Shah is the official distributor of British Rekit Benkiser in Vita, about 200 miles south of Mumbai. But once upon a time, loyal customers were referred to an app – Geomart Partner – They offer up to 15% lower prices than placing orders on their smartphones.
Shah said, “I would be like a prince in a market like a Rekit dealer.” “Now the governor says to me, ‘See how many of you are copying!’
The 31-year-old, who has been accused of trying to change retail distribution in India, said he had lost $ 2,000 from his application to JioMart by Rising Industry Billionaire Mukesh Ambani.
In and around India, as a small town Vita, mother-and-pop stores with more than four-fifths of the $ 900 billion retail market and more than $ 700 billion – are turning to geomart to store foreign and domestic brands. .
India’s richest man is expanding into US e-commerce giants such as Amazon and Walmart Inc. in a bid to curb retail distribution, just as Amani has disrupted the country’s telecom industry.
The country has about 450,000 traditional distributors, including 600,000 villages. They usually get a 3-5% margin on product prices and usually take a one-week in-person order, which reaches retailers within a few days.
But Reliance’s model puts a key in that supply chain. Reliance also provides training for affiliated Kirana customers on ordering, credit facilities and free product samples.
This means that hundreds of thousands of sellers representing consumers such as Reckitt, Unilever and Colgate-Palmolive are at risk for their business, according to interviews with sales people, 20 distributors and members of the Indian business community.
Most of the distributors contacted by Reuters said they had reduced their workforce or fleet, and that retailers, in partnership with Reliance, had reduced their home-to-house sales by 20-25 percent.
In Vita, salesman Shah said he should have fired half of his four employees. The 50-year-old family is concerned that it could not last more than six months.
The magnitude and speed of the disruption has led to disagreements between traditional distributors and Reliance, which in some cases have led to physical conflict.
In the western part of Maharashtra – Vita residences – and in southern Tamil Nadu, traditional sellers set up restrictions on some geometry vehicles.
“We are hiring guerrilla tactics,” said Diasil Patil, president of the All India Consumer Distributors Federation, which represents 400,000 domestic and foreign consumer organizations. He told Reuters: “We will continue to mobilize, we want (consumer goods) companies to realize our value.
A.D. Confidence in moving forward with Ambani’s “new business” retail trade, first announced in 2018, is still pending.
Over the past year, it has raised funds from Markel Investors as Silver Lake Partners and KKR & Co Inc. seek to integrate moms and pop stores in a more engaging way for digital business. That pressure has been felt for years in India by selecting large sellers at the expense of small retailers – and widely opposed to the Amazon-branded ones they have rejected.
A source close to Reliance said the company was committed to expanding its business to moms and pop stores. He believes the model could co-exist with the traditional approach of one of the world’s largest retail markets.
Ambani He said he wants to connect 30 million small businesses to the Reliance network by 2018. So far, 300,000 merchants in 150 cities have partnerships and have ordered consumer goods from Reliance, but by 2024 the plan to increase 10 million partner stores will double.
Asylum does not respond to questions in this article.
Colgate refuses to comment Unilever India Arm Hindustan Unilever did not respond to a request for comment.
Industrial observers say that despite the disruption, traditional distribution methods continue to be useful to suppliers.
Consumer executives who met in September expressed concern over Reliance’s strategy disrupting the traditional distribution chain, said Himanchu Bajaj, a former Asian consumer and retail head.
“The companies don’t want to kill their own distributors, the concern is real,” he said.
In an interview with Reuters last month, Tata, chief executive of Indian Tata Consumer Products Sunil de Suza, told Reuters: “I can’t sit and ignore any major broadcaster, but Tata has been trying. Reduce conflict and maintain balance.
Geoffrey estimates in March that Cranas will continue to increase its share of acquisitions from Reliance “at the expense of traditional distributors.” That would increase Reliance’s sales from $ 200 million by 2025 to $ 10.4 billion by 2021-22, according to Jeffrey.
An executive rival for Riley, Ambani Kiranas, said he was “spreading his wings very quickly” and said he was already on the verge of a bargaining chip, a relationship that has lasted for years with Reliance and its 1,100-year consumer. Supermarkets as a big customer.
Along with Kirana partners, Ambani is also gaining ground. “Brands can’t side by side with Reliance, but only by their high purchasing power,” said the executive, who declined to be named because he did not have permission to speak to the media.
All about pricing
Many rents are narrow stores in older buildings, with branded products on wooden shelves and small bags hanging from the ceiling. Such retailers are receiving Reliance to increase their profit margins.
During a field visit to the Mumbai Daravi area, Reuters struggled to persuade Colgate sales agent Anurud Mishra, a 50-year-old Sivkumar Singh. Daravi is home to 1 million people and ranks one of the largest villages in the world.
Singh launches Geomart app and shows very low prices. “How can I order from traditional distributors?” he said. “The price difference is huge. Now I order from Reliance.”
According to a review by Reuters’ Purchasing Agreements on the GeoMart Partner app, Daravi retailer can buy two-tube Colgate Maxfresh toothpaste wholesale for 115 rubles ($ 1.55). Seller Mishra Distribution Company received 145 145, and its last offer to Daravi retail was 4 154 – still more than a third of the Reliance price.
Returning to Sangili, traditional distributors said they sometimes chased Reliance vehicles and collided with drivers, accusing them of unauthorized delivery.
According to Sunil Pujari, who works for a geothermal supply agent in the city, his supervisors have been warned to immediately notify angry dealers if they stop.
But the business is very fast.
“The price offered by Geomart cannot be compared to anyone else,” he said, referring to another shipment in a crowded market.
This article was edited by Wire Agency without modification. Only title changed.
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