The concerns of offline retailers stem from Reliance Digital, which is part of Reliance Retail, negotiating with retailers to install tablets in their mobile stores as part of the “Jio Mart Digital Program”. These tablets will be loaded with a complete catalog of approximately 20,000 consumer electronics products, which the customer, visiting these offline stores, can pre-select and have home delivered or even choose from the relevant mobile store, or any other. Reliance Digital store.
In the process, the offline mobile retailer can earn a commission from Reliance, ranging from 3 to 20%, depending on the price of the product.
But handset retailers are far from comfortable. “Yes, we get a commission on every transaction, but we risk losing our loyal customers. If Reliance starts messaging them on all cell phones and offers discounts, then who will come to our stores? Asks a Gujarat-based cell phone retailer, who declined to be named.
Last Sunday, Sunil Dutt, president of devices and mobility at Reliance Jio, met with offline retailers to discuss the details of this online and offline program.
“Dutt told retailers that the vision of RIL President Mukesh Ambani is to empower national retailers and grow their chain with this program,” Arvinder Khurana, National President of the All India Mobile Retailers Association, told ET. (AIMRA).
AIMRA represents nearly 1.5 lakh independent mobile retailers across the country.
However, retailers have repeatedly asked Reliance if customers will continue to opt for offline shopping, especially as offline retailers have faced challenges with online channels.
“They (read: Reliance) have given no assurances, but the retailer associations will be holding meetings in their states to get a broader consensus,” said a Mumbai-based retailer, who was present at the meeting.
At the time of going to press, ET’s questions to Reliance Retail have remained unanswered.
Offline retailers have been grappling with the growing trend for consumers to shop online amid the ongoing pandemic, and their business has taken a serious hit with festival sales.
So much so that they expect sales to drop by up to 70% this holiday season compared to last year. Retailers have complained that discounts are skewed online and even the financing options are better there.
On the other hand, online terminal sales are expected to reach the highest levels, with a market share of 53 to 54% in the second half of the year thanks to festive sales. Cell phone store owners have complained about not having sufficient inventory, compounded by the continued shortage of components.
Another retailer told ET that there are big concerns from residents of small towns where consumers are getting used to online channels. They fear that if these small town customers also start shopping online and having products delivered to their doorstep, it could mean huge business losses for offline retailers.