Reliance Retail to expand beyond 500 towns

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Mumbai: Reliance Industries Ltd will expand its retail network to cover the entire country, going to towns where it does not have a physical presence, the company said. This is likely to be done using a hybrid online-offline model.

“With multi-channel initiatives for grocery and apparel under its belt, Reliance Retail will extend its reach to cover the entire country much beyond the 500 towns where its physical stores are operational,” the company said in its annual report.

RIL already has an online retail presence. Last fiscal, it launched Ajio.com, a curated fashion and lifestyle portal, and reliancefreshdirect.com for selling groceries online.

“The next phase of growth for retailers will be by adopting omni-channel models and creating win-win alliances,” said Sreedhar Prasad, partner, strategy and operations, KPMG India, a management consultancy and auditing firm. This will also bring down the cost of servicing existing consumers who shop online with them, he added.

Retailers have been vying for a larger piece of the online pie for some time now, although their digital strategies are still in the works.

For instance, Kishore Biyani-led Future Group, which runs chains like Big Bazaar and Food Bazaar, has been experimenting with e-tail since 2007 with the launch of Futurebazaar.com. This was relaunched in 2010 but never took off. Now, the group is piloting a groceries delivery model with Amazon in Bangalore. On Thursday, Biyani announced that customers will be able to make payments at any store via Paytm wallets. Later this year, the company will also launch bigbazaar.com making yet another attempt at having its own omni-channel strategy in place.

Others such as the Tata group, Aditya Birla Group and Arvind Group have in the past year launched their own fashion and lifestyle e-commerce ventures that offer an integrated online-offline experience. For instance, they also allow consumers to order online and collect at the stores or visit the store and get the goods delivered home.

For Reliance Retail, the big digital push will happen on account of mobile services that are to be launched with sister company Reliance Jio Infocomm Ltd.

Chairman Mukesh Ambani has described Jio as the world’s largest start-up in the past and the company has invested close to Rs.1.5 trillion in Jio so far. The company is creating an entire ecosystem with Jio which comes with its own device, a free SIM card, a data plan, own media content, apps such as JioChat and JioPlay, besides an expected integration with its retail businesses once it is launched.

“It will be interesting to see how they will bring their physical retail infrastructure and digital networks and consumers together to create a new paradigm to the whole e-commerce story in India,” said Sandeep Ladda, partner and national technology and e-commerce Leader, PriceWaterhouseCoopers, a consulting firm.

Reliance Retail’s revenues grew at 22.5% to Rs.21,612 crore in financial year 2016. It makes up about 7% of Reliance Industries Ltd’s consolidated revenues. During the year, Reliance Retail added 624 stores, taking its total store count to 3,383.