This post has been corrected.
When a Mumbai resident opened her JioMart delivery bag on June 2, she found caterpillars crawling on okra and rotten brinjals. This, after her order had been delayed by several days, and only groceries worth Rs1,000 showed up from a total bill of over Rs3,000.
“Vegetables are not that great even from a BigBasket at this time (given the Covid-19 lockdown) but they’re nowhere near this bad. Jio’s milk tetra packs were puffed and dirty like someone picked them up from the mud and put them directly in the bag. I had to clean everything twice over,” the shopper, who wished to stay anonymous, told Quartz.
She has no idea what will happen to the rest of her order, but she is clear about one thing: “I’m not ordering from JioMart ever again.”
This experience is in stark contrast to what one would expect from a service launched by India’s richest man in partnership with the world’s largest social media company. And this is far from the only complaint about JioMart, which was launched on April 26 by Mukesh Ambani-owned Jio and Facebook-owned Whatsapp.
Twitter is littered with disgruntled customers whose laundry list of problems ranged from order histories vanishing to subpar or wrong products being delivered to a poor user interface.
Jio has clearly started off on the wrong foot in India’s highly-competitive $1 billion grocery market, but analysts said it’s too early to write the company off.
Invincible Jio?
“Given the reach of Jio, some poor reviews at the beginning will not materially impact its long-term potential due to the strength of the Reliance group, their deep pockets, and willingness to stay put in this business,” Yugal Joshi, vice-president of Texas-based consultancy Everest Group, said.
Just days before its official launch, on April 22, Facebook invested $5.7 billion in Jio Platforms, picking up a 9.99% stake in the company. Besides the money and its tech prowess, the social media giant brings to the table a ready userbase of India’s 400 million WhatsApp users for JioMart to tap into.
By May 31, Reliance launched JioMart in over 200 cities.
In addition, the over $10 billion cash that Jio Platforms holds strengthens its position for the longer term, said Sukriti Seth, a consultant at the Noida-based TechSci Research. “Ambani is uniquely positioned to fight the duopoly of Amazon and Walmart’s Flipkart,” she said. In addition to Facebook, Jio Platforms has raised money from private equity firms KKR, Silver Lake, Vista Equity Partners, and General Atlantic in the past three months.
This cash reserve could help JioMart take advantage of India’s price-sensitive customers by luring them with discounts and freebies, a strategy that is prevalent in India’s e-commerce industry and one that Ambani’s Reliance Group has banked for decades. Most recently, the group won in the telecom sector by offering data at dirt cheap prices.
“Jio has (the) power to sweep out certain competition based on aggressive pricing and targeted attacker strategy,” Joshi said.
This is already becoming apparent. On average, Jio Mart offered a 15% discount on the maximum retail price—marginally lower than DMart’s 16% and better than Amazon or Big Basket’s nearly 9%, a May 31 report by Jefferies said.
Correction: Jio Platforms, not JioMart, has received investments from Facebook, KKR, Silver Lake, Vista Equity Partners, and General Atlantic.