Reliance Industries – Dutch Uncles

Luxury and Retail Industry Luring ABFRL and Reliance

Shalmoli Sarkar — Mon, 01 Nov 2021 04:06:05 +0000

In the recent few months, the piqued interest of conglomerates taking significant stakes in the luxury and retail industry especially in luxury and retail is something unlikely. Here is how the conglomerates have been going with the stakes.
Reliance Retail has acquired a 52 percent stake in the luxury fashion brand Ritu Kumar which was its second investment within a week after acquiring a 40 percent minority stake in Manish Malhotra.
Equally wanting to firm its claws in the luxury and retail segment, Aditya Birla Fashion Retail Limited (ABFRL) in January 2021 took a 51 percent stake in bridal couture brand Sabyasachi followed by a 33 percent ownership in Tarun Tahiliani’s men’s ethnic wear range. Back in 2019, the retail conglomerate had acquired Finesse – an apparel brand from Shantanu and Nikhil.

This puts forward a question what is luring the conglomerates to own stakes in the luxury and retail industry?

Ethnic wear market: no more a blindspot for retail biggies

The total Indian ethnic wear market has a size of Rs 70,000 crore, according to Technopak in which almost 80-90 percent of the market is unorganised. Given its unorganised nature, several conglomerates found the ethnic wear market a tough nut to crack. But, in the past decade ethnic wear brands like W, Aurelia, Fab India, and Biba have changed the narrative by introducing an organised format. Today, the above mentioned have carved a niche for themselves by becoming Rs 1000 crore brands and have revealed the potential of the organised ethnic market to catch the eye of these majors.

Moreover, what makes it deliver profits, in the long run, is its strong resilience to apparel cycle fluctuations. As compared to western wear Indian traditional outfits such as sarees, kurtas, lehenga cholis, sherwanis, Kurtis, etc are hard to go obsolete in styles and are least impacted by global brands.

Aspiration for better lifestyles and high purchase power is also driving the migration of buyers from the unorganised to organised retail in tier II and tier IV market and the increased shopping from the e-commerce only brands.

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Aspiration for better lifestyles and high purchase power is driving the migration of buyers from unorganised to organised retail in tier II and tier IV cities.

Value, premium, and luxury

The conglomerates are expanding their retail offerings to cater to the customers of all three segments ie. value, premium, and luxury. Reliance retail under the brand Trends is its economic range. With its recent initiative to introduce its new brand Avantra, it wants to target the mid-premium ethnic wear category and with the recent stake in Manish Malhotra and Ritu Kumar, it will foray into the luxury segment. On similar lines, Aditya Birla with Pantaloons is now targeting the premium segments by owning stakes in Tarun Tahiliani and Sabyasachi.

Entering into the luxury and retail segment

The preventive measures to contain has impacted these luxury brands causing their businesses to shrink by 30-35 percent and therefore needed funds to stay afloat. This is where the luxury brands and the conglomerates formed a symbiotic relationship as now the brands will now be available at lower valuations. As India accelerates its vaccination rate the restriction on weddings and festivities will be eased and is expected to bounce back and grow by 20 percent in the coming 4-5 years.

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Vani Kola and Mukesh Ambani’s Common Enthusiasm

Anju Nambiar — Fri, 19 Mar 2021 00:35:05 +0000

Start-up and small-business owners woke up to a day of rejoicing following Vani Kola’s (founder of Bengaluru’s leading Venture Capital firm, Kalaari Capital) email. Mukesh Ambani’s Reliance Industries came on board Kalaari Capital’s Fund no. 4 as a Limited Partner (LP) with his Anchor Investment.

Mukesh Ambani had been watching from the side-lines as the Indian start-up world was bubbling with enthusiasm coming from both investors as well as investees.

But Ambani is what Ambani does and both Urban Ladder and Zivame emerged victorious when they were picked to receive Reliance’s gracious hand over them.

The 15th of November saw Reliance Retail Ventures stake its claim on 96% of Urban Ladder in exchange for 182.12 crores.

Vani Kola, MD of Kalaari Capital and Mukesh Ambani – India’s richest man’s shared enthusiasm reflected in their start-up uplifting spree.

In a bid to possess a bigger online retail portfolio than his arch nemesis Amazon.com, small but sturdy e-commerce companies including Urban Ladder and Zivame ended at the receiving end of Reliance enthusiasm.

