JioMart’s expansion also comes as millions of Indians remain locked up because of the coronavirus pandemic.
But JioMart’s launch “is a cause for concern for Amazon and Flipkart, [because they] are not particularly strong in the grocery business, “said Satish Meena, an analyst with research firm Forrester. Both companies launched food deliveries online last year.
Amazon and FlipKart have also encountered difficulties in delivering orders across India during the Covid-19 pandemic due to varying levels of restrictions from one city to another, he said.
FlipKart had to temporarily suspend services in March when the nationwide lockdown began, and Amazon had to limit orders as it responded to increased demand.
Amazon and FlipKart did not immediately respond to the request for comment. They both currently supply important goods in India.
JioMart launched at the end of last year, with the goal of getting 30 million Kiranas, small neighbors and pop shops online.
Grocery accounts for 70% of the Indian retail market, and more than 90% of the market is disorganized and run by kirana stores, according to investment research firm Bernstein. The total retail market is expected to double in size from $ 676 billion in 2018 to nearly $ 1.3 trillion in 2025, according to Bernstein.
India’s online food market is comparatively small, worth about $ 3 billion this year, according to Forrester. But the company said the number is growing rapidly, because the pandemic is changing people’s shopping habits quickly.
Bernstein and Forrester analysts say JioMart is well-positioned to disrupt the grocery market online as it can pick up deliveries from Relian’s brick and mortar stores. Reliance is India’s largest retail operator. If JioMart succeeds in getting Kiranas online and organized, it will also have a hyperlocal supply and logistics chain that it can use to meet demand.