Mukesh Ambani’s Reliance Industries Ltd is planning to increase the number of affordable Reliance Trends fashion stores across the country to 2,500 from 557. The expansion is to be completed over the next five years and will integrate these outlets with Reliance’s homegrown e-commerce brand Ajio.com.
Plan for expansion, is the latest move by RIL Chairman Mukesh Ambani, to acquire as much market share as possible in the e-commerce space, in order to compete with giants like Amazon and Walmart backed Flipkart. The reports uncovering Reliance’s plans of diversifying its e-commerce arm and expanding fashion have surfaced at a time when rivals Amazon and Flipkart have faced harsh blows due to India’s new e-commerce policy.
In December 2018, the NDA Government announced modifications in FDI rules for e-commerce. The amendments now prohibit online retailers from selling products via vendors in which they have an equity interest, or from making deals with vendors to sell exclusively on their platforms.
Mukesh Ambani, India and Asia’s richest man, founded Reliance Retail Ltd in 2007 with an intention to transform his petroleum leviathan into a consumer-focused conglomerate. Earlier in February, reports had surfaced claiming that Ambani is planning to make Reliance Retail a public company in June this year.
The soon-to-be established stores will primarily be targeted towards 300 cities in the country, a significant bump from the current 160. Speculations about the senior Ambani increasing bets on retail have been doing rounds for quite some time, and the latest plan was presented at meetings earlier this year.
On completion, the expansion would enable Reliance Trends to rapidly grow its private labels. The store currently sells accessories apparels, also from the retailer’s brands. Reliance Trends would be in 300 cities in five years, from 160 now, said the second person briefed on the plan.
Commenting on the new developments, a Reliance executive, said that integrating the availability of private labels with its e-commerce venture and penetrating deeper into smaller, Tier 3 and 4 cities is the next level of growth for Reliance Trends. Though expansion plans have been doing rounds, there hasn’t been any official announcement yet. Reliance Trends added 100 new stores alone in 2018 and planned to aggressively achieve its target.
The executive further added that with the new commerce venture that the company planned, will make it even be easier to sell its private labels from even third-party stores.
The new commerce venture by Ambani aims to bridge the gap between small and mid-sized merchants with his retail network and warehouses. This helps the company to manage inventory as well as boost sales of Reliance’s private labels.
The e-commerce industry is set to hit the $200 billion mark by the end of 2020, and everyone once a part of it. Ambani disrupted the Indian telecom space by launching Reliance Jio Infocomm, offering absolute steals in deals. Same thing is being expected, that Reliance will disrupt the Indian e-commerce scene.
Contrastingly, Reliance Communications owned by Mukesh’s younger brother, Anil Ambani has been in trouble for a very long time, with share prices dropping to all-time low.