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April 24, 2023
Samar Srivastava, Forbes India
April 24, 2023
A board meeting scheduled for May 2 promises to be the start of the value unlocking process for Reliance Industries [Disclaimer: Reliance Industries is the owner of the Network18 group, which publishes Forbes India]. Shareholders of India’s largest company, which has a presence in industries as diverse as petrochemicals, retail and telecom, will each receive shares in its financial services unit—Jio Financial Services.
User data—what consumers search for, their demographic profile as well as their likes as dislikes—are available to India’s largest telecom company with 426 million users. If it can use that data to underwrite credit for consumers, it has a winner. Jio Financial is in a unique position.
Loans to India’s middle class have grown at three percent in the last year. Compare that with credit to industry that has grown at a mere seven percent and it becomes clear why the company is keen to spin this off an independent entity and list it separately on the bourses. A successful listing could result in telecom and retail being eventually listed separately.
An analysis by Jefferies, a brokerage, shows that loans to India’s consuming class present a large market opportunity. Home loans account for about ₹25,00,000 crore, auto loans for ₹471,400 crore, consumer durable loans for ₹37,000 crore, and microfinance for ₹280,000 crore. And there is the rapidly growing personal loan segment at ₹79,000 crore. These all present a large whitespace for the company to tap into. Jeffries also points out that a key advantage of the business would be their access to low-cost capital due to the high credit rating to Reliance Industries.
The step also marks an important milestone in Chairman Mukesh Ambani’s aim to cement his position in the world’s list of billionaires. At $83.4 billion, Ambani is rank 9 on the 2023 Forbes list of world billionaires. Since the pandemic in March 2020, the second-generation entrepreneur has started work on a new energy business, strengthened his retail operations with the acquisition of Metro Cash and Carry, and broadened Jio’s subscriber base with the launch of 5G services.
As he sets out to independently grow his businesses, Ambani finds himself occupying the largest retailer spot by revenue. In the last year, store count is up 52 percent to 17,225 stores while revenues are up 17 percent to ₹67,000 crore and profit up six percent to ₹2,400 crore.
Reliance Retail has adopted a multi-format approach. There is Ajio.com and JioMart that make up its online offering. Digital plus new commerce accounts for 18 percent of sales, according to CLSA, a brokerage. Reliance Trends is its cut price fashion format. There is the soon-to-be-launched Azorte to compete against the likes of Mango and Zara, as well as Reliance Brands that houses global names like Burberry, Armani Exchange, Canali and Jimmy Choo, among others. Add to that its private label business with brands like Campa Cola and Independence and the growth drivers for the next decade are in place.
“Reliance has been clear about dominating the landscape in any sector it has entered in the last 30 years, whether it is petrochemicals, telecom or retail,” says Devangshu Dutta, founder and CEO of Third Eyesight, a retail consultancy. He believes the company is getting into many sectors or formats to capture a larger share of the consumer wallet.
At Jio, its strategy to add subscribers (mainly from Vodafone Idea), increase average revenue per user as well as spread the 5G network has paid off. At 426 million users, it is now the largest telecom operator in the country with an average revenue per user (ARPU) of ₹177. The business has delivered a topline of ₹29,195 crore and profit after tax of ₹4,881 crore. CLSA expects the launch of its portable 5G device, Jio AirFiber, as well as an affordable 5G smartphone to drive growth.
Add to this the synergies that could play out with Jio Financial Services. The business starts with a net worth of ₹1,07,200 crore, giving its balance sheet the strength to leverage and make loans. Even a conservative gearing of five times net worth would make its loan capacity ₹6,00,000 crore—or twice the size of Bajaj Finance—today.
In the new energy business, the company is working on plans to commence production at its new gigafactory in Jamnagar. The company is yet to share updates on progress on this front.
These developments have prompted upgrades by brokerages who believe Reliance Industries offers a favourable risk reward as the downside is capped on account of strong profit growth. In a recent report, CLSA termed Reliance Industries a ‘bargain buy’. In the last 12 months, sales were up 36 percent to ₹2,17,164 crore, while profits were up 16 percent to ₹70,782 crore. Still, the stock price is down eight percent to ₹2,346 per share, and its market capitalisation stands at ₹15,87,500 crore, making it the most valuable company in India.
