Investment bank and financial services company Morgan Stanley expects ecommerce to account for 15% of Reliance Retail’s estimated $19 Bn worth core retail sales by 2023. The retail sales estimates exclude connecting revenues, such as mobile recharges, and petro-retail, where it has sold a stake to British Petroleum.
Based on the retail sales estimates for the company, the net asset value of Reliance Retail is estimated to be $29 Bn. It is expected that revenue from ecommerce, through JioMart, would make up for a significant chunk of revenue for the company over the next three years.
The Morgan Stanley estimates come after Reliance’s 43rd Annual General Meeting (AGM) last week. During the AGM, Reliance chairman Mukesh Ambani underscored his commitment to ensuring that JioMart evolves from an online grocery store to a full-fledged ecommerce store, dealing in electronics, pharmaceuticals, healthcare, fashion and other retail products. Ambani claimed that JioMart was receiving 250,000 orders every day. Currently, JioMart is delivering groceries, FMCG goods and personal care products through its online platform. On Sunday (July 19), JioMart launched its mobile application on the Google Play Store and iOS App Store. Within two days of its launch, the app breached the 1 lakh downloads mark.
Further, JioMart is not charging a delivery fee for orders, which sets it apart from other ecommerce stores. While Flipkart offers free deliveries for orders worth INR 500 or more, Amazon offers the same for orders worth INR 499 or more. Customers of Amazon’s paid streaming services, Prime, are able to avail free delivery on all orders. Besides ecommerce stores, online grocery store BigBasket also reserves free delivery services for orders worth more INR 1200 or more, also keeping considerations such as delivery city and location in mind.
Plans are also afoot to integrate kirana stores into the JioMart supply chain, through the use of messaging application WhatsApp.
In the grocery segment, the JioMart is in direct competition with BigBasket and Grofers. According to US-based market research company Forrester Research, the Indian online grocery delivery segment is set to record $3 Bn in sales this year, representing a 76% hike compared to $1.7 Bn last year. It also added that the ecommerce segment is expected to grow by 6%, amounting to $35.5 Bn this year. However, compared to last year, the firm would also seek a hike of $2 Bn.