What were the rumors?

Initially, however, Grab A Grub will only handle orders from Reliance storehouses or between distributors and Kirana stores. “They will do backend only. Reliance doesn’t want to be seen as an interface between Kirana stores and customers and be perceived as competition for the Kirana stores,” said the senior official quoted earlier.

Reliance’s Delivery Ambitions

But this won’t necessarily be enough to help Reliance’s delivery ambitions succeed. Online grocer LocalBanya.com tried this model and failed. E-grocer Grofers, too, has partnered with local businesses and store owners for last-mile delivery. It is currently operational in Delhi-NCR, Mumbai, Bangalore, and Kolkata and will reportedly soon be available in all of its 13 operational markets.

The problem with delivering through Kirana stores is simple. Say you order an item that isn’t in stock. There’s the additional pain of canceling, refunds and reordering. “Customers won’t get the best experience and will stop coming to your app,” a top executive at one of the top e-commerce grocery platforms said. The executive did not want to offer comments on Reliance’s plans citing confidentiality. He claims that Reliance consulted his firm to better understand the nitty-gritty of last-mile delivery.

Reliance Brands Ltd, a subsidiary of Reliance Industries Ltd, does have a potential solution for all this. It works with Google-funded online-to-offline fashion e-commerce platform Fynd. Fynd links store inventories, so if you can’t get what you’re looking for, you place an order at the store through the app and Fynd gets it delivered from a different outlet. Reliance Retail could potentially emulate this model for Kirana stores.

Refuted Claims

While Fynd co-founder Harsh Shah refuted claims of a rumored acquisition by Reliance, he said the company is in talks with “multiple strategic and financial investors for investments.” Shah added that the company has worked with Reliance Brands for the past six years and has helped it curb the loss of sales due to inventory shortfalls at the store level.

And as customers transact on the app, Reliance will be gathering and analyzing data to get a share of the last remaining stakeholder in the retail ecosystem—FMCG companies.

By virtue of being the top retailer in the country, it would be fair to say that Reliance is a major customer for most FMCG companies. And as Reliance aggregates the demand of Kirana stores as well, FMCG players will be hugely dependent on it for business. Once again, this is the stick Reliance can use to get more favorable purchase terms. Once again, there are carrots.

Remember all that purchase data passing through Reliance’s app? Primary market data related to consumption patterns, inventory, turnover, etc. All vital information for FMCG companies looking to better understand the market and sharpen their promotional exercises. While companies do gather this sort of information themselves, the real-time, granular data Reliance would be able to provide would be far superior, the top official claimed.

Trendings of the FMCG company

Reliance could also enable FMCG companies to offer promotions at the Kirana-level, something which has proved difficult in the past. The top official quoted earlier confirmed that large FMCG companies such as Hindustan Unilever (HUL)—the maker of Dove, Lux, Surf Excel, and Lakme—are already working closely with Reliance to test coupon codes for consumers.

While Reliance may boast a strong hand, FMCG companies will have to tread carefully. As volumes and revenues keep shifting towards Reliance, the existing distribution network will fray. This will be a big challenge for FMCG companies to address. For now, though, a senior executive at a top packaged foods company says, both existing distribution channels and Reliance Jio’s platform can co-exist.

In response to a detailed questionnaire, HUL said, “There is an opportunity to enhance the shopper experience in traditional trade environment and raise the game for small retailers with the help of technology solutions…The partnership with Reliance Jio is one such initiative to digitize the traditional trade through the deployment of POS terminals at retail outlets.”

Nestlé India’s spokesperson, however, declined to comment on specific associations with Reliance. FMCG brand Dabur also refused to comment.