This announcement by Isha Ambani during the Annual General Meeting of is set to stir India’s $110 billion fast-moving consumer goods sector — which is expected to double to $220 billion by 2025.

Isha, who helms Reliance’s retail business, said that the objective of the FMCG business is to develop and deliver high-quality, affordable products which address the daily needs of Indians.

Will it be another movement for the sector?

In the 1980s, took on the might of Hindustan Lever, now known as Hindustan Unilever, and moved ahead of Surf to capture a significant market share. was priced 75% cheaper compared to Surf. In fact, Nirma’s success is also known to have forced Unilever and P&G to launch cheaper clones. After establishing its leadership in economy detergents, Nirma entered the premium segment, launching toilet soaps, Nirma beauty soap and Shuddh Salt.

Hindustan Unilever’s Operation STING, which stood for Strategy to Inhibit Nirma’s Growth, resulted in the launch of Wheel in 1988. Despite the might HUL put behind Wheel to counter Nirma, Wheel could only scale to the top of the market in the early 2000s.

Moving on, is known to deeply undercut its rivals with its private-label FMCG brands which it currently sells at its Reliance Fresh and Reliance Smart supermarkets and hypermarkets.

Taking its private label range to general trade will challenge well-established foreign groups like Unilever, Nestle, P&G, Reckitt, PepsiCo and Coca-Cola and homegrown like Dabur, Emami, Marico, ITC, Godrej Consumer and Adani Wilmar, which last fiscal overtook Hindustan Unilever as India’s biggest FMCG company, clocking a revenue of Rs 54,214 crore.

Reliance will sell products like pulses and grains, edible oil, spices, biscuits, namkeens, ready-to-cook meals, ketchups, soft drinks, fruit juices, tea and coffee.

Brands in the food space include Good Life, Desi Kitchen, Snac tac and Yeah!. In the non-foods space, it has entered categories like soaps, face wash, hair oils, sanitisers, toothpaste, lipsticks, detergents, toilet cleaners and agarbattis. Brands here include Get Real, Puric, My Home, Enzo and Glimmer.

At 6%, Reliance is incentivising super stockists by offering double the margins compared to other FMCG .

So, can Reliance compete against entrenched players on the shelves of the country’s supermarket and kirana stores, the latter of which serve roughly 80% of the retail market?

Arvind Singhal, Chairman & Managing Director, Technopak Advisors says Reliance entry won’t mean others have to lose market share. They may launch new variants without losing profitability. India’s growing retail market can accommodate more players.

Analysts say that Reliance’s move could turn out to be the next big disruption in the FMCG market after Patanjali Ayurved made its aggressive entry into it in 2015. Patanjali had managed to make its presence felt almost immediately, making other FMCG launch their own ayurvedic and natural products. While Reliance Retail’s initial strategy is to take its own brands to general trade, it is keen to make acquisitions and is also looking at regional brands.

After acquiring soft-drink brand Campa, which held an iconic status in the 1980s, Reliance is reportedly in talks to acquire Garden Namkeens, Lahori Zeera and Bindu Beverages and Sosyo.

Since it takes a long time to build brand recall and loyalty, can Reliance quickly establish its own brands in the market? Some of India’s most successful FMCG companies have been in existence for over 100 years as well.

Arvind Singhal of Technopak Advisors adds Reliance’s retail network is its single biggest advantage. They can reach consumers through JioMart and kirana tie-ups. Reliance strategy to acquire old and localised brands is unique.

Reliance has internally set a target of Rs 50,000 crore turnover for the FMCG business. For a company that built its 2 trillion rupee retail business from scratch within 16 years, the target does not seem far-fetched. While Reliance’s FMCG entry will not necessarily pose a threat to their market share, incumbents will have to pull up their socks to compete with the deep pockets of the new player.

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