They point to key monitorables being the rollout of its green energy ventures as well as the execution in its 5G rollout. For now, the company has a comfortable position with regard to leverage. In the quarter ended September 2022, Reliance Industries had reserves of ₹7,83,283 crore and borrowings of ₹3,16,030 crore, leaving it with scope to borrow if new business opportunities come its way. Ambani usually uses the Reliance AGM to announce new plans. Expect the next meeting in a few months to possibly come up with some.
(With inputs from Varsha Meghani)
(Published in Forbes India)
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April 21, 2023
Viveat Susan Pinto, Financial Express
April 21, 2023
Retailers of Apple products in Mumbai and Delhi, which account for around 20-21% of the brand’s annual sales in the country, fear the launch of stores by the US giant within these cities may dent their business.
In particular, retailers in the vicinity of these outlets, at Bandra-Kurla Complex (BKC) in Mumbai and Saket in Delhi, say consumers will prefer to go to these company-owned stores rather than make it to their outlets to purchase Apple products.
“That is a visible danger for those Apple retailers who are located near these outlets,” a senior executive at Unicorn Infosolutions, an Apple premium reseller in Delhi and Mumbai, said. Unicorn has 37 outlets in the west and north of India and is looking to its increase its footprint to 75 stores in the next three years.
“You have to keep in mind that the base of consumers for Apple is growing, both in Mumbai and Delhi as well as other cities. It will not be feasible for all the consumers to make it to these outlets. Yes, some high-end consumers may choose to shop at these Apple stores in the two cities, but for those staying away from these stores, it will be difficult to make it to these outlets,” the Unicorn executive said, declining to be quoted.
Nilesh Gupta, managing director of Vijay Sales, an electronics retailer, which has stores in the west and north of India, had reiterated a similar point on Tuesday (April 18), the day the Apple BKC store was launched in Mumbai. He said that he saw the store launches in Mumbai and Delhi as an opportunity for brand-building and further growth in sales.
“Apple is launching just two stores in India, one in Mumbai and the other in Delhi, for now. Even if they launch more outlets, not everyone will be able to make it to these stores, given the size of India and the aspirations of people wanting to own an Apple. The word-of-mouth and excitement going around following the launch will positively impact all of us who stock and sell Apple products in the country. I see more consumers wanting to buy Apple products in the future,” Gupta said.
While Apple has been in India for more than 25 years, it has had no direct retail presence in the country until now. An Apple online store in India was launched around three years ago. In other words, say experts, the Cupertino-based tech giant has depended largely on a network of online and offline retailers, including premium resellers, multi-brand operators and e-commerce channels, for sales in India.
“And Apple will want to ensure that its retail partners are not impacted because of its direct retail foray into India,” says Devangshu Dutta, founder and chief executive officer, Third Eyesight, a Gurugram-based retail consultancy.
“The Apple premium resellers, for instance, may choose to upgrade their retail experience at their outlets to ensure that there is no loss of business, especially in Mumbai and Delhi,” Dutta said.
Apart from Unicorn, some of the other Apple premium resellers in India include Maple in Mumbai and Ample Technologies, which runs the Imagine brand of stores in cities such as Bengaluru and Chennai.
Both the Apple stores in Mumbai and Delhi are high on experience, visitors to these outlets have said, coming at a time when the brand, amongst the most valuable in the world, has clocked a record revenue in India.
A Bloomberg report this week said that Apple had reported a turnover of $6 billion in India in FY23, up from $4.1 billion in FY22.
The Apple craze has drawn huge crowds both to the Mumbai and Delhi stores this week. The retail push will come as the company looks to expand manufacturing in India, experts said.
While Apple has been manufacturing older iPhone models in India since 2017, it began assembling the most recent smartphone models in 2022, with the iPhone 14.
According to the International Data Corporation (IDC), Apple’s iPhone shipments in India stood at 6.7 million units in 2022 against 4.8 million in 2021 and 2.7 million in 2020.
Apple also captured 25% of the ‘Made in India’ smartphone shipments in terms of value in 2022, compared to 12% in 2021, according to Counterpoint Research.
Among cities, Mumbai accounted for 10% of iPhone sales in India, trailing only Delhi, which accounted for 11% of sales, Counterpoint Research said.
(Published in Financial Express)
admin
April 13, 2023
Economic Times / ETRetail
April 13, 2023
There will be blood!
An all-out war has started in India’s FMCG space. At one end are the behemoths – HUL, P&G, Dabur, Marico, Tata Consumer, ITC, and others – and on the other side is the master disruptor, Reliance.
