JioMart’s expansion also comes as millions of Indians remain under lockdown because of the coronavirus pandemic.
But JioMart’s launch “is a reason for worry for Amazon and Flipkart, [because they] are not very strong in grocery,” said Satish Meena, analyst with research firm Forrester. Both companies launched online grocery deliveries last year.
Amazon and FlipKart have also faced difficulty delivering orders across India during the Covid-19 pandemic because of varying levels of restrictions from one city to the next, he said.
FlipKart had to temporarily suspend services in March when the nationwide lockdown began, and Amazon had to to limit orders as it responded to increased demand.
Amazon and FlipKart did not immediately respond to requests for comment. They are both currently delivering essential goods in India.
JioMart launched late last year, with the goal of getting 30 million kiranas, small neighborhood mom and pop shops, online.
Grocery is 70% of the Indian retail market, and more than 90% of the market is unorganized and driven by kirana stores, according to investment research firm Bernstein. The overall retail market is expected to double in size from $676 billion in 2018 to nearly $1.3 trillion by 2025, according to Bernstein.
India’s online grocery market is small by comparison, worth around $3 billion this year, according to Forrester. But the firm said that number is growing fast, as the pandemic is quickly changing people’s shopping habits.
Bernstein and Forrester analysts say JioMart is well placed to disrupt the online grocery market because it can source supplies from Reliance’s brick-and-mortar stores. Reliance is India’s largest retail operator. If JioMart manages to get kiranas online and organized, it will also have a hyper-local supply and logistics chain that it can use to meet demand.