Princes to Paupers: India’s Salesmen Face Ruin as Tycoon Ambani Targets Mom-And-Pop Stores | Top News

Princes to Paupers: India’s Salesmen Face Ruin as Tycoon Ambani Targets Mom-And-Pop Stores | Top News

November 22, 2021 Off By administrator

By Abhirup Roy and Aditya Kalra

SANGLI, India (Reuters) – For eight straight days, household goods salesman Vipresh Shah has failed to sell a single pack of Dettol soap to the storekeepers who have been buying from him ever since he took over his family business as a teenager, 14 years ago.

Shah is an official distributor for Britain’s Reckitt Benckiser in Vita, near Sangli city, around 200 miles south of Mumbai. But he said once-loyal customers now point to an app – JioMart Partner – on their smartphones showing prices up to 15% lower, instead of placing orders.

“As Reckitt’s distributor, I used to be like a prince in the market,” said Shah. “Now the buyer tells me, ‘See how much you’ve been ripping us off!'”

The 31-year-old said he lost $2,000 of his own money as he discounted products to match prices on JioMart, the app rolled out by Reliance Industries billionaire Mukesh Ambani in his drive to revolutionise retail https://reut.rs/3olTzsa distribution in India.

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 https://reut.rs/2OYLmMV – more than $700 billion – are increasingly turning to JioMart to stock up on foreign and domestic brands.

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.

Many of the distributors contacted by Reuters said they have slashed their workforce or vehicle fleet, seeing their sales from door-to-door agents drop 20-25% in the last year as shopkeepers partner with Reliance.

In Vita, salesman Shah said he has had to lay off half of his staff of four. He fears the 50-year-old family firm might not last beyond the next six months.

The scale and speed of the disruption have triggered tensions between traditional distributors and Reliance that have boiled over into physical confrontation in some cases.

In Maharashtra state in the west – home to Vita – and Tamil Nadu in south, traditional salesmen…

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