Mukesh Ambani led Reliance Industries Limited (RIL) is now aggressively focusing on capturing the retail segment in the country. The energy giant’s retail arm – Reliance Retail is aiming to become second to none in the wholesale market by the end of this year. It has already initiated a furious expansion drive with special focus on the wholesale cash and curry segment. “Reliance Retail plans to take the battle straight to multinational chains operating in the wholesale cash and carry segment and choke them in that area with all its might,” said an official. From the expansion plans of Reliance Retail can be deduced that it will over perform as compared to any non-Indian company in the wholesale business that generates healthy profits effortlessly. For this indigenous upcoming retail giant, wholesale business is now taking top slot in their priority.
Recently, the government issued some clarifications on the multi-brand retail FDI policy that includes foreign retailer’s inability to acquire existing retail businesses and to make new investment of $50 million at least in back-end infrastructure. These changes however will affect the international giants from capturing the regional market immediately and will restrict them to cash and carry segment only.
A senior official from a foreign cash and carry company said, “The hearsay is they (Reliance) want to become the number one player in wholesale by the end of the year.” Another senior official from Reliance said that the expansion plans for Reliance Retail were announced during the annual general meeting of the company held earlier in this month. The company has set targets for the employees to drive revenues across all costs. “They are not doing this business for now; they are looking at the next ten year horizon. In that sense, they are headed towards becoming Indian Walmart,” added the official.
The cash and carry segment on which Reliance is focused at the moment holds a great future in India. According to industry experts’ estimation, cash and carry in India will become a $22 billion market by 2017 and the market leader in this segment will do a business of about $4-5 billion in yearly turnover. With over 10,800 crore in annual sales, Reliance is just 2,000 crore away from its biggest competitor Future Retail. The company also got Randy Guttery, a former managing director for Metro in Vietnam, on board to head the enterprise.
As a step towards execution of expansion plans, Reliance Retail plans to open 15 more stores from the current store count of 1466. It plans to open more stores in between April and September. Some of them are already being operational. Reliance Retail will soon become the country’s leading retail chain.
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