The retail giant launched its food and grocery app last month for beta-testing among employees before a planned commercial launch later this year.
“One of the things that will trouble Amazon and Flipkart is Reliance’s history of launching operations via massive discounts,” Satish Meena, senior forecast analyst at Forrester Research, told LiveMint.
Reliance used this approach when it entered the telecom sector in 2003, slashing prices for voice calls and data plans. “This kind of discounting can disrupt any market, and we expect something similar to happen in the grocery space during Reliance’s launch,” Meena added.
Reliance currently operates 10,415 stores in over 6,600 cities across India with more than 500 million annual footfalls – scale that gives it a big advantage in a highly competitive market. And it is seeking to install its mobile point-of-sale tech devices at the kirana stores make up the great majority of retail sales to enable customers to order products online
A portfolio of brands that range across midmarket and premium names, such as Hamleys and Marks & Spencer, will also give it a presence in the fashion and lifestyle segment, which a Forrester report says will be the largest category by online spending in the coming years.
While online grocery sales are growing strongly in India – up 55% by 2021, according to a TechSci Research report – subscription-based online grocers in particular are gaining traction.
A RedSeer report says the model has taken the lead in drawing in consumers looking for convenience, converting 30 to 40% of their total customer base to subscription-based services.
The report stresses the main drivers of rapid take up of subscription groceries are keen pricing and special offers like cashbacks and discounts, plus free and/or priority delivery.
According to market intelligence provider Kalagato, BigBasket leads the online grocery sector in India, with a 35.2% share of the market, followed by Grofers with 31.5%, and Amazon Now with 31.2%.
Sourced from LiveMint, TechSci, RedSeer; additional content by WARC staff