JioMart’s finally a way out of Udaan’s FMCG squeeze..When we wrote about Udaan’s the logistics ambitions to become the Flipkart of B2B e-commerce back in 2019, we also predicted that the road it was travelling on would eventually put it on a collision course with India’s most-valued company—Reliance Industries.
It wasn’t a far-fetched assumption. Reliance Jio was trying to make inroads into the kirana (mom-and-pop) store category through its point-of-sale (PoS) machines. It would digitise the kiranas’ inventory—gaining access to multitudes of data as well as to a wide retail network—taking it one step closer to an omnichannel play.
That plan didn’t exactly get off the ground the way Reliance wanted. But Udaan has come up against a Reliance wall all right, one far larger than anyone could have imagined—JioMart.
Udaan’s journey so far hasn’t been an easy one. The pandemic bought Udaan closer to fast-moving consumer goods (FMCG) companies. Pre-Covid, Udaan managed to source only 10% of its FMCG products directly from the companies. Now it’s 60-65%.
FMCG companies, though, are putting up a stiff resistance, with the likes of Parle and Amul reluctant to work with the B2B unicorn. Parle’s move even forced Udaan to complain to India’s antitrust regulator that the country’s second-biggest biscuit maker was abusing its dominant position by not supplying its products directly to Udaan. The company has had to source products from distributors instead, putting dents into its already thin FMCG margins.
It’s just Udaan, however. The Ambani-owned venture has workarounds, even if companies like Amul don’t supply to JioMart’s B2B business—like dipping into its B2C arm. What else does JioMart have that Udaan doesn’t?
Actually, lots. Not only does Reliance run India’s biggest supermarket chain, with 820 stores, JioMart is also an online grocer in over 200 cities. Rolled out in May 2020, JioMart’s B2C business accounted for 4% of the online grocery market in the year ended March 2021.
That’s not the kind of clout that FMCG companies can afford to ignore, even if JioMart does tend to undercut some companies’ distributors. We at Mumbai Multimedia Studio's lay out the extent of Udaan’s battlefield in today’s riveting story #yusufbhandarkar #digitalmarketing2021 www.multimediastudio.net