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Vani Kola, MD of Kalaari Capital and Mukesh Ambani - India’s richest man’s shared enthusiasm reflected in their start-up uplifting spree.

What does this mean for internet start-ups?

Kalaari Capital and Vani have already been blessing consumer internet retail start-ups but having a blue-chip investor like Reliance join hands on this fervour spells good news for more online portals trying to break through into the tech start-up bubble.

The $200 million deal between Vani Kola’s Kalaari Capital and Mukesh Ambani’s Reliance Industries is a celebration in the e-commerce space.

Notable e-commerce companies like Myntra and Snapdeal owe their presence to Vani Kola and Kalaari capital. Now that Mukesh Ambani has boarded ship, fledgling e-tail companies like Urban Ladder and Zivame have a chance at the opportunity of a lifetime.

What’s in it for me?

Mukesh Ambani’s interest towards ecommerce start-ups has occurred in bursts. It first looked like he was holding back or disinterested especially when big players were already in the game. But he suddenly seems to have discovered the right opportunity to arrive on the scene and acquire promising start-ups without mercy when other investors had backtracked.

Start-ups with a novel idea in e-commerce have a chance at becoming an investee by differentiating themselves. The Indian e-commerce sector is not a place for stretching your legs. It’s already saturated with unique and innovative products and services. To be a worthy contender, start-ups need to sharpen their focus beyond the limits towards targeting consumers.

The biggest development that has culminated from this deal is that struggling e-commerce start-ups in India who were feebly attempting to take on big league names with foreign investment will and are already flocking to Reliance.

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How Reliance Retail Rose to the Top of the Mountain: A Success Story

DU Desk — Tue, 16 Mar 2021 04:35:05 +0000

When you think of India, what generally comes to mind is the immense population, the crowded city streets and a diverse socio-cultural ecosystem, all of which gives way to one very important factor that makes India one of the fastest-growing economies in the world. That factor is the customers. And who has a larger stake in the market or dominates it more these days than Reliance Retail and its parent company Reliance Industries Limited (RIL)?

You name it and chances are Reliance probably owns it or is a major player in that segment of the market. Everything from Petroleum, textiles, fashion, telecommunications, media and even retail comes under the ambit of this industry behemoth, making it one of the largest and oldest companies in India and making its CEO Mukesh Ambani, one of the richest men on the face of the Earth. For the purpose of today’s deep-dive, this article will be focused on Reliance Retail specifically and the success story behind this historic establishment that has pushed the Indian economy to the forefront of the global game.

Reliance Retail: A Brief Overview

The Reliance Retail initiative by the Reliance group marked the company’s entry into the e-commerce and retail game in 2006. This aspect of the business is a multi-faceted beast that caters to customers across a wide variety of sectors in the retail and e-commerce industry. Since its inception, the organisation has grown exponentially and allegedly stands as the country’s largest retail platform.

While being such a massive company may bring in an idea that it is a very luxurious brand and only sells high-end products, but that is not the case. The very concept of Reliance Retail was conceived under the notion of bringing high-value goods to customers at a reasonable price, a democratisation of commerce if you will, the thing that sets the company apart from the rest is the sheer volume of diversity that comes under the ambit of the retail branch-off.

Reliance Retail operates and maintains a wide network of neighbourhood stores, supermarkets, online and speciality stores as well as wholesale cash and carry stores across the country and caters to millions of Indians every day. In the food and grocery segment Reliance Retail handles Reliance Fresh, Reliance Smart and Smart Point stores. In the electronics product’s category, there are Reliance Digital, Reliance Digital Express Mini stores and Jio stores (which we have become very familiar with over the last few years thanks to its vast location network.) In the Fashion and Lifestyle game, you might have seen stores like Reliance Trends, Trends Women, Trends Man, Trends Junior, Project Eve, Reliance Footprint and even Reliance Jewels.

Of course, what discussion about Reliance would be complete without the mention of Ajio.com, reliancedigital.in and JioMart that together dominate India’s e-commerce industry? To say that it has a diverse range of products and subsidiary brands is an understatement at this point.

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Reliance Retail is all about bringing value to customers and democratising the retail industry, which is what makes them a front-runner in the race.

