Google-Reliance partnership in e-commerce industry

EDITOR 30/7/20: Google's surprise decision announced on July 15 to invest $4.5 billion into Jio Platforms.It is very likely that Google itself and its affiliates in India will work closely with JioMart.Google's addition to the Jio alliance will therefore make JioMart an even more formidable challenger to India's two incumbent e-commerce leaders –Flipkart, a subsidiary of Walmart, and Amazon India.

JIO MART

JioMart is an e-commerce platform launched this January.It is a tech-enabled partnership that will link producers, traders, small merchants, consumer brands and consumers.

JioMart promises to stock over 50,000 grocery platform for the consumers to buy every necessary daily essential product.

GOOGLE PAY

Apart from providing its ubiquitous keyword search service in various Indian local languages,Google has been working hard to increase penetration of its mobile payment service Google Pay among Indian consumers.Today Google Pay is among the top three Indian mobile payment services,The other two being Paytm and PhonePe.Google is about to roll out a service enabling Indian consumers to order food from restaurants they find in Google searches,With payments to be settled by Google Pay andThe foods delivered by Dunzo, a hyper-local delivery service startup in which Google has a minority stake.After the Google & Jio partnership,It could also be safe to assume that Reliance and Google will link the U.S. group's new food ordering, payment and delivery ecosystem to JioMart's wider-scope e-retailing platform.One of the weakest links of JioMart's e-retailing platform has been its last-mile logistics.The combination of Google's map technology and Dunzo's local delivery network will surely help  JioMart to address its last-mile issue.Soon after Facebook invested $5.7 billion in Jio Platforms in April, its messaging subsidiary WhatsApp started sharing its more than 400 million users with JioMart.

If Google's ecosystem joins WhatsApp in backing JioMart operations, it will present a threat to India's current top-two e-commerce players.

WHAT FLIPKART & AMAZON ARE DOING?

One day before the Google-Jio announcement, Flipkart announced that it was raising $1.2 billion from existing shareholders led by its parent Walmart.

Amazon, meanwhile, has made two capital infusions of a total $640 million into its India operation this year.Both Flipkart and Amazon have been trying to increase the amount of small and micro retailers in their partner networks,Preceding JioMart's adoption of the same strategy.

CONCLUSION

Of India's roughly $792 billion retail market, only 3% was carried out online in the year ended March 2019, according to rating house CARE Ratings.With the entire retail market predicted to grow at double-digit speed, the online portion of that is expected to see important expansion, with projections of 30% growth over the next few years.