India's Salesmen Face Ruin as Ambani Targets Mom-and-Pop Stores

Up and down India in places like small town Vita, the mom-and-pop stores that account for four-fifths of a near-$900 billion retail market - more than $700 billion - are increasingly turning to JioMart to stock up on foreign and domestic brands, Reuters reported. Just as Ambani, India's richest man, has disrupted the country's telecoms industry, the tycoon is intent on shaking up retail distribution, taking on U.S. e-commerce giants like Amazon and Walmart Inc., expanding fast in India. The country has around 450,000 traditional distributors, who have legions of salespeople to service every corner of the vast nation, including 600,000 villages. They typically earn a margin of 3-5% on product prices and mostly take orders physically once a week, making deliveries to retailers within a couple of days. But Reliance's model throws a wrench in that supply chain: the mom-and-pop stores, known as 'kiranas', can order goods on JioMart Partner with deliveries promised within 24 hours. Reliance also offers training on ordering, credit facilities and free product samples for affiliated kiranas' customers. That means hundreds of thousands of salesmen representing consumer giants like Reckitt, Unilever and Colgate-Palmolive, face an existential threat to their business, according to interviews with salespeople, 20 distributors and a trader group with members across India. Read more.
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