Reliance Retail: The Business Model That Paved the Way

Dominating the Market: Start-ups Centric

Reliance as a whole is infamous for how it takes over the market, and that is by targeting and acquiring start-ups and businesses by the bucket-full. While the RIL does have stakes in energy, petrochemicals, textiles, natural resources, retail, and telecommunications that come under the ambit of its own brand name in different branch-offs like Reliance Trends, Reliance Digital and so on, a lot of its success is attributed to the heavy absorption of other businesses which are brought under the brand umbrella.

Since the majority of these businesses already have a certain level of market penetration and working business models of their own, Reliance merely provides somewhat of an upgrade to that using its brand identity, reach and funds to rapidly overtake the market in that particular segment using that business. A good way to envision that tactic is to look at these companies as the tool or vehicle that Reliance uses to expand its reach in the various industries. It is an effective and smart model.

To that end, RIL has some noteworthy start-up acquisitions such as Embibe, Fynd, Grab, Haptik, Reverie, Saavn, Tesseract, Den Networks and Hathway Cable & Datacom Ltd., Hamleys, Netmeds, Asteria Aerospace, NowFloats Technologies, Radisys, Big Bazaar, Balaji Telefilms and Eros International that make up the ranks of the mainstream market penetration formula.

Reliance Retail is a subsidiary that takes this method a step further and currently stands, allegedly, as the biggest retailer in India with over 12,201 stores across 7,000+ cities across India with many of the subsidiaries of retail like Reliance Fresh, Reliance Footprint, Reliance Digital, and Reliance Trends having arrived in most urban areas of Tier 1 and Tier 2 cities.

With this angle, Reliance Trends covers everything from groceries to fashion, footwear, luxury goods like jewellery, e-commerce and even electronics which gives the subsidiary company a wide reach and a great deal of diversity for potential customers to choose from. This feeds the funnel in a very crucial manner.

On the other hand, the fact that they have tapped into the start-up market makes for somewhat of a symbiotic relationship. As Reliance gets the rapid expansion it seeks, small businesses and business owners have the added advantage of being included under the brand umbrella which pulls in a lot of foot traffic for their brick-and-mortar stores as well as their online platforms for those who primarily feature there. Given that India is home to the third-largest start-up ecosystem after the United States and China, it explains how this company has climbed the ranks to the top over the years.

Reliance Retail: Bettering the Lives Campaign

In a unique approach, Reliance Retail has included farmers in its marketing and growth strategy. When you go to the grocery store, you expect fresh vegetables, fruits and other agrarian products for your day-to-day needs such as the wheat that makes up a fresh loaf of bread or the onions you need to cook every day. The point being, we all want the freshest and most authentic farm to table foods, and that is exactly what the ‘Bettering the Lives’ initiative is all about.

Through this expansion campaign, Reliance Retail partners all of its grocery stores with farmers and small producers to bring that farm-to-table approach into reality. This plays to the strengths of the brand being a customer-centric one and at the same time brings these producers to the forefront of the retail business and provides them with some much-needed growth and support as well.

This hyperlocal approach helps not only bring a diversity factor to the brand’s products but aids in making the shopping experience a much more customised one since everything is localised as it should be when it comes to groceries. With that said, this effectively covers the hyperlocal aspect of the company’s reach.

Marketing and Promotion: An Ace Up the Sleeve

Much of Reliance Retail’s publicity comes from the efforts of the parent company RIL and as such, it is a well-known brand. How do they do it you ask? The answer to that lies in the company’s ability to identify what the customer wants and where their attention is. As Indians, our primary pass-time in this country is Cricket, a sport we are known to obsess over, to the point that it penetrates the vast majority of our national mainstream news and media outlets. Reliance saw this and seized the opportunity.

In January of 2008, RIL and CEO Mukesh Ambani acquired the Mumbai Indians team and the accompanying franchise. This proved an instrument of monumental proportions as the brand’s name skyrocketed from there in the public’s eye.

Additionally, Reliance also roped in the Bollywood actor Hrithik Roshan for its Reliance Telecom branch which appealed to the star-power aspect of the marketing plan. With so much celebrity and sports clout giving it the wind under its wings, the company managed to garner a lot of eyes on the business side of things, which greatly boosted its revenue across the subsidiary brands including Reliance Retail. Things were taken a step further when Reliance subsidiary JioMart, which comes under the retail wing, partnered with Facebook-owned WhatsApp to push social media presence for the brand. With this kind of 360-degree perception and marketing execution, supplemented by aggressive brand image building it is no wonder why it has become a household name.

