CAIT Says Reliance-Facebook Deal for JioMart Should Empower Local Kirana Stores
A woman rides her scooter past advertisements of Reliance Industries' Jio telecoms unit in Ahmedabad. (REUTERS)
Reliance Jio has proclaimed its vision of not only being a telecom player, but evolving as an end-to-end digital company catering to mass market in India, and being the biggest player in India’s digital economy.
- Last Updated: April 24, 2020, 1:34 PM IST
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Confederation of All India Traders, an industry body that represents 60 million traders and 40,000 trade associations, has said Indian consumers have always supported business solutions that work for the larger good of the country. “E-commerce is a welcome step, and FDI investments should broaden the market,” said CAIT when asked about Reliance Jio and Facebook’s partnership to use WhatsApp for digitisation of millions of neighbourhood kirana shops across India.
“Indian consumers acknowledge the tireless efforts of local kirana stores in ensuring essential supplies during Coronavirus outbreak and the subsequent lockdown. Indian consumers have always supported businesses and solutions that work for their larger and long-term good,” said Praveen Khandelwal, National Secretary General of CAIT.
JioMart will allow millions of local retailers and kirana merchants to list their products on the portal and sell them to customers.
Soon after announcing the Rs 43,574 crore deal on Wednesday, RIL Chairman and managing director Mukesh Ambani said, “Jio Mart, Jio’s digital new commerce platform and WhatsApp will empower nearly 3 crore small Indian kirana shops to digitally transact with every customer in their neighbourhood. This means all of you can order and get faster delivery of day-to-day items from nearby local shops. At the same time, small kiranas can grow their businesses and create new employment opportunities using digital technology."
Reliance Jio has proclaimed its vision of not only being a telecom player, but evolving as an end-to-end digital company catering to mass market in India, and being the biggest player in India’s digital economy. In just three years, it has managed to have a subscriber base of nearly 400 million users. Both the companies, through this partnership, intend to roll out a commerce platform, JioMart. It is currently under trial in select areas of Maharashtra — Navi Mumbai, Thane and Kalyan. WhatsApp is already active in connecting small businesses in India. Both Facebook and Jio will work closely to ensure consumers are able to access the nearest kirana stores that can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp.
While Reliance already has its own payment app, JioMoney, WhatsApp Pay has approval from National Payments Corporation of India on the condition that it will comply with the data localisation norms.
On Facebook’s largest FDI in India for a minority stake in Jio platforms, CAIT said, “The investments should happen in the letter and spirit of India’s FDI norms. Such initiatives and the capital must be used to develop the market and overall infrastructure in India rather than to merely rout competition and gain dominance. The former is developmental and good for the nation as it creates value. However, the second is what has affected smaller businesses and India’s core strength of its diverse businesses.”
The deal gives enough leverage to JioMart to effectively compete with well-established Amazon and Walmart-Flipkart in India. However, the duo have been accused of often violating existing FDI norms, which prohibit interference in pricing of the products and services for marketplace players. CAIT has been critical of Amazon and Walmart-Flipkart, accusing them of “predatory behaviour” and “deep discounting”.