Reliance Retail, India’s Largest Organized Retailer with Growing Revenue and Store Network: Report

Reliance Retail — which has grown its retail footprint by 39% (in square feet) since the pandemic, added multiple brands and expanded its digital commerce — will further swell its network with the addition of Future Retail stores that have fallen under its fold after the landlord could not pay the lease rent, analysts said.

Bernstein, in a report, said Reliance Retail is India’s largest organized retailer, both in terms of revenue and store network. It has 14,412 stores in India spread over 40 million square feet.

Its turnover has been multiplied by 5 over the last five years. Core retail revenue of $18 billion is higher than its competitors combined, he said, adding that a compound annual growth rate (CAGR) of 40% was the best in his category.

“The company has implemented an end-to-end retail strategy across ‘new commerce’, offline retail and e-commerce,” Bernstein said.

It is 3x better than the closest competition and has seen consistent growth across all categories. “Grocery saw double-digit growth, apparel and electronics doubled year-on-year. Digital/new commerce accounts for 20% of core retail.”

Major retail categories including groceries, consumer electronics and apparel continued to grow strongly. Non-essential retail has the “connectivity business” which is the primary distributor of Jio services (recharging and customer acquisition) through Jio stores/retail partners.

“We expect Reliance Retail to grow at a CAGR of 30% in FY22-25 while growing margins,” he said.

According to company data, the mix was 21.2% for groceries, 27.4% for consumer electronics and 8.3% for fashion. Within non-essential retail, connectivity was 34.3% and petroleum retail 8.7%.

The Connectivity business is the primary distributor of Jio services (recharge and customer acquisition) through 7,900 Jio small-format stores and more than one million retail partners (mom and pop stores).

Jio Stores offer one of the largest distribution networks (6,600 municipalities) for brands of mobile phones, tablets and accessories. Firm Mukesh Ambani has taken over operations of at least 200 stores from Future Retail and offered jobs to its employees after the Kishore Biyani-led group failed to pay rent to landlords.

Reliance Retail, the retail arm of oil-telecom conglomerate Reliance Industries, had agreed in August 2020 to take over the retail and logistics operations of the Future Group for 24,713 crores, but the deal could not be completed as Future’s warring partner Amazon went to court for breach of certain contracts.

Future denies any wrongdoing. Future, which has more than 1,700 outlets, including popular Big Bazaar stores, has not made lease payments for some of its outlets.

Faced with the closure, Reliance transferred the leases of some stores to its indented subsidiary, RRVL and sub-leased them to Future to operate the stores.

Reliance is building its new business by targeting 15-20 million Kirana stores that will be used to fill orders from nearby customers. The new commerce grew 3x year-over-year in October-December and is now available in 3500 cities.

“Reliance Retail offers lower prices than other retailers, better level of service for onboard kiranas on the B2B platform, credit for working capital. Kirana’s digitization strategy provides brands with reach to merchants, better analytics. Consumers can order directly from kiranas through JioMart,” the Bernstein report said.

The company also has a strong portfolio of premium brands that it can exclusively market on its platform. Reliance Retail added 50 leading Indian and international brands in the last quarter. Affluent Indian consumers are increasingly focusing on premium brands that enhance their lifestyle choices. As a result, premium has become the fastest growing category.

This story was published from a news feed with no text edits. Only the title has been changed.

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