© Reuters. FILE PHOTO: A shopkeeper selling consumer goods shows the Reliance JioMart point of sale machine used to order supplies for his store in Sangli, western Maharashtra, India, Oct. 21, 2021. Picture from October 21, 2021. REUTERS /
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By Aditya Kalra and Abhirup Roy
NEW DELHI (Reuters) – India's homeware sellers have threatened to cut supplies to mom and pop stores if consumer companies sell Reliance Industries products at lower prices, a letter viewed by Reuters said.
Reuters reported last month Indian sellers representing companies like Reckitt Benckiser, Unilever (NYSE 🙂 and Colgate-Palmolive (NYSE 🙂 said their sales had declined 20-25% over the last year as mom and pop stores increased Forging partnerships The trust of Indian billionaire Mukesh Ambani.
Ambani's heavily discounted deals prompted more stores to order digitally through its JioMart partner app and posed an existential threat to more than 450,000 corporate sellers who for decades served every corner of the vast country, going from store to store, to take orders.
Citing Reuters' story, the All India Consumer Products Distributors Federation – which has 400,000 members – has written to consumer companies demanding a level playing field, saying they must get products at the same prices as other large corporate distributors like Reliance.
If the demand for price parity is not met, the group said in its letter, its sellers will stop selling products to mom and pop stores and will also stop shipping newly introduced consumer goods if those partnerships persist beyond Jan. 1.
"We have built a reputation and goodwill among our retailers by providing them with good service for many years … We have chosen to call it a 'non-cooperation' movement," said it in the letter.
The group's president, Dhairyashil Patil, said the letter had been sent to Reckitt, Hindustan Unilever, Colgate and 20 other consumer goods companies.
None of the three consumer companies and Reliance responded to requests for comment.
Corner shops, or "kiranas", make up 80% of a nearly $ 900 billion retail market in India. About 300,000 such stores in 150 cities order goods from Reliance, with the company aiming for 10 million partner stores by 2024.
Traditional dealers have told Reuters that they have been forced to cut fleet and staff as their business has suffered from being unable to match Reliance's prices.
Jefferies (NYSE 🙂 estimated in March that Kiranas would steadily increase Reliance's “sourcing share” “at the expense of traditional dealers”. Such sales for Reliance could grow to $ 10.4 billion by 2025, from just $ 200 million in 2021-22, Jefferies estimates.
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