Known to change the market dynamics by venturing into new segments, Mukesh Ambani-owned Reliance Retail Ventures, a part of Reliance Retail, has now set its eyes on India’s over USD500 billion grocery retail market, as estimated by Euromonitor International. And the company is depending on its distribution channel and kirana partners to conquer this feat.
The strategy
In the last couple of years, Reliance Retail has been slowly and steadily developing a distributor ecosystem to take on the FMCG giants. However, its strategy is different from the incumbents.
Helmed by Isha Ambani, Reliance Retail has announced its plans to go big on FMCG with the help of local brands and manufacturers. During its AGM last year, the company mentioned that it intends on launching affordable products.
To carve a niche in the sector, it is using four primary moves:
What can we expect from each of these moves taken by Reliance to take over the FMCG market?
Reliance Retail has been a few years behind in entering the retail space. It entered the e-commerce market as well in 2016. But the delayed entry did not stop it from giving a tough competition to its competitors. Reliance is perhaps planning to repeat the success with its delayed foray into FMCG business as well.
Out of the INR50,000 crore grocery retail market of India, more than 75% is still dominated by kirana stores. And Reliance is not just eyeing the 25%, it is working with kiranas, and hence, targeting the whole market and not just the organised sector.
Let’s deep dive.
Reliance’s ‘selling ecosystem’
The grocery retail market of India constitutes nearly 67% of the country’s total retail market, according to Euromonitor International. Within the grocery retail, the channels are further divided by modern and traditional retailers. The former covers hypermarkets, supermarkets, and convenience stores, while the latter consists of kirana stores.
Kirana stores are the lifeline of grocery retail in India — 75% of all grocery sales happen via this channel. A presence across this channel is imperative for any FMCG brand.
The biggest FMCG conglomerates are available pan-India across majority of kirana stores with their cheapest SKUs as well – this could be the smallest SKU, for example sachets for shampoos, or the largest to make it cost efficient and allow consumers to buy in bulk; read products like detergents.
In India, the grocery retailing is always driven by value and availability, and not just cost.
Reliance Retail Ventures started interacting with the kiranas during the pandemic the way no one had done before. The company decided to become distributors. It sold both its own products, and competitive brands.
Conquering distribution
Distributors form the backbone of FMCG sales in India. While manufacturers sell with no credit timeline to distributors, the latter allows discounts to wholesalers, who then extend a 30-day period of credit line to retailers. Retailers then finally sell the product to consumers.
Reliance is now on its way to becoming one of the most aggressive distributors in the country.
Abhijit Kundu, senior vice-president-research, Antique Stock Broking Ltd, says, “Reliance’s focus on the FMCG industry started with the distribution business. They are essentially creating an entire ecosystem of their own. They are now distributors of their own brands, their acquired brands, and competitor brands, all. And here’s the best part, they are providing one of the deepest discounts to wholesalers as well.”
Almost three years ago Reliance started its distribution business. The company is now developing that and calls it the “selling ecosystem” in its annual report.
According to Reliance Retail’s FY22 annual report, “The company has expanded its physical footprint into tier-II and tier-III markets, bringing the benefits of modern trade to consumers in smaller towns.”
“Extending its reach even further to reach India’s 200 million households, the company is building one of the world’s largest distribution platforms under its ‘new commerce’ initiative by leveraging its extensive supply chain and sourcing capabilities, as well as New Age technologies, to support and enable millions of kirana and merchant partners across the country, assisting them to modernise, provide easy access to a diverse product portfolio, become more efficient and generate revenue,” the report states.
The MCA filing of Reliance Retail Venture’s FY21 report says, “In the lockdown period, Reliance Retail established itself as the ‘preferred’ partner to kiranas by ensuring uninterrupted supply of essential items. JioMart kirana service, now active in 33 cities, launched self-onboarding application, aiding rapid merchant additions.”
Speaking of the developing distribution network of its own by Reliance, Devangshu Dutta, founder, Third Eyesight, says, “Disintermediation, that is removal of middlemen, is a natural outcome of consolidation of the market. However, even in the most developed and some of the most consolidated consumer markets, intermediaries continue to exist because they provide value in terms of aggregation of demand from smaller markets or segments, as well as providing some financial buffer for both buyers and sellers.”
Working with kiranas
What is interesting is how Reliance Retail is engaging with the kirana stores and using their strength to its advantage. The company launched JioMart in December 2019, in phases.
