RIL to go for more acquisitions to boost JioMart, take on Amazon, Flipkart

Speculation had also mounted of possible acquisitions of Urban Ladder and Milkbasket in online furniture and grocery delivery spaces respectively, though the deals haven't fructified yet

Reliance Industries (RIL) will look at more acquisitions to strengthen its new commerce venture JioMart, part of the ret­ail unit, the company said in an investor update on Friday. 

The statement acquires significance as Amazon and Flipkart are gearing up to take advantage of the digital dividend that the Covid-19 pandemic has given e-tailers. Amazon has set aside an additional $1 billion for investment in India, while Flipkart raised $1.2 billion from Walmart in July. 

RIL acquired online pharmacy Netmeds in August and will add the pharmacy channel — apart from categories such as fashion, lifestyle and electronics — to the JioMart cart in the future, it said. 

The company has also said it has integrated acquisitions from 2019 into Reliance Retail — including Grab (last-mile logistics), C-Square (analytics and resource planning), NowFloats (software solutions for SMEs) and Fynd (fashion e-commerce) — to strengthen its online capabilities. Food, beverages, fast-moving consumer goods across home, personal and baby care, fresh food items such as fruits, vegetables and dairy products are part of the JioMart basket currently. 

Experts say the company will target niche players within these categories to beef up its online play. For instance, in July, Reliance Brands, part of Reliance Retail, picked up entrepreneur Ronnie Screwvala’s 15 per cent stake in fashion start-up Zivame and is looking to increase its holding in the firm. The acquisition will strengthen its omni-channel play in fashion. 

There was speculation of the possible acquisitions of Urban Ladder and Milkbasket in the online furniture and grocery delivery spaces, respectively, though the deals haven’t fructified yet. Milkbasket has since clarified that it has no plans to sell and is looking at an initial public offering to raise funds. 

Getting smaller firms to either tie up or sell out will be a critical part of JioMart’s strategy, said analysts, as it seeks to scale quickly in the online market. 

A Goldman Sachs report says JioMart is poised to sell half of all online groceries in India over the next few years, led by significant investment by the company. 

Reliance Retail has already raised Rs 37,710 crore in eight rounds, offloading nearly 8.5 per cent stake in the last two months. While the company did not provide any further updates on its retail divestment plans on Friday, it said it remained committed to growing the business, including JioMart. 

The online platform is already clocking over 400,000 orders per day since it went live across 200 cities in May. RIL said kirana partnerships had been extended to 20 cities.