Reliance has the power to digitize 5 million Kirana stores by 2023. A study by Bank of America Merrill Lynch has found that the Mukesh Ambani-led Reliance Industries’ entry into online retailing can help expand the current 15,000 digitized retail stores to over 5 million by 2023. The Bank of America Merrill Lynch report finds that with the launch of this affordable Jio Mobile Point-of-Sale devices, Reliance Industries could consolidate the scattered PoS market.
Reliance is looking at installing its Jio MPoS (mobile point-of-sale) device at Kirana stores to connect neighborhood suppliers to its high-speed 4G network that can be used by its customers to order supplies.
It is believed that Reliance, with a deep footprint in over 10,000 Reliance Retail outlets pan-India, is working to create the world’s largest online-to-offline e-commerce platform in the country.
As much as 90 percent of India’s USD 700 billion retail markets is unorganized, made up mostly of neighborhood kirana stores selling groceries and other sundries. These Kirana stores are keen to upgrade their tech and this is driving a wave of modernization, the study said.
It has been indicated in the report that the growing competition from modern trade and e-commerce and GST implementation has acted as a catalyst, thus, creating further modernization pressure as GST compliant bills have to be generated.
The report also says that MPoS’ launch will take on SnapBizz, Nukkad Shops and GoFrugal in this fragmented MPoS space. While Jio MPoS is available at a one-time investment of Rs 3,000, SnapBiz offers the same machine at a one-time cost of Rs 50,000, the report said. One-time charge on Nukkad Shops is Rs 30,000 to Rs 55,000 while GoFrugal offers POS software at a one-time investment of Rs 15,000 to Rs 1 lakh.
Jio MPoS has no merchant discount rate (MDR) on any charge and offers a loyalty programme, it said, adding its monetization strategy include merchandise delivery, advertising, and supply-side aggregation. “We believe, with RIL’s entry, we could see an increase in merchant adaptability, as the price points will likely come down (RIL’s current one-time deposit is Rs 3,000) and reach should expand. “Consolidation is also a possibility; as a big player, RIL is entering an otherwise scattered market. Overall, we expect RIL to help expand the current 15,000 digitized store bases to 5 million-plus stores by 2023,” read a statement in the report.
Source & Credit: PTI