Wal-Mart can wait; Reliance retail brand arrives

Wal-Mart can wait; Reliance retail brand arrives
Hyderabad, Oct 29 (PTI) Investors love it, marketmen cannot do without it, but Reliance Industries feels its retail initiative needs a new brand identity that would inspire customer confidence and loyalty beyond reason.

Even as rivals like global retailer Wal-Mart and local aspirant Bharti are waiting in the wings to tap opportunities offered by India's huge retail market, RIL will today unveil its retail brand ahead of Friday's launch of the company's first neighbourhood store here.

The neighbourhood store, which would sell goods ranging from grocery to garments, is one of the many formats that Reliance would rollout in the days to come.

While it would have been easy and rational to piggyback off RIL's brand image, company Chairman Mukesh Ambani's wife Nita Ambani felt that the retail business must be distinct from the parent company, industry sources said.

The launch of the neighbourhood store in this city would be followed by the opening of mega stores in Mumbai, Delhi and Ahmedabad, besides luxury stores across the country.

Reliance Retail is already in talks with global luxury brands such as Gucci and Calvin Klein in this regard, the sources said.

The neighbourhood stores would also have two distinct formats -- Field Fresh and Field Fresh Plus -- with the first selling vegetables, fruits and groceries. The other version would vend perishables as well as apparels.

These stores represent the front-end of RIL's farm-to-fork project, which involves procuring farm products through agri hubs, establishing a supply chain and providing logistics and finally retailing the products. (More)

The entire layout, including design and architecture, of the retail stores has been done by Nita Ambani, who has in the past designed the Dhirubhai Ambani Knowledge City in Navi Mumbai, besides the Reliance Retail headquarters in NOCIL complex in Mumbai.

Nita is also incharge of branding, communications and people outreach, including corporate social responsibility initiatives.

The Reliance Retail blueprint envisages a nation-wide chain of hypermarkets, supermarkets, discount stores, department stores, convenience stores and specialty stores at an investment of over Rs 25,000 crore in the next five years.

While the initial investment could be Rs 3,375 crore, the company expects the retail business, which would be headed by Manoj Modi, to yield Rs 90,000 crore in revenue by 2010.

"By this year end, there would 300 stores and in three years, 4,000 stores," a source said.

Industry estimates suggest that India's retail industry is worth 300 billion USD (Rs 13,50,000 crore) and could grow to 427 billion USD in the next four years. Of this organised retail accounts for just over Rs 35,000 crore.

The sheer potential for organised retail in the country, with a population of 1.1 billion including a 300 million-strong middle-class, makes it an attractive market for foreign retailers who have reached saturation point in other markets.

While the government's reluctance to allow FDI in retail sector has poured cold water on the plans of foreign retailers like Wal-Mart and JC Penney, Reliance could soon see competition from Sunil Mittal-promoted Bharti Group, which is searching for a partner for its retail project.

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