Reliance Retail will launch FMCG business this year: Isha Ambani at RIL AGM
Reliance Retail will launch its fast-moving consumer goods (FMCG) business this year, Isha Ambani, director at Reliance Retail Ventures, said at the company’s annual general meeting (AGM).
“The objective of this business is to develop and deliver high quality, affordable products, which solve every Indian’s daily needs,” Ambani said.
She added, “As part of our commitment to India’s rich culture and heritage, we will soon start marketing quality goods produced by tribals and other marginalised communities across India. This will not only provide these communities gainful opportunities for employment and entrepreneurship but also help preserve the incredibly rich talent, skill sets and knowledge base of our traditional Indian artisans, especially women.”
Reliance Retail will take its private-label FMCG brands which it currently sells at its supermarkets and hypermarkets-Reliance Fresh and Reliance Smart, to general trade.
The company had internally set a target of Rs 50,000 crore turnover from the FMCG business.
Business Standard accessed a presentation, which includes the brands it has taken to general trade.
The products, which it plans to sell, range from groceries like pulses and grains, edible oil, flour, dry fruits, spices, pickles, pastes and idli dosa batter. It will also sell snacks, which include biscuits, namkeens, sweets and ready-to-cook meals.
Other products include ketchups, jams, carbonated drinks, fruit juices, breakfast cereal, oats, muesli, honey, sauces, tea and coffee.
Brands, which are in the food space, include Good Life, Best Farms, Desi Kitchen, Snac Tac, Yeah!, Healthy Life, Aw So Yum and Aarambh as well as Kaffe.
In the non-foods space, it has entered categories like soaps, shower gels, hand wash, face wash, hair oils, talcum powder, sanitisers, toothpaste and toothbrush, nail enamel, lipsticks and beauty accessories, among others. The personal care portfolio includes brands like Get Real, Safe Lite, Petals, Mothercare, Calcident, Glimmer, Slimmer, Graphite and Jive.
The home care portfolio includes toilet cleaners, floor cleaners, utensil cleaners, glass cleaners, detergents, agarbattis and camphor balls. In homecare, brands which are hitting the shelf include My Home, Enzo, Snug, Shieldz and Samvaad.
The country’s largest retailer had last year made an entry into the general trade with Puric InstaSafe, which had a range of personal hygiene and home disinfectants. However, its new set of products will have other brands in the same space, which have just hit the market. These are under brands such as Get Real and Safe Life.
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According to a super stockist, Reliance Retail has already begun on-boarding super stockists and distributors during the last two-three months. He also added that there are no targets set, but those will kick-in next month. He said the supply chain is still in the process of being set-up.
Super stockists are also being incentivised with double margins compared to what other FMCG companies offer. Reliance Retail is currently giving super stockists margins at six per cent. Other FMCG companies’ margins are in the range of 2.95-3 per cent.
Abneesh Roy, executive director at Edelweiss Financial Services, said in a note that the brokerage does not expect a big impact on numbers of existing players from a 2-3 years perspective.
The note also added that the track record of RIL in B2C (business-2-consumer) has been mixed. It said that Reliance is not doing that well in jewellery and footwear against initial expectations of the market. Existing players like Titan, Metro and Bata continue to co-exist and do quite well in spite of years of RIL’s presence and decent aggression in advertising spends.
“Getting shelf space in kiranas by new players is very tough. Earlier, few retailers tried to enter FMCG but did not succeed.
FMCG is a daily treadmill with need for continuous innovation, direct reach, robust feet on ground and analytics. This is unlike a wireless telecom business,” the note added.
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