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Tuesday, May 30, 2023

JioMart Sabotages Industry Through Deep Discounts

The All India Consumer Products Distributors Federation has accused Jio Mart of deep discounting.

The complaint has been lodged with Marico, an Indian multinational consumer goods company providing consumer products and services in the areas of health, beauty, and wellness.

AICPDF Complaints Against Deep Discounting By JioMart

JioMart is only a couple of years old, yet it has gained a huge market share in the Indian e-grocery market.

It is reported that Jio Mart offers huge discounts, sometimes even more than the landing distribution price, according to Dhairyashil Patil, National President, All India Consumer Products Distributors Federation.

Jio Mart offers a discount of at least 10-15% even below the authorized distribution margin, making the ecosystem vulnerable. Their margin is around 5 percent, but Jio Mart offers a discount of at least 10-15%.

The association has written a letter to Marico, in which it informs the company that it has halted billing JioMart till the company stops deep discounting. The issue has been spotted in Pune so far. If we find this issue in other circles, we will inform the company about the same, too.”

Deep Discounts Offered Only In Maharashtra?

These deep discounts are being offered only in Maharashtra.

JioMart Partner’s scale and speed are increasing, causing disruption and creating tensions between traditional distributors and Reliance that have sometimes escalated to physical confrontation.

On the other hand, the sources in JioMart haven stated that Marico had stopped billing the Reliance Retail-owned grocery giant. This is reportedly “a pressure-building tactic. It is natural for different scales of companies to be able to negotiate a better distribution pricing. JioMart has not offered any discounts beyond the stipulated band by the FMCG company.”

The Confederation of All India Traders (CAIT) has also sided with the AICPDF.

There are more than 8 crore traders in India, and 4.5 lakh of these are distributors and more than 90 lakh are retailers. This means that there are about 1 crore people in the FMCG distribution business, as confirmed by National Secretary General Praveen Khandelwal.

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