JioMart Launches on WhatsApp

Facebook invests $5.7 billion in Jio Platforms

A couple of weeks ago, Reliance Industries and Facebook inked an agreement that will connect small businesses in the JioMart e-commerce platform with Facebook-owned WhatsApp, enabling them to interact with their customers and to accept digital payments. This service has started to roll out, although it’s limited to test use. The launch comes on the heels of Facebook’s investment of $5.7 billion in Jio Platforms, the technology subsidiary of Reliance Industries.

JioMart is a grocery delivery platform announced in January 2020 by Reliance Industries chairman Mukesh Ambani. It’s positioned as the company’s online-to-offline retail initiative. JioMart aims to link neighbourhood shops and merchants with consumers by harnessing the technology capabilities of Jio Platforms. It will allow users to choose from more than 50,000 grocery products, and will offer free home delivery with no minimum order value as well as express delivery.

The online-to-offline initiative could potentially change the landscape of retail, given WhatsApp’s sheer dominance among instant messaging apps in India: more than 400 million customers in the country use WhatsApp.

Mr Ambani said that nearly 30 million neighbourhood stores in the near future will be able to transact digitally with consumers through JioMart. The online portal has been launched as a pilot in Mumbai’s suburbs and will be expanded to the rest of the country over time.

Orders are placed through WhatsApp and fulfilled by Reliance. Since early 2020, Reliance had started roping in shops to its network by offering them merchandise, working capital loans and digital payment solutions including point-of-sales machines. The coupling of JioMart and WhatsApp will prove to be a differentiator, as consumers are familiar with WhatsApp’s easy-to-use interface.

In the past two months, BigBasket and other Indian grocery delivery companies haven’t been able to keep up with the surge in orders caused by the coronavirus pandemic, owing to a lack of manpower, low supplies from providers of fast-moving consumer goods and inadequate coordination on the ground. This has placed neighbourhood stores at the forefront as they facilitate customer access to daily essentials.

We believe that, by partnering with WhatsApp, Reliance is trying to mimic Tencent’s position with its WeChat messaging app. WeChat has grown to 1.15 billion customers and holds a huge position for e-commerce and payments in China thanks to mini apps as part of its service. It had a turnover of $115 billion in 2019 in China spanning online retail, food delivery, ride-hailing, bill payments and ticket bookings.

The ambitious deal between Reliance and Facebook will create synergies not only in digital commerce but also in digital payment systems for both companies. Facebook has already been using WhatsApp for payments and business transactions.

Reliance isn’t the only company in India to announce a partnership with local neighbourhood stores. Amazon’s Indian arm recently revealed an initiative that will enable small and offline retailers to use its platform to sell their products and earn additional income. India’s neighbourhood stores account for about 80% of the country’s retail industry, and Reliance Industries sees this as a massive opportunity to take on Amazon and Walmart-owned Flipkart.