Reliance launches offensive against HUL, Nestle, P&G; plans to set up vast FMCG biz

The country’s largest company, with over $100 billion worth of yearly sales, is set to take the foreign multinationals head-on in the consumer goods market. Reliance Industries that already owns the largest retail chain in India and is armed with over two dozen private label brands, is planning to rapidly expand its consumer staples business by acquiring over 50 brands.

According to sources, the conglomerate led by billionaire Mukesh Ambani is targeting the vast consumer goods market that has been primarily dominated by American and European multinational corporations like Procter & Gamble, Unilever, Nestle, Reckitt Benckiser, L’Oreal and Colgate-Palmolive, among others, for nearly a century. In its bid to claim stake in the country’s nearly Rs 7,500,000 crore consumer goods and retail market - third largest in the world - Reliance has set aside Rs 50,000 crore for the acquisition bit.

Reliance’s interests in the consumer goods space is not new. Over the past decade, the group has grown its presence in the organised retail space through its two subsidiaries Reliance Retail Ltd (RRL) and Reliance Strategic Business Ventures Ltd (RSBVL). While RRL has expanded its retail footprint to over 15,000 physical outlets, developed multiple digital properties such as Ajio and ramped up omni-channel play, RSBVL has been the arm for making strategic investments and acquisitions. 

Over the past few years, the group has actively added new brands and expanded its consumer goods portfolio in packaged foods and beverages, personal and home care and fashion, consumer durables and apparel space. Its foray into the fast growing branded F&B space through in-house brands like Snactac (range of snacks, biscuits, instant noodles etc.), Goodlike (pulses, rice and edible oil), Yeah and Desi Kitchen (instant mixed, flours, pickles and blended masalas) have been aimed at the direction. 

Netplay (formal office wear), Performax (specialised activewear), Fusion (fusion-wear for women), AVAASA (ethnic wear for women) and Rio (fashion wear for working women) have led to its rise in the fashion and apparel space. It has also partnered with at least 47 prominent global brands like Armani Exchange, Diesel, Gas, Hamleys, Hugo Boss, Marks & Spencers, Steve Madden, Tiffany & Co in the last few years.

Additionally, a bunch of acquisitions helped it grow its presence quickly. In FY2021-22 alone, the group acquired or invested in fashion brands like Abu Jani Sandeep Khosla, Abraham & Thakore, ak-ok, Rahul Mishra and women’s intimate wear brand Clovia.

According to the company management, it is focusing on developing “its own brand portfolio in categories such as health and immunity boosting foods in grocery, and productivity devices and appliances in consumer electronics”. Additionally the group is “developing a portfolio of own brands for new commerce” with an eye on “exclusive brand licences and own brand products through Reconnect, JioPhone and LYF”, it said in its annual report. In FY2021, Reliance Retail gathered over 75 per cent of its revenue under its fashion and apparel chain Reliance Trends from its ‘own brands’. While for (Reliance) Trends Footwear, the contribution of private labels stood over 60 per cent. 

In FY2021-22, Reliance added 75 new warehouses and fulfilment centres to support its growing retail and consumer goods footprint. The fashion and apparel segment saw revenue jump 55 per cent, launched 750 labels and grew its presence in the small towns. In the consumer electronics and durables space it not only owns one of the largest retail chains - Reliance Digital - but is also pushing in-house products through private labels like Reconnect, resQ, Kelvinator and BPL. During Jan-Mar FY22, it recorded a 50 per cent sequential growth over the festive quarter. “Merchant partners throughout the country, including small towns, offering a wide assortment of electronics and home appliances across categories” were in full swing, the company said.

Its preparations for an all out invasion in the consumer goods space has been in the works for some quarters. During FY22, to strengthen its manpower, Reliance Retail added more than 150,000 new employees - taking the total headcount to 361,000. “In line with the rapid expansion, a high proportion of these jobs will be in the non-metros, the tier 2 and 3 towns and beyond, where the business is rapidly expanding its physical store network as well as digital and new commerce platforms”, it said.

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