Reliance Retail, the retail arm of Reliance Industries Limited, has witnessed exponential growth in revenues in the last few years. The company is growing through organic and inorganic (acquisitions) means and bringing new efficiency and resilience to the country’s retail market.
In the last quarter, the company posted a 23% increase in net profit in the third quarter while revenue expanded 53% to 50,564 crore rupees. Moreover, the company has invested in a number of startups in the last few months in order to utilize technology to expand business operations and make them more efficient.
Reliance Retail invested $200 million for a 25.8% stake in Dunzo, a quick commerce player, entered into a business deal with Roposo and Glance. Moreover, the company acquired a majority stake in Noida-based 5G technology-enabled Robotics startup Addverb. This month, the company placed orders worth 1 billion dollars the company that builds robotics and automation solutions for factories and warehouses.
The deployment of state of art technologies like Robotics by Addverb and Artificial Intelligence by companies such as InMobi will make Reliance Retail highly efficient.
After the Reliance and Roposo deal, Naveen Tewari, the CEO of InMobi owned Roposo said, “We are partnering with Reliance Retail to provide the e-commerce back-end for a new generation front — a commerce experience of influencer-led entertainment and commerce.”
“It actually became a great way to do commerce. That is what we are replicating here. It will take 3-6 months. We are talking about integrating the back-end system,” he added.
The use of modern technologies, availability of capital, the scale of operations, and brand value will make Reliance Retail a formidable player in the e-commerce as well as the physical retail industry.
Previously, Reliance chairman- Mukesh Ambani said that the company plans to move consumer business from the energy sector. Emphasizing the focus on digital services business, “In this new world, data is the new oil. And data is a new wealth,” said Ambani in Vibrant Gujarat Summit.
Mukesh Ambani has made it clear that Reliance retail is looking for aggressive expansion and the company wants consumer business, which contributes only 20 per cent to the total revenue, to contribute as much energy and refining businesses by 2025.
Previously, the company announced that exclusive brands like Best Farms, Good Life, Masti Oye, Kaffe, Enzo, Mopz, Expelz and Home One are currently available only on Reliance Fresh, Reliance Smart and Reliance Market stores will be available at local stores. The company will distribute the products with the help of distributors.
Reliance Retail adopted a very innovative approach to e-commerce with its online to offline (O2O) strategy. Under the O2O model, the company delivers goods to Kirana stores at 15-20% lower prices than offered by dealers and thus serving the small shopkeepers rather than eating into their business.
The company’s transition from refining and petrochemical business to consumer business is clearly visible in the last quarterly results. The consumer and retail businesses of the company have registered profit and grown exponentially over the last few years.
Mukesh Ambani is known to work for a monopoly in the markets, similar to his father. In the early days of the business, his father monopolized the thread-making business, and he achieved the same in the private sector refining and petrochemical business. Now the company is trying to monopolize the telecommunication market and retailing business.
There is not an iota of doubt among analysts that Ambani-led Reliance will give tough competition to existing e-commerce players as the history of its operations in other sectors suggests. The future of e-commerce in India looks exciting, and it’s a piece of good news that an Indian company is challenging the monopoly of a greedy American giant like Amazon and Walmart (through Flipkart) which are eating into the profits of small shopkeepers.