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A MIGHTY COMBO DEAL

Mukesh Ambani’s Facebook deal should make India’s online grocers nervous

Ananya Bhattacharya
By Ananya Bhattacharya

Tech reporter

Indian online grocers are likely to lose sleep over the $5.7 billion Facebook-Reliance Jio deal.

After all, it brings together two powerhouses, India’s largest telecom firm and the world’s largest messaging app.

“…Jio Platforms and WhatsApp have also entered into a commercial partnership agreement to further accelerate Reliance Retail’s New Commerce business on the JioMart platform using WhatsApp and to support small businesses on WhatsApp,” Reliance Jio said in its April 22 press release. “The companies will work closely to ensure that consumers are able to access the nearest kiranas who can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp.”

The partnership comes at the cusp of an Indian online grocery-retail boom.

Valued at $1 billion, the segment is slated to grow to Rs1.03 lakh crore ($14.6 billion) by 2023—and that was before the coronavirus outbreak. The pandemic and the nationwide lockdown it prompted have together added new life into e-grocers. Shelves at local stores are getting emptied so buyers are migrating online, both out of convenience and the fear of contracting the virus.

“Jio has shown that when it enters an area, the incumbents run for cover—or shut down. From 10 telcos in 2016 when Jio entered, to basically three today. This applies to retail, too,” said Prasanto K Roy, an independent tech policy analyst. “It would be tough for BigBasket, Grofers, and Milkbasket to fight back against a big player like RIL leveraging the combined, massive WhatsApp and Jio base, and the massive cash RIL can deploy with discounts and offers.”

Ready for business

India is WhatsApp’s biggest market with over 400 million monthly active users, primarily used for chatting. However, micro-entrepreneurs and small businesses have already been taking orders, addressing queries, and transacting on it for some years now.

In Bengaluru, the platform has turned even home cooks into entrepreneurs. A Pune-based maid’s visiting card went viral on the Facebook-owned messaging app after she lost a job. A woman entrepreneur from Chennai earned crores of rupees selling sarees via WhatsApp.

Even way back in 2014, Reliance Brands, selling labels like Diesel, Kenneth Cole, Zegna, and Brooks Brothers in India, used the app to share pictures of products or other such promotions periodically.

To engage better with businesses, WhatsApp launched a separate free app in September 2017, which let businesses list store addresses, access user metrics (like the number of messages read), and deliver receipts through WhatsApp. The green verification tick can also lend added credibility, businesses say.

“Currently it does not allow for any directory-based search, which could be a challenge as we look at retail integration on the platform,” said Sandeep Murthy, partner at VC firm Lightbox. “That being said, voice-based navigation could be a very interesting method to enable transactions through Whatsapp.”

Moreover, WhatsApp Pay’s launch is on the cards—even if a little delayed—which means users don’t have to leave the ecosystem to make payments either.
Teaming up with kirana stores could be the ultimate leg-up though, Murthy said.

Pandemic push

So far, BigBasket and Grofers have been India’s frontrunners of online grocery deliveries in the time of Covid-19, but WhatsApp has been pivotal in its own way.

For instance, many of China’s gated communities used group chat apps to organise delivery of supplies at people’s doorsteps, according to a March 17 Harvard Business Review article.

“This is almost certainly something that can be done in many parts of India as mobile text messaging apps are also very popular in the country and can enable this kind of grassroots coordination in large housing complexes and gated communities of India,” said Anindya Ghose, professor of technology, operations, and statistics at New York University’s Stern School of business.

With this deal, WhatApp is inching closer to a WeChat-like ecosystem, bridging supply and demand gaps.

Already, delivery associates have been able to apply for passes via WhatsApp. BigBasket is taking orders via WhatsApp. Even the Karnataka government has been using the platform to facilitate grocery deliveries.

Even inquiries about chloroquine, the drug used to treat malaria, have sent India’s WhatsApp network buzzing.

For now, bigwigs Bigbasket, Grofers, and Reliance Jio have ample room to grow, experts say. “Going forward, it is a function of how effectively they service customers for their needs in terms of quality and timeliness,” said independent startup sector analyst Harish HV.

Whether WhatsApp and Jio can deliver amid the hype remains to be seen.

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