Reliance aims to become a house of brands 

India’s Reliance conglomerate is reported to be poised to move aggressively into the FMCG space, with plans to build a portfolio of up to 60 grocery, household and personal care brands within six months.

That’s according to Reuters, as reported in The Hindu, which cites a source saying “Reliance will become a house of brands. This is an inorganic play.”

What we know 

• Reliance already operates a network of grocery outlets and is expanding its JioMart e-commerce operations. 
• Reuters’ sources explain that a new business unit, Reliance Retail Consumer Brands, will house the various niche and regional consumer brands the company is currently negotiating to acquire or form joint ventures with. 
• An “army” of distributors is being recruited to take those brands to both kirana stores and modern retail outlets.
• Reliance is said to be targeting Rs 500bn ($6.5bn) of annual sales within five years.

Why it matters

If confirmed, Reliance would be throwing down the gauntlet to the multinationals that currently dominate this space. Its private-label products already compete for space with big-name brands in its supermarkets. 

Key quote

“If inorganic is the route for Reliance, they will be able to scale up much faster. But they’ll need to get the pricing and distribution right to compete with bigger rivals” – Alok Shah, consumer analyst at Ambit Capital.

Sourced from The Hindu BusinessLine