RELIANCE RETAIL- A FRESH APPROACH TOWARDS RETAILING IN INDIA

RELIANCE RETAIL- A FRESH APPROACH TOWARDS RETAILING IN

INDIA

SUBMITTED BY : RAJNEESH AND DEEPAK

Reliance Industries

Reliance Group• Reliance Industries Limited (RIL) is an Indian

conglomerate company headquartered in Mumbai, India.• The company operates through three business segments:

Petrochemicals, Refining, and Oil and Gas, other segments include Textile, Retail business, special economic zone development and telecom/broadband business.

• RIL is the largest publicly traded company in India by market capitalization and second-largest public corporation in India when ranked by revenue.

• The company is listed on Fortune Global 500 and Forbes Global 2000

• Reliance was found by Dhirubhai Ambani .

• Reliance started with textiles in 1975 .

• Reliance pursued a strategy of integration - in POLYESTER, FIBRE INTERMEDIATES, PLASTICS, PETROCHEMICALS, PETROLEUM REFINING AND OIL AND GAS exploration and production, TEXTILES, RETAIL, INFOTEL and special economic zones.

Major subsidiaries and associates

• Reliance Life Sciences• Reliance Industrial Infrastructure Limited• Reliance Logistics• Reliance Clinical Research Services• Reliance Solar• Relicord• Infotel Broadband Ltd• Reliance Industrial Infrastructure Limited• Reliance retail

Vision

"Growth has no limit at Reliance. I keep revising my vision. Only when you can dream

it, you can do it.“

Dhirubhai H. Ambani

RELIANCE RETAIL

What Is Retail?

Retailing involves selling products and services to consumers for their individual or family use. As the final link between consumers and manufacturers, retailers are a vital part of the business world. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. 

Retail is usually classified by type of products as follows—

Indian Retail Sector

Food Retailers Health & Beauty Products

Home Furniture & Household

Clothing & Footwear

Durable Goods

Leisure & Personal Goods

Food and BeveragesNon veg or Veg

Example

Future Groups-Formats: Big Bazaar, Food Bazaar

Reliance Retail Limited (RRL)

Reliance Retail, Ltd. is a subsidiary company of Reliance Industries.

Founded in 2006 and based in Mumbai, it is the second largest retailer in India.

Its retail outlets offer foods, groceries, apparel and footwear, lifestyle and home improvement products, electronic goods, and farm implements and inputs.

It focuses on consumer goods, consumer durables, travel services, energy, entertainment and leisure, and health and well-being products, as well as on educational products and services

Vision Reliance Retail Limited (RRL)

“Growth through Value Creation”

Various Retail Formats

• Reliance Fresh • Reliance Jewels• Reliance footprint• Reliance Super• Reliance Mart• Reliance Digital• Reliance trends• Reliance Wellness• Reliance Timeout

Strategic RRL

• Based on its core growth strategy of backward integration, RRL has made rapid progress towards building an entire value chain starting from the farmers to the end consumers.

• Open Retails in SEZ Gurgaon, Jhajjar in Haryana• Maturing Metros• Online retailing • Rural Retailing• Innovative Formats like “Wedding Malls”• Strategic licence Agreements

An Overview of Case Study

• RIL’s plan of venturing into the unfamiliar territory of retails.

• RIL retails expansion strategy into India one of retails most promising market.

The Indian Retail scene

• India rank first in A.T Karney study for top international destinations.

• Indian market is of US 350 billion dollar retails market in which 96% held by 12 million family run shops.

• Indian market have currently account for b/w 2 to 6% organized sector of total retail.

• Retail market increased by 15% to 18% year 2011.

THE RELIANCE RETAIL STRATEGY

• Strategic Partnerships• Rapid expansion• Supply Chain from farm to Fork• New ventures• Dynamic Leadership

Strategy Partnership

• Trail partnership with struggling govt. owned cooperative store- SAHAKARI BHANDAR in Mumbai.