“Reliance is working very smartly as a distributor. Instead of giving deep discounts on all brands, across SKUs, the company is providing deep discounts on the fastest-moving SKUs. Imagine you run a kirana store, technically no one has loyalty only to one distributor or wholesaler. Now, if as a kirana store owner you know you need 10 packets of let’s say Surf Excel, 1 Kg SKU, chances are that kirana will order the same from Reliance, as RRL knows that is the fastest-moving SKU, and hence will give the deepest discount on that. The discounts offered by RRL are almost 15%-20% higher than what any other distributor is providing right now,” says Kundu.
“The same kirana store owner will probably order other things from other distributors, depending on discounts again. What Reliance is doing is focusing on the volume game, and on the fastest-moving SKUs and brands, cause as a distributor they know these will move, no matter what,” he adds.
According to a Kotak Securities report in March 2021, the average number of distributors that a retailer works with is 10-15. And foods, which include staples, dairy, packaged foods, beverages and such contribute 75% of average daily sales.
The same report surveyed at the time of freshly launched JioMart selling ecosystem kirana partners in Mumbai, the count of which was 60, and majority of these kirana store retailers surveyed mentioned that JioMart has lower pricing than other distributors and offers better profit margins. Around 37% respondents also mentioned that Reliance pushed its own private labels while having all brands in stock.
Isha Ambani during the 45th Annual General Meeting of Reliance Industries Ltd mentioned that the company now has a merchant partner base of 20 lakh partners and is adding 150,000 partners every month. The company has five-year plans to cover 7,500 towns and 3 lakh villages.
“JioMart, delivering in over 260 towns, was rated India’s No. 1 trusted brand for online grocery. JioMart works on a hyperlocal delivery model and is India’s largest deployment of omni-channel capabilities,” she said.
“The FMCG and grocery business of Reliance, back in 2021-2022, was nearly INR55,000 crore – INR60,000 crore already. And this was even before the company was involved in brand sales of its own. This was primarily driven by its distributor business,” says Kundu of Antique Stock Broking.
Acquisitions and private labels
Dutta of Third Eyesight says, “Regarding the FMCG and food/beverage brand acquisitions by Reliance Retail, while they are relatively small, they feed into a strategy that side-steps the need to create brands from scratch – both, as private labels for its retail formats and other acquisitions for its broader expansion into other retail channels.”
“Creating new brands takes time and success is not guaranteed, no matter who is behind the brand. Riding on the goodwill and awareness of existing brands provides a shortcut, and further growth can be fuelled by additional resources,” adds Dutta.
Clearly, something Reliance Retail seems to believe as well. Or maybe it just wants to shorten the process of establishing its retail brands’ presence amongst consumers.
One of the biggest acquisitions of the company was Metro Cash & Carry, the German B2B wholesale company. Reliance acquired the latter in a 100% stake sale for INR2,850 crore. This would give a huge leg-up to Reliance’s already burgeoning “selling ecosystem” business.
Speaking about this acquisition Isha Ambani said in the press release, “We believe that Metro India’s healthy assets combined with our deep understanding of Indian merchant / kirana ecosystem will help offer a differentiated value proposition to small businesses in India.”
Metro India, which entered in 2003, was operating 31 stores across 21 cities. The company was servicing nearly 3 million customers via its B2B channel, of whom 1 million (customers) were frequent buyers. As of FY22, Metro Cash & Carry generated revenues worth INR7,000 crore and losses of INR49.7 crore, as reported by Tofler.
In 2021, Reliance Retail also acquired online milk and dairy products delivery platform, Milkbasket. As per its FY22 annual report, the company integrated Milkbasket with JioMart, and there were double the number of subscriptions on the Milkbasket platform. The company seems to have dairy leadership plans as well. Reliance Retail has recently got RS Sodhi, ex-managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF), the parent company of Amul, onboard. Sodhi was associated with GCMMF for 40 years, out of which 12 years he held the position of managing director.
Besides, the company is also targeting the FMCG market with the help of private labels and acquiring brands. Over the last few years, Reliance Retail has spent nearly USD1.1 billion on brand acquisitions – this is across grocery and non-grocery segments.
Reliance Retail acquired Chaudhary brothers’-owned Campa Cola for INR22 crore, and relaunched the brand in March 2023. Moreover, the company has also announced its plans to acquire 50% of the 100-year-old Gujarat-based beverage company, Sosyo Hajoori Beverages.
