMart’s customer base is still much smaller. A JPMorgan report based on its own and Apptopia’s data, estimates that its reach in terms of app downloads is around 4 million, compared to 34 million of Big Basket and 30 million of Grofers.

Zomato and Swiggy, which have also entered this business,  have reach, based on app downloads, of over 105 million and 89 million respectively.

Based on the app download numbers of Play Store, Jio Mart’s latest numbers as of today stand at 10 million-plus downloads. Reliance Industries, Grofers and BigBasket did not respond to e-mail queries.

BigBasket enjoys the advantage of consistent repeat purchases. It has the best 30-day retention among its competitors, with 6 per cent of consumers coming again, according to Apptopia. It also has the stickiest users with 32 per cent of its monthly active users coming to the site every day.

In the e-commerce space dominated by Flipkart and Amazon, JioMart has been a late entrant. However, it is targeting the grocery space which is worth $400 billion. Given that the share of online retail is less than 1 per cent, there is a large potential upside. Its next target is clearly apparels, which is $70-billion market with an online penetration of 10 per cent already. 

Moreover, electronics is the most matured market, with an online penetration of over 30 per cent, says JPMorgan — dominated by Amazon, Flipkart, and also Reliance Digital — which is much smaller with around 5000 products. 

Grofers and BigBasket dominate in the grocery space. The latter is in talks with the Tatas for a buyout which, if it happens, will give BigBasket more financial muscle.

Amazon and Flipkart have also been expanding their presence and now Swiggy and Zomato have joined the race.

For instance, Zomato Market is cashing in on its existing food delivery service. Launched during the lockdown, Zomato Market is already available in more than 85 cities. Swiggy Stores is available in 125 cities, says J P Morgan.

One advantage that JioMart enjoys is a large physical retail presence, which includes a cash and carry operation which will only be strengthened once its acquisition of the Future group’s assets is cleared.

It has also acquired Grab A Grub to improve logistics and is looking at wooing over 18 million small kirana shops for last mile delivery.

Further, it is leveraging its 400 million mobile customers by integrating JioMart into its popular My Jio app, used by some 300 million. The company is also working with WhatsApp to integrate it with JioMart which would give it access to 400 million customers (though some would overlap with its own mobile customers).

J P Morgan estimates the market, especially after the huge shift in more customers moving online, is set to grow a staggering 67x and reach revenues of over $113 billion in the next 10 years with an assumed 10 per cent penetration of online grocery.