The country’s largest retailer by sales and by number of stores has lined up a host of initiatives to capitalize on the opportunity the subsegment presents
New Delhi: Reliance Retail is now trying to capture big-time a lucrative frontier of India’s consumption story: value retailing.
After cornering a sizeable portion of India’s burgeoning retail market, the $100 billion-valued Reliance Retail is now focusing on the value retailing subsegment in a bid to tap into the growing aspirations of the youth in small-town India, the value seekers and the not-so-affluent urban population.
The country’s largest retailer by sales and by number of stores has lined up a host of initiatives to capitalize on the opportunity—from food to fashion and from beauty to FMCG products.
Reliance Retail has devised a multi-pronged strategy to target this gargantuan segment, two people familiar with the plans said.
Starting August, Reliance Retail is planning to roll out a value fashion and lifestyle format Yousta that will compete directly with Tata’s Zudio and Landmark Group’s Max chain among other players. A person familiar with the plans said Reliance plans to roll out about 200-250 stores of the value fashion format in the coming years.
Similarly, Reliance Retail is piloting Blush Lace, a mass-market retail format, that will sell affordable beauty products and lingerie.
On the other hand, Reliance Industries Ltd.-owned upscale Makers Maxcity mall at Bandra Kurla Complex (BKC) in Mumbai is home to some of the swish food joints like Someplace Else, Pa Pa Ya, Seasaw and Pret A Manger among other restaurants. The Mumbai conglomerate is also looking to shed its elitist tag by introducing affordable F&B offerings.
“Reliance is now planning to add value food and beverages options in BKC,” said a person familiar with the development. “Reliance has a heavy focus on value retailing.”
Reliance Retail did not respond to IndiaRetailing’s detailed questionnaire seeking comments on its value-focused initiatives.
Reliance Retail is currently piloting a new initiative business-to-business-to-consumer (B2B2C) programme in the southern city of Pondicherry that will supply affordable apparel to mom-and-pop stores.
Through this initiative, the country’s largest retailer will also provide the entire backend for mom-and-pop store operators including facilities like product assortment, logistics, store design, data analytics and customer service among a host of other services that the company will soon take nationwide.
“It entails signing up hundreds and thousands of retailers to come onto our platform and get served by us. Basically, we want to add to their income,” Akhilesh Prasad, chief executive for the fashion and lifestyle division at Reliance Retail told IndiaRetailing in a June interview. “So, increasing sales and increasing the margin in sales is our objective. Otherwise, when modern retail opens, traditional retail takes a back foot unless traditional retail is on the same footing as marketers. We are trying to ensure that traditional retail also sells as per the modern retail.”
Selling products to the largest segment of India’s 1.4 billion people or the bottom of the pyramid consumers has always provided vast opportunities for small to big retailers.
“Even as premiumization is making inroads, 90% of India’s overall consumption is going to happen in the value space,” Harminder Sahni, co-founder of retail consultancy Wazir Advisors.
Reliance Retail has underlined the value retailing strategy in its latest annual report.
“Reliance Retail is an indispensable part of the Indian household’s shopping experience not only in metro regions but also in tier 2 and tier 3 cities. Reliance Retail envisions to expand its offerings and scale of operations to make best in class products available to the Indian consumers at affordable prices,” the company said in its annual report. “Customers across ‘Bharat’ to drive next growth phase.”
Reliance Retail already operates over two-thirds of its network of stores in tier 2 and beyond towns with its operations in over 7,000 towns across the country.
Reliance Retail further states in its annual report that it will “continue to expand reach into tier 2 and 3 markets through store network expansion.”
The Mukesh Ambani-led conglomerate has already launched its affordable FMCG products under the ‘Independence’ brand and offers a range of products including edible oils, grains, pulses, packaged foods and other daily essentials.
It plans to “strengthen product and design ecosystem to build an exclusive range of products under own brands that are high quality and offer better value to customers,” the company said in its annual report.
The sources said Reliance’s affordable offerings will only grow from here.
