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We’re investing in AI/ML, blockchain: Sandeep Varaganti, JioMart

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Shiv Joshi
Shiv Joshi
An editor with over 20 years of experience across industry verticals and content formats from tabloids to magazines, he is the Deputy Group Managing Editor at Images Group.

Sandeep Varaganti, chief executive officer of JioMart on the platform’s evolution, focus areas and aspirations to become the world’s largest marketplace

New Delhi: Online shopping platform JioMart is a pandemic baby. Reliance Retail Limited. (RRL), India’s largest retailer by revenue, launched the platform in 2020 in more than 200 cities and towns, to help consumers meet their daily needs during the lockdown—when access to essentials was a struggle.

Since then, JioMart has come a long way in terms of offerings, convenience and reach. In February 2023, JioMart was present in 350 cities and towns of India through its app and website.

Today, it offers products from multiple categories, including groceries, fashion and lifestyle, consumer electronics, home and kitchen goods, general merchandise, and handloom and handicrafts.

In addition to other sellers, brands from the Reliance stable—Trends, Hamleys, and Urban Ladder are live on JioMart, which is seeing a sustained uptick in non-grocery category contribution.

To offer a wide variety, the platform collaborates with a variety of sellers including Kirana stores, known as the JioMart Smart Kirana partners. RRL claims that collaborating with JioMart results in a 25% increase in the average annual income of its Kirana partners.

With over 25,000 artisans, weavers, and micro-entrepreneurs on its seller network, the platform seeks to provide support to modernise their processes, improve productivity, and help them grow their businesses.

The company continues to add partners and reported a quarter-on-quarter expansion of 56% in its seller base in the fourth quarter of financial year (FY) 2023.

In 2022, the platform integrated with the social messaging app WhatsApp to offer convenience to its customers—RRL reported a 9X growth of JioMart customers on WhatsApp since its integration.

JioMart is an important part of Reliance’s digital commerce and new commerce business, which contributed 18% to the company’s total sales in the first quarter of FY 2023-2024.

In an exclusive interview with IndiaRetailing, Sandeep Varaganti, chief executive officer, JioMart, speaks about the platform’s evolution, focus areas and aspirations to become the world’s largest marketplace. Edited excerpts…

Q. Where has JioMart reached since it began its journey?

Although a lot of people are using JioMart, we are still small in terms of where we want to be. Our journey has just started. Our daily active users have doubled in the last year.

Until a point, JioMart was looked at as a grocery app. Now that has changed. In September last year, we were doing about 90-95% of grocery business on JioMart. Right now, that is around 60% and 40% is non grocery. So, we’ve managed to bring JioMart from being a grocery-focused platform to becoming a multi-category e-commerce destination.

Q. What was the reason behind the shift in focus from grocery?

To answer that I’ll tell you the story of how JioMart was started.

There was a lockdown in India. And people were struggling to get access to daily essentials like milk, curd, daal and even vegetables. Our chairman realised that we’ve got our stock because we operated grocery, fashion and electronics stores and customers were not able to buy from us. At the same time, there were online companies which could deliver but didn’t have the stock because they weren’t able to procure.

In two weeks, Reliance Retail MD V Subramaniam decided to launch JioMart for essentials—grocery only. But after a year, we realised why only groceries when we had the entire supply chain figured out. We had access to products, as we were already operating Reliance Digital, Trends, Ajio and fashion stores. So, we just went all out and started offering all categories. Having said that, our grocery business is still the dominant one, by order volume as well as by GMV (gross merchandise value).

Q. Will you be present only in the categories that Reliance operates in?

Not just the ones that Reliance is present in, we are a proper marketplace. We have about 1 lakh small and medium businesses that have started selling on JioMart.

It’s not just our brands, we are also encouraging several small and medium businesses and they’re growing pretty fast. They’re going faster than us. If we restrict ourselves to our products, our stock keeping unit (SKU) count or the selection is limited but via third-party sellers, we are close to 10 million in selection.

Q. In terms of supply chain, where do you stand?

The magic with Reliance is any other company which is trying to build an e-commerce marketplace will have to build a supply chain network, from the ground up. Being a part of Reliance Retail, the advantage is we don’t need to do that because a significant part of the network has already been built.

To support our e-commerce and omnichannel strategy, we have our store network, we are our distribution centres, we have our warehouses… we are piggybacking on that and only building new warehouses wherever we need them.

Q. How are you managing the last mile?

We do it in multiple ways. We also depend on third-party logistics service providers and delivery. Then we also have our investments in certain companies like Dunzo. So, it’s a combination.

Q. You receive many orders from WhatsApp. Tell us more about it.

JioMart’s engine is integrated into WhatsApp. So, customers can discover and purchase products and even complete the transaction on WhatsApp screen itself, powered by a WhatsApp bot.

About 10% of our overall order volume comes from this channel.

Q. You briefly dabbled in quick deliveries with JioMart Express…

It was a strategic call. We launched JioMart Express in certain pin codes of Navi Mumbai. We wanted to pilot it to understand if we could do it successfully if we ever wanted to explore that business model.

We realized that customers don’t need products in 30 minutes. They’re okay to get products in three hours or even the next day as long as the pricing is good.

They don’t need it instantly. We believe that quick commerce or fast deliveries could serve top-up shopping incredibly well. But for basket shopping, for the monthly grocery shopping, I don’t think that customers are looking for a 30-minute delivery.

Q. Are you focusing on tier-2 and tier-3 towns?

We are betting on tier 2, and tier 3. About 50% to 60% of our orders come from beyond tier 2 cities. And I think it’s natural for that to happen… since more and more people have recently started adopting e-commerce, they are looking for some kind of trust, some kind of a brand recall and I believe as Reliance Retail and as JioMart, we have that advantage.

In tier 2 and tier 3 towns, people know about Reliance, people know about the brand name Jio, they may be able to take that experimentation bet on us, so we are seeing better numbers.

Q. Have you set any targets or goals for expansion?

We want to be the world’s largest marketplace. That is possible only in India because we have the most thriving buyer population and the most thriving seller population—retailers, and small and medium businesses. India has almost 70-80 crore SMBs, which include service, and product manufacturers, and they contribute 30% to the country’s GDP. If they don’t do well in the overall ecosystem, then the country is not going to progress. We will continue to enable small and medium businesses.

Q. How will ONDC impact JioMart?

We support ONDC; we are working with the ONDC team to figure out what help they need. As an intention, as a protocol, it is going to be significantly helpful for the Indian customers as well as the SMBs.

We are working with the team to give them feedback on what else needs to be done to make it more robust, more adaptable for all involved.

Q. Any technology-based innovation that you have planned for JioMart?

We are doing everything that is required to delight the customers. It includes experimenting with AR/VR in certain categories. We are also using artificial intelligence (AI), and machine learning (ML) in many places. An example would be to identify customer abuse. Which are the pin codes where abuse is happening? Which are the IPs where it is happening? What are the mobile numbers? How do we identify and what action do we take after we verify it?

Similarly, we do a lot of seller-vendor contracts. We want to keep each seller’s identity and contract exclusive. We don’t want another vendor to know what my contract with one vendor is and we’re using blockchain to do that. It is in the development phase.

So, AI/ML and blockchain are where we are investing in currently.

Reliance is a strong believer in technology, and I have worked in technology companies all my life so we are going to ensure that whatever investments need to be made, technologically, to make JioMart robust and delight the customers we will do them.

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