Reliance's foray into FMCG can offer stiff competition to biggies like HUL, ITC, Nestle

Reliance's foray into FMCG can offer stiff competition to biggies like HUL, ITC, Nestle

India’s largest business group is entering the FMCG market this year, expanding retail reach in hinterlands and strengthening supply chain...

Reliance's foray into FMCG can offer stiff competition to biggies like HUL, ITC, Nestle (Photo: Reuters) Reliance's foray into FMCG can offer stiff competition to biggies like HUL, ITC, Nestle (Photo: Reuters)

Reliance Retail, the country largest retailer, is all set to challenge the long standing consumer goods giants like Hindustan Unilever, ITC and Nestle India. The company that now stands among the top 10 retailers in Asia, is entering the fast moving consumer goods (FMCG) market this year.

While it has been testing the waters for the past two years with some in-house brands like Snactac to cater to categories like snacks, biscuits and instant noodles; Desi Kitchen in instant mixed, flours, pickles and blended masalas; and Goodlife in pulses, rice and edible oil. These brands were primarily pushed through its own retail platforms like JioMart and Reliance Fresh.

Now, however, Mukesh Ambani, Chairman of Reliance Industries, is planning to take the FMCG market leaders head-on. With nearly Rs 200,000 crore of yearly revenue and over 15,000 modern retail outlets spread over 42 million square-feet under its fold, Reliance Retail (RRL) already enjoys the unique advantage of the greatest retail reach in India. Over the last three years, the company - now led by Reliance Industries Chairman Mukesh Ambani’s daughter Isha - has further consolidated its position through the takeover of hundreds of modern retail outlets ran by Future Retail (Big Bazaar & related brands). 

According to Isha Ambani, Chairman, RRL, this year it will launch its FMCG business, “with an objective to develop and deliver high quality, which solve every Indian's daily needs at affordable prices”.

Given the size of its operations, the latest move by Reliance is expected to have repercussions across the country’s vast FMCG market that is already the fourth largest in the world.

Last year, RRL has catered to nearly 200 million retail customers - up 230 per cent over FY2021, while its digital commerce platforms (like JioMart and Milk Basket) served 600,000 orders on an average every day. According to Isha, RRL’s merchant partner initiate - launched two years ago - now has over 2 million merchants on board. “We add about 150,000 partners a month and are on coarse to 1 crore merchants (partners) as we expand our presence to cover the entire country, serving over 7,500 towns and over 500,000 villages in the next five years,” she said.

To back it up further, RRL has tied-up with Meta (formerly Facebook) to allow consumers to order through WhatsApp.

According to the senior Ambani, while RRL is already a leading player in the modern retail and digital platforms, the company has set a target of increasing its reach in the hinterlands that remains under-served. 

“In this endeavour, our strategy is to integrate with millions of small merchants…the aim is to bring them to become an integral part of the widest distribution portfolio across the country so that they can provide the same choices to their customer that are available in big cities,” he said during the annual general meeting of Reliance Industries. 

Additionally, according to Mukesh Ambani, RRL is also working on to strengthen its supply chain capabilities further so that it can serve across the vast Indian geography in the “most efficient manner”. This will not only help it reduce waste but will also allow the company to pass on the benefits to its customers - which effectively means, RRL will be able to offers products at competitive prices.

Also read: Reliance AGM 2022 LIVE: Mukesh Ambani announces new giga-factory for power electronics

Also read: Meta, Jio Platforms launch JioMart on WhatsApp; check details here

Published on: Aug 29, 2022, 4:23 PM IST
Posted by: Tarab Zaidi, Aug 29, 2022, 2:15 PM IST