RIL's new kirana store-driven delivery model to aid new commerce initiative

RIL's previously announced new commerce initiative entails on-boarding kirana stores and digitising them via merchant POS machines. (File)

Grocery for Reliance Industries is already over $4 billion in sales and the firm is now working on a kirana-driven delivery model for grocery under its new commerce strategy, Credit Suisse said in a report on Thursday.

RIL's previously announced new commerce initiative entails on-boarding kirana stores and digitising them via merchant POS machines.

The concept was to leverage the network presence of kirana stores for RIL's e-commerce initiative. Under this initiative, RIL started JioMart pre-registration in December last year. JioMart is the food and grocery e-commerce venture.

The company then announced the launch of new format grocery stores SMART Point, which are purported to complement the JioMart initiative. 18 such stores were launched in December 2019 in three areas Navi Mumbai, Thane, Kalyan which are also the pilot regions for JioMart.

In its new format 'Smart Point' stores, RIL is "using an interplay of delivery through kirana stores and own warehouse," Credit Suisse said.

The Smart Point stores are a smaller version of larger Smart stores, with the same promise of 'minimum 7 per cent off on MRP' on all products. In addition to assisting the JioMart venture, these stores will also function as a full-fledged grocery outlet, which will further deepen Reliance Retail network.

"Currently, the larger format SMARTstores are few and located far from a residential neighbourhood, but the Smart Point stores have been opened closer to the shopper," it said.

"As of March 31, 2019, there were 154 Smart stores across 96 cities, and now within a short time frame, 18 Smart Point stores have been opened. This would augment RIL's grocery play."

Credit Suisse said the Smart Point store came across as a typical mini-market self-service neighbourhood food and grocery store. The assortment was spread across the key categories of food, personal care, household cleaners, paper goods, and fresh fruits and vegetables.

"We believe that fashion and electronics would be offered via kiosk and point-of-sale counters located within the store," it said adding the size of the store was 1,500-2,000 sq ft and with 2-3 cash check-out tills. These stores have an adjoining delivery point, which resembled a small 150-200 sq ft area.

The deliveries are extending to medicines, and they are increasing the reach of fashion and electronics through kiosks in these new stores.

"Smart Point stores have delivery points for JioMart orders. Smart Point stores are full-fledged grocery outlets (smaller version of large Smart stores) and have dedicated delivery points for JioMart app orders," it said. "The customers on JioMart app will have the option to choose delivery via a nearby kirana store (same day delivery) or a SMART Point. These new stores offer a minimum 7 per cent discount on grocery and a minimum 10 per cent off on medicines."

Smart Point stores leverage cross-selling. Each Smart Point store has an AJio kiosk that enables customers to order fashion and lifestyle products, a Reliance Digital point of sale for ordering electronics, and a Jio Payments Bank counter.

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