Prior to that, it acquired 51% stake in Lotus Chocolate Company for INR74 crore and plans to take over an additional 26% of the latter eventually.
In the non-grocery FMCG category, the company has acquired lingerie brand Zivame for INR1,200 crore in 2020, 89% stake in Clovia — another more affordable brand compared to Zivame — for INR950 crore, offline lingerie brand Amante (owned by MAS Holdings) for an undisclosed amount, British toy retailer Hamleys for INR620 crore in an all-cash deal, majority stake in online furniture company Urban Ladder for INR182 crore, majority stake in online pharmacy retailer Nedmed for INR620 crore, and 26% stake of task-runner and quick-commerce app Dunzo for INR1,488 crore.
While not fast moving, but consumer goods nonetheless, Reliance Retail acquired couture fashion brands namely, 52% of Ritu Kumar for an undisclosed amount, 51% of Abu Jani and Sandeep Khosla, 40% of Manish Malhotra’s couture brand, and the company has joint ventures with Anamika Khanna and Rahul Mishra.
In terms of private label, the company recently launched Independence, which will have an array of staples such as edible oil, packaged atta, and packaged pulses, under its umbrella, along with biscuits. Reliance Retail also has private label brands such as Good Life, Snac Tac, Pure It, and Enzo. These brands cut across almost all grocery FMCG categories such as packaged foods inclusive of noodles, home cleaning, beauty and personal care including hand wash brands, dishwash, and floor cleaners.
The company is not limiting itself to only Indian brands – national or regional when it comes to its acquisition strategy. Reliance Retail in February 2023 acquired Sri Lanka-based Maliban biscuits, and plans to bring the brand to India, and clearly will now be targeting the biscuits category as well. Biscuits in India is nearly INR38,000 crore market, with leaders such as Parle Products, Britannia, and ITC.
The bottom line
Reliance Retail is targeting the FMCG market of India from all angles namely retail outlets, national and regional brands, private labels, and distribution.
However, it doesn’t end there. The company is also providing financial services with the help of Jio PoS terminals, which is used by kiranas for both transactions and supply chain management. Jio Financial Services is expected to become the fifth-largest fintech company in the country soon.
The company is not just foraying into the FMCG market, it is on its way to create an entire ecosystem in the FMCG market. While acquiring a consumer is obviously the end goal, it is targeting the spine of the FMCG retail of the country first – the kiranas.
The company has added 2,500 stores in FY22, taking the total count of retail stores to 15,000, covering 42 million square feet. It has also doubled its warehousing fulfilment area to 670 million cubic feet. Warehousing and distribution are at the core of its retail plans, clearly.
“Most retailers in India are small, family-run operations that operate at a subsistence level, and that receive the financial and operational support of the distributors and wholesalers. So, removing intermediaries from the distribution chain in India will take time, unless deep-pocketed players like Reliance decide to explicitly price them out of the market while also providing credit to retailers,” concludes Dutta.
(Published in Economic Times)
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March 23, 2023
Sharleen D’Souza, Business Standard
Mumbai, March 23, 2023
After sparking a price war in the carbonated beverages market through Campa Cola, Reliance Consumer Products has taken the pricing battle to the other segments in the fast-moving consumer goods market.
For instance, in soaps, it has priced its product lower than the market leader in the segment at Rs. 25 for 100 gms across its three brands – Glimmer, Get Real and Puric.
With Glimmer, Reliance Consumer competes with Lux, which sells a 100-gm soap bar at Rs. 36, while Get Real is similar to Hindustan Unilever’s Pears soap bar, which is priced at Rs. 54 for 100 gms. In the hygiene space, Reliance has taken on Reckitt Benckiser’s Dettol, priced at Rs. 40 for 75 gms. Godrej Consumer Products, one of the leaders in soaps sells its Godrej No 1 45 gms (each) pack of 4 for Rs. 40.
In the dish wash category, it captured the main price points of Rs. 5 for 75 gms, Rs. 10 for 145 gms, and Rs. 15 for 200 gms in bars, and Rs. 10 for 65 ml pouch, Rs. 20 for around 140 ml pouch, and Rs. 30 for 200 ml pouch in liquids. HUL’s Vim bar is priced at Rs. 5 for a 60-gm pack and Rs. 10 for a 125-gm pack, while a 300-gm pack retails at Rs. 30.
