India’s Reliance Industries Ltd. (Reliance), which is owned by Asia’s richest person Mukesh Ambani, has indicated to start launching its long-awaited online grocery service, JioMart, which recently raised funding from several tech to investment firms including Facebook.com (Facebook).
The entry of JioMart would make the existing competition of e-commerce services tougher in the huge Indian market that has been dominated by its rivalries such as India’s unit of Amazon.com (Amazon) and Walmart Inc.’s Flipkart.
Reliance’s Retail Arm, JioMart
JioMart, the e-commerce venture of Reliance’s retail arm, is likely to begin its free express grocery delivery to a million Indian population amid the health crisis caused by the widespread COVID-19 pandemic.
Damodar Mall, the chief executive of the grocery retail at the Indian conglomerate group, said on Twitter late on Saturday, JioMart would deliver groceries in more than 200 towns across the country. However, Mumbai-headquartered Reliance has not mentioned about JioMart’s launch during the fundraising of selling $7 billion in new shares.
Reliance announced its new online retail service late last year and said it needed to collaborate with local retailers to provide over 50,000 grocery products to millions of customers in India. Ambani said in August 2019, that the new venture would connect three crores offline retailers and provide its online service over 20 crores households in the country. However, offering free delivery service with help from neighborhood mom-and-pop stores would pose a formidable challenge to local rivals, which have been betting big on groceries for their growth.
Concerning the surge of the coronavirus cases in India and its likely impact on the launch of the new retail service, Mall said in his tweet, “Never waste a crisis, they say!” adding that “A wise colleague mentioned today, ‘Alibaba also flourished starting from the SARS crisis.’”
Investments on JioMart
Since last month, Reliance has been raising funds for its retail unit and several companies have invested a huge sum of money for the new service. Reliance is constantly on a fundraising spree with Jio Platforms, which houses telecoms ventures Jio Infocomm, and has accumulated a massive $10 billion from investors including Facebook, Silver Lake Partners (Silver Lake), KKR & Co. Inc., and General Atlantic in a month.
Late last month, Reliance launched a small pilot of JioMart deliveries in select areas of the Indian financial capital Mumbai, days after it announced that Facebook would invest $5.7 billion for acquiring a 9.99 % stake in the company’s digital unit, Jio Platforms. With the partnership deal, Reliance would be able to capitalize on its new retail service by focusing on over 400 million active users for Facebook’s WhatsApp messaging service in India.
Silver Lake has invested $750 million early this month to acquire some shares in Reliance’s unit and in nearly two weeks of the first investment from Facebook, Reliance had raised combined funding of $8 billion after completing third deals. This week, several investment companies have made deals with Reliance for its retail unit including KKR & Co. Inc. announcement of $1.5 billion on May 21, 2020.
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