Reliance Retail’s target is to open more than 6,000 outlets on a pan-India level with a revenues potential of roughly $20 billion by FY20-end.
Reliance Retail is India’s biggest multi-category product retailer in terms of store network and sales.
Reliance Industries (RIL) is considering listing Reliance Retail on the Indian stock exchanges which are National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) by mid-2019 to unlock value. After a mega listing of Avenues Supermarts, a much smaller company which runs D-Mart brand of superstores, has prompted Mukesh Ambani-owned company to fast forward its plans and is in talks with investment bankers, say sources.
Furthermore, it is good to understand the synergies that Reliance Industries could derive by integrating the customer base of Reliance Retail and Reliance Jio. For instance, a Jio user can get better deals on purchasing products from the online platforms or brick-and-mortar stores of Reliance Retail, whereas Reliance Retail can leverage its deep pan-India presence to increase the number of Jio subscriptions through various offers.
Most of these recent acquisitions and tie-ups are in the telecom and retail sextor where Reliance wants to strengthen its position.
On the retail front, while Reliance acquired Rhea Retail this June, in September it picked up stakes in Genesis Luxury Fashion Pvt. Ltd, GLF Lifestyle Brands Pvt. Ltd, Genesis La Mode Pvt. Ltd, GML India Fashion Pvt. Ltd and GLB Body Care Pvt. Ltd, among others.
“Currently, inorganic is the only route to grow in these segments. RIL has never been in these businesses, and to start from a scratch would need a good understanding and gestation period. Acquisitions or tie up would not only give RIL a jumpstart but also room to expand,”
“E-commerce and new commerce (cash-n-carry, omni-channel) are likely to be key drivers in the future. Here, it is already testing point of sale machine for local merchants who, it hopes, will plug into its supply chain.
Reliance will need to invest to refurbish existing stores too. We expect annual capex rising to over $1 billion over the next few years,” said Jefferies Equity Research in a 1 October report.
While Reliance Jio’s telecom debut in 2016 changed the dynamics of India’s telecom sector dramatically and structurally, Now it is sought that Reliance Retail could possibly do the same on the retailing front. So, what’s in store for the retail mammoth in times to come?