But Reliance has also moved a step further into the sachet space and is retailing a 5 ml sachet of dish wash liquid at Rs. 1. Other brands do not sell sachets.
On JioMart, the price of RCPL’s Enzo two-litre front-load liquid detergent is Rs. 250, a 43 per cent discount to the maximum retail price (MRP) of Rs. 440; the topload two-litre liquid detergent is available at a 35 per cent discount and now priced at Rs. 250. Its compact detergent powder one kg pack is priced at Rs. 149, after a 12 per cent discount on its MRP of Rs. 170. HUL’s Surf Excel Easy Wash detergent powder is priced at Rs. 150 and Quick Wash at Rs. 240 for a kilogram. But Rin detergent powder is priced for Rs. 103 and Wheel detergent powder at Rs. 73 for 1 kg. Surf Excel’s front load two-litre pack is priced at Rs. 390 and top load at Rs. 370. Tide’s 1.5 kg detergent powder sells for Rs. 225.
In detergents, Reliance has not disclosed which segment it intends to cater to and what price points it will offer in general trade.
Reliance is following the challenger strategy like in the telecom space, said Devangshu Dutta, founder at Third Eyesight. He said this is the fastest way to acquire market share, and since Reliance has deep pockets, it can easily fund market share acquisition by launching its products at a significant price difference compared to rivals.
“Customers will move at least to try the product and if they end up liking the product they will stick to it. This strategy is best suited for market share acquisition,” Dutta explained.
An executive from a top FMCG firm said on the condition of anonymity that there will eventually be a price war in whichever segment Reliance enters. He explained that while Reliance was still setting up its distribution network, over time due to its B2B supply chain, it will be able to push its products into retail
stores.
Some distributors who spoke on the condition of anonymity said it would not be easy to move the leaders in the segment as these companies have a fixed customer base and it might be difficult to topple brands that have been in the market for a while.
Reliance followed the same strategy with its carbonated beverage, Campa Cola. It relaunched Campa at a price point of Rs. 10 for 200 ml, Rs. 20 for 500 ml, Rs. 30 for 600 ml, Rs. 40 for one litre, and Rs. 80 for two
litres.
(Published in Business Standard)
admin
March 15, 2023
Faizan Haider, ET Bureau, 15 March 2023
Value apparel brands are set to grow in India.
The success of Tata Group’s Zudio that sells clothes below Rs 1,500 has prompted Reliance, Shoppers Stop and several global brands to enter the mass-priced retailing segment.
While Reliance Retail is planning to launch a value apparel format, likely to be named ‘Youth’ to compete directly with Tata’s Zudio and Landmark group-owned Max, Shoppers Stop is coming up with a mass-priced brand, internally called InTune, people in the know said.
Aditya Birla Fashion & Retail has been eyeing shoppers in tier-2 and -3 cities with Style Up, a similar format, while affordable French brand Kiabi is in talks with retail space providers and potential partners to enter the India market.
“Although there is a significant concentration of demand in the metro cities and tier-1 cities, these are also hypercompetitive markets. With economic growth spreading into the smaller cities and rising aspirations, especially among young consumers, there is an opportunity for brands to expand into these markets,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.
“However, keeping price-sensitive segments in mind, companies are creating new labels and brands, rather than pulling down their existing brands’ selling price,” Dutta said.
Trent, the Tata Group company that houses retail brands such as Westside, Zudio and Landmark, had earlier said that while Westside accounted for 70% of its standalone business, Zudio had the potential to outpace the department chain due to the size of the opportunity in the value segment.
“While the value format can offer growth in smaller cities, in metro cities the retailers are trying to target youth through this format. The youth is also aware of the sustainability part and most of these brands are focusing on it,” said Shriram PM Monga, who cofounded retail consultancy firm SRED.
Both Reliance and Shoppers Stop are looking for 6,000-9,000 sq ft space at malls and high street for their new brands, said a person familiar with the development.
Experts said India’s consumption structure was skewed in the past over a narrow base of rich consumers accounting for a large chunk of the market. However, as the economy is broadening across many more cities and the impact is reaching further down the income ladder, the opportunity for value formats and value brands is expanding.
For Lifestyle International, its value brands Max and Easy Buy have already outpaced the department stores by sales, indicating that consumers are increasingly seeking either lower-priced merchandise or opting for global brands such as Zara and H&M for fashion apparel instead of department stores.
(Published in The Economic Times)