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Reliance has a multi-pronged marketing approach that engages in the start-up community, provides diversity on a hyperlocal level and makes use of star-power and endorsements to push its reach. It is a genuine 360-degree strategy.

The History Behind Reliance Retail and Its Success

Reliance trends only saw its genesis in 2006, but the success and history of the company stretch all the way back to 1966 when RIL, then known as Reliance Textiles Engineers Pvt. Ltd. was established by Dhirajlal Hirachand Ambani, Mukesh Ambani’s father. Back then it was just a textiles industry that manufactured textures for textiles and slowly grew from there.

The organisation held its IPO in 1977 and in 1985 the name was changed to Reliance Industries Limited, and the rest, as they say, is history. Given its roots, Reliance as a whole, stands as a true legacy brand, being one of the oldest and largest corporate institutions in the country.

Currently, most of us are aware of the clout and infamy that the company has garnered over the years. In October of 2007, RIL became the first Indian company to cross $100 billion market capitalisation and now holds the ranks in the national and international league thanks to the smart business tactics of Mukesh Ambani who really puts the legacy in legacy business as he is the second generation in his family to continue the business his father started all those years ago.

A true rags-to-riches story, Dhirajlal Ambani worked every day of his life to make sure that he and his family never struggled the way his parents did. Today his son continues his dream and stands as the 11th richest person in the world with a company that is pushing India as a nation to the forefront of the retail industry. So, in a way, more than being his father’s legacy, Reliance Retail and RIL stand as India’s Legacy as it continues to pave the way forward in innovation and market dominance.

For more inspiring stories visit our Inspire Section.

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What Was Reliance Industries Earning from Mumbai Indians?

Tanisha Achrekar — Tue, 16 Mar 2021 02:35:03 +0000

IPL is one of the biggest sports events in the world. Several teams competing with their best domestic and international players. While which is the best team is quite a subjective matter, there is only one who has won the most IPLs. The Mumbai Indians team is owned by IMG-Reliance, the sports arm of Reliance Industries Ltd. Mukesh Ambani, Chairman of Reliance Industries, had bought the franchise of Mumbai Indians back in 2008 for over $100 million. Since then Reliance and Mumbai Indians have been inseparable.

Mumbai Indians is the most-valued franchise in the IPL. So much so that Mukesh Ambani is titled as the world’s second-richest sports team owner. The team has enhanced its reputation with its continual winning and non-controversial status. They have the best of the best players and an overall well-rounded team for every season.

Mumbai Indians and Reliance – The most fruitful partnership

When a franchise is bought in a humongous and extravagant sporting event like the IPL, there are several branches for a business to expand its earnings. Especially for IMG-Reliance, who own the best of the lot. A major chunk of the revenue is generated from sponsorships, central revenues, ticket collections and even merchandising deals. Along with that, teams like Mumbai Indians who have won the most IPLs are also awarded prize money.

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As of 2020, Mumbai Indians has won the most IPLs.

How are things going for Reliance and Mumbai Indians?

In the year 2020, the whole world was adversely affected by COVID-19. In IPL, the revenue generated with tickets was the lowest due to the coronavirus. Mumbai Indians still managed to close 36 sponsorships deals even in such an adverse situation. The revenue earned by the IMG-Reliance was record-breaking. They enriched their portfolios significantly in the sponsorship business despite being in the business for mere four years. Some of the official sponsors of Mumbai Indians for IPL 2020 were Balkrishna Industries Ltd (BKT), Usha International, Kingfisher, Colgate, William Lawsons, Dream11, MakeMyTrip, Boat, Mai Dubai, Performax, Reliance Foundation, DNA Networks, Radio City 91.1 FM and Fever 104 FM.

With millions of viewers watching IPL on television and other millions enjoying it on the OTT platform, the sponsorship business of IPL has grown many folds. IMG-Reliance holds one of the most popular and performance-driven teams in the IPL. This enables them to cash on revenues from all the spheres. Being the leading franchise of the IPL in 2020, its brand value is over 70 million dollars. In 2021, these numbers are only expected to get higher as with the coronavirus norms being eased and more people are likely to come to the stadiums as compared to the last year. Also, the television and OTT views of Mumbai Indians are soaring as high as their flooded stadiums. An estimate of around an increase to 77 million dollars in brand value alone is a possibility in 2021 along with more sponsorships and more ticketing revenue.

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