WhatsApp is set to power Reliance Retail's e-commerce venture JioMart that will take on Amazon and Walmart-owned Flipkart, Facebook and Reliance Industries Limited (RIL) announced on Wednesday. The announcement is concurrent to the Rs. 43,574 crore investment that Facebook is making into RIL's Jio Platforms in a bid to further expand in India that is the world's second largest Internet market after China with over 480 million connected users. Reliance Retail introduced JioMart in January this year on a pilot basis in Maharashtra's Navi Mumbai, Thane, and Kalyan areas.
As a result of the new partnership between Jio Platforms, Reliance Retail, and WhatsApp, customers will be able to access their “nearest kiranas who can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp”, Reliance Industries said in a statement.
The JioMart platform is already touted to have several small merchants and kirana shops on board to serve Indian consumers as an answer to Amazon and Flipkart. However, it is yet to broadly launch its operations in the country.
Similar to what Reliance Retail is planning with JioMart, WhatsApp has made a list of changes to its original platform to serve small businesses in markets including India. The Facebook-owned company launched a dedicated WhatsApp Business app back in January 2018 to make communication for small and medium enterprises (SMEs) easier. Additionally, WhatsApp Pay, a payments solution that has been integrated within the messaging app and is in beta testing for some time, allows users to make seamless digital transactions. It is also important to note that WhatsApp already has over 400 million users in the country.
Having said that, WhatsApp is yet to find avenues to generate revenue from India. The partnership is likely to help the company on that front and even bring new ways to make money for its parent Facebook.
“India has more than 60 million small businesses and millions of people rely on them for jobs,” writes Facebook CEO Mark Zuckerberg in a post on the social media site. “With communities around the world in lockdown, many of these entrepreneurs need digital tools they can rely on to find and communicate with customers and grow their businesses. This is something we can help with — and that's why we're partnering with Jio to help people and businesses in India create new opportunities.”
In addition to helping Facebook and WhatsApp find business opportunities, the Jio-Facebook deal would help make JioMart a strong competitor against Amazon and Flipkart that both have struggled to serve their customers at the time of ongoing national lockdown in the country. The platform operated by Reliance Retail is also likely to make things difficult for online grocery delivery companies such as BigBasket and Grofers as it will build on an online-to-offline (O2O) marketplace model under which the products will be sourced from nearby merchants, without requiring any native warehouses.
Reliance Industries Chairman Mukesh Ambani first hinted at the launch of JioMart by calling it a “new commerce initiative” last year. “Our beta trials with thousands of merchants across multiple locations in the country established the premise of New Commerce with significant increase in sales and improvement in margins for the participating merchants,” he had said while addressing the company's 42nd annual general meeting in August last year.
WhatsApp and Jio have a decent history of working together to build new experiences for the country. In 2018, both companies partnered to bring the instant messaging app to the Jio Phone, a smart feature phone that works on KaiOS platform and supports 4G networks. The WhatsApp team also worked closely with Jio to reduce the circulation of fake news — a long-standing pain that has adversely affected the instant messaging app.
"As a digital economy, India offers plenty of headroom for growth. The collaboration with Facebook will enable Jio to competitively stay ahead of the curve, and grab a large consumer wallet share across domains. Facebook's WhatsApp is a key trump card in realising this goal," said Prabhu Ram, Head-Industry Intelligence Group, CyberMedia Research (CMR).