• Secondly, Ambani plans to build hyper mart titled RELIANCE MART spread over 180000 sq ft selling all things target 784 towns & eventually expending into big city.

Rapid expansion

• Moving Rapid toward it target of opening and operating 100 million sq ft of retail of 6000 outlet in 784 city & towns by 2010 & 2011.

• Going ahead from retails giants such as Carrefour and Tesco.

Supply chain from farm to fork

• The Reliance ‘AGRO RETAIL STRATEGY’ plan consist of creating a supply chain network that would integrate two of modern India (agriculture and retail)

• RIL plan to capitalize the backwardness of infrastructure of India.

• RIL plan to open 1600 huge procurement & distribution hub title “Reliance Mandis”.

New Venture

• RR using e-commerce as a platform to link its front-end retail with the back-end logistics.

• The two E- commerce strategic is B2B & B2C.• RR is aims at having co- brand credit cards &

consumer finance schemes.• Reliance fresh start customer loyalty program

(from dec. 2006 to march 2007. 50000 member join in Jaipur alone)

• RR plan to enter in non-food FMCG category.

Dynamic leadership

• RR work under Mukesh Ambani owner of flagship petrochemical refinery the 3rd largest in world.

• M. Ambani is top India's richest list with net worth of US 18 billion dollar.

• He joined Reliance Industries in 1981.

Board Memberships

• Chairman, Managing Director, Chairman of Finance Committee and Member of Employees Stock Compensation Committee, Reliance Industries Limited

• Former Chairman, Indian Petrochemicals Corporation Limited• Former Vice Chairman, Reliance Petroleum• Chairman of the Board, Reliance Petroleum• Chairman and Chairman of Audit Committee, Reliance

Retail Limited.• Chairman, Reliance Exploration and Production DMCC• Director, Member of Credit Committee and Member of

Compensation & Benefits Committee, Bank of America Corporation.

SWOT ANALYSIS

STRENGTHPrivate Label sale -own Products (Reliance Select)Contract FarmingNetwork-1600 Channels in villagesBrand EquityGood Financial PositionBackward Integration : Reliance retails is among the few

organizations which entered Indian Retail sector with backward integration.

Demographic favour

WEAKNESS:

staff-Lack of Knowledge about productsParking lack of basic infrastructure like power, transport

and communication Absence of developed supply chain and

integrated IT management.Lack of trained work force & Low skill level for

retailing management.Lack of Retailing Courses and study options

OPPORTUNITIES

farm to fork, No middlemen, farmers-customerRising Consumerism of the Indian High population of IndiaGrowth retail market - Global retail Development Index

– high demand Sectors with high growth potentialFalling real estate costE-retailingRetail franchising and Rural retailPotential for investment

THREATS

International retail and domestic retails e.g. Wal-Mart

Indian governments FDI policy in retailRestrictions on real estate purchases, especially

as imposed by local governments and against "big-box" chain retailers”

Unfavourable taxation structuresHigh competitiveness among existing market

participants and resulting low profit margins

Porter’s five force model

Porter’s five force model5 Forces Analysis

Rivalry among the competitor •Big Bazzar, Aditya Birla Group , Vishal Retail’s, Bharti and Wal-Mart, etc

Threat of entrants • Financial capital max paid up.• distribution •.Government policy•Economies of scale

Bargaining power of supplier •The bargaining power of suppliers varies depending upon the target segment.•Distribution of Raw material.

Bargaining power of buyers • Consumers are price sensitive..•Availability of more choice.•Switch up of consumer

Threat of substitutes •Internet shopping portals

FUTURE STRATEGY

Plans to invest Rs 25000 Crores in next 4 year in their retail division

New Format of food and cafe - Reliance foodPharmacy retails store 6000 outlets -784 citiesLaunch soaps, Detergents, cosmetics and non

FMCG products-Private label

SUGGESTIONS

Expand -ServiceGive training to staffImprove Inventory ControlIncrease supply chainReach to the Rural India.Come up with food FMCG.Work on Markting Mix