Mukesh Ambani-led Reliance Industries' retail arm Reliance Retail Ventures Ltd has entered the FMCG industry. After taking the telecom industry by storm with Reliance Jio, the oil-to-telecom conglomerate aims to do the same in the FMCG industry
With sweeping plays in modern retail, kirana connects, FMCG, apparel brands, in-house financial services, and with revenues closing in on Rs 2 lakh crore, Reliance Retail is sending shivers down the spines of long-time FMCG giants
By partnering with local kiranas, RIL is utilising these existing outlets across the country through tie-ups instead of trying to replace them with branded stores
Prior to RIL, FMCG giants including HUL, Nestlé, ITC too, sought to develop a D2C business that avoids the traditional distribution route. However, Reliance Retail's pace of growth is unprecedented
Reliance Retail is working to strengthen its supply chain so that it can service the vast Indian geography in the most efficient manner. This will allow the company to pass on the benefits of reduced costs to its customers. It is also working on building warehousing capacity
Given the nature and spread of the local market, last-mile connectivity is the greatest challenge any major player faces in this sector. However, by setting up a distribution network - by tying up with over 10 million existing small to medium outlets, Reliance Retail has come up with a unique proposition for them
Locally run businesses provide market credits to the millions of small and medium retailers. In order to provide market credit to its retail partners, RIL has chalked out a plan to service them through Jio Financial Services (JFS)
Reliance has also deployed a dual strategy of acquiring dormant but legacy brands like Campa Cola, and fully or partially acquiring or tying up with existing regional players like Sosyo and Maliban, or supply chain providers, to get access to distribution, brand and manufacturing capabilities and operate in the same space
According to experts, Reliance’s go-to-market strategy is simple: Operate on economies of scale to keep costs in check; cut intermediaries to reduce distribution expenses and improve access to consumer shopping patterns; and offer products at a lower price than the competition
RIL’s plan envisions an efficient, last-mile connected network of stores and kiranas, which in turn would be provided with every aspect of support in terms of logistics, products, financials, billing and accounting, among others
While leading firms in the consumer goods market are attempting to develop a super app that can give access to all their products and services to potential consumers, Reliance has already managed to establish MyJio as a super app for most of its offerings
MyJio app now allows anyone to shop across its grocery, pharma, telecom, fibre, streaming, news and media, digital banking, edtech, cloud storage and UPI payments offerings. RIL has also tied up with Meta to allow consumers to order through WhatsApp
“We add about 150,000 partners a month and are on course to [reach] one crore [10 million] merchants as we expand our presence to cover the entire country, and serve over 7,500 towns and over 500,000 villages in the next five years,” said Isha Ambani, Executive Director of Reliance Retail Ventures Ltd (RRVL), during parent company RIL’s annual general meeting in August 2022
“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,” said RIL Chairman Mukesh Ambani at the 2022 AGM