Chinese smartphone companies are teaming up with Reliance Retail's distribution arm to strengthen their presence in India, especially in rural areas. Poco, a sub-brand of Xiaomi, has partnered with Jio Mart Digital (JMD) to distribute its devices to over 80,000 retail stores across the country. This move comes as offline retail sales have surged to over 61% in the first quarter of 2024, according to Counterpoint Research.
Poco has expanded its offline presence in key cities like Delhi, Bangalore, Mumbai, Hyderabad, and Ahmedabad and aims to reach more regions. JMD is also in talks with OnePlus for a similar partnership as part of Reliance's aggressive expansion strategy in what it terms "new commerce."
Meanwhile, OnePlus, owned by the BBK group, plans to double its investments in retail expansion in 2024, targeting tier-2 and tier-3 cities with a goal of opening 200 stores. Despite reaching out for comments, Poco, OnePlus, and Reliance Retail remained unavailable.
Reliance Retail, which already distributes electronic goods through JMD, saw a 20% growth in its merchant base in FY24. As part of the partnership, JMD can appoint regional distributors for Poco across all states. However, some states have reported a shortage of Poco products in retail outlets.
Reliance, being the largest consumer electronics and smartphone retailer in India, has over 600 Reliance Digital stores that could facilitate the distribution of Poco and OnePlus products. The conglomerate aims to strengthen its B2B sales through JMD, which already handles bulk orders through Jio Mart. However, concerns have been raised about the lack of credit facilities and direct brand support for retailers in case of issues.
Experts believe that Reliance sees greater potential for growth in JMD beyond B2C retail, as it expands into distributing FMCG groceries and apparel to smaller independent stores.
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