The first post in this series – Alien Invaders-India Edition showed how western vendors are leveraging Reliance to enter the Indian market without having to learn how to navigate a complex environment. Reliance is using outside vendors to further bolster their competitive market position. This post talks about the scale.
Global economic uncertainty and likely spillover effects into the Indian retail market often are reflected in enterprise managers conservative decision making in a highly fragmented market. Reliance has been steadily building a cross-India positioning in retail locations, retail distribution, and ecommerce operations. Just in retail locations alone, Reliance will have control of more than 2,000 food markets. It is also adding leases across the 1,500 Future Retail locations onto its roster of locations already including Jio Mobile presence in more than 6,600 locales (counting 7,900 small Jio Stores). Total locations with Reliance nameplates across India may total more than 14,000. Reliance is steadily building a nationwide physical, distribution, and ecommerce presence even in the face of uncertain conditions.
In ecommerce operations complimentary marketing and support from telecommunications mobile network Jio offers leverage thru JioMart and the Jio wallet payment (and Jio services) app.
The agility and resilience of Reliance’ strategies is understated. Reliance is leading with actions in pursuit of a long-term sustainable retail business empire. Consider flexibility provided by agility:
1) The 5% of Indian retail markets held by ecommerce may dramatically increase due to pandemics, Indian middle class purchasing power, or scale economies. Reliance holds leading positions in distribution, ecommerce networks, and retail-websites.
2) Hyper-local brands and intimate geographic market knowledge may be the key to customer acquisition and services across India. Investing in dozens and dozens of brands with retail nameplates everywhere provides presence and local knowledge.
3) Global brands invading India will be serviced by Reliance. Tie-ups with Gap, Office Depot, major electronics brands, and other relationships (franchised or otherwise) will provide Reliance with the ability to pivot, with external capital and reach, in the Indian market.
4) Access to capital and cashflow (from other operations like refining in 2022) provide Reliance with resource strengths not available to other Indian retail conglomerates. The relationship with Apollo Global Management in pursuit of UK Boots-Walgreen retail outlets is an example.
5) Penetration of distribution networks and destroying margins of competitors by expansion of JioMart creates sustainability for Reliance. Even if retail strategies falter or are not completely successful Reliance is embedded into the distribution and payment streams.
6) Multi-brand stores are a key strategy. Reliance can be efficient in use of retail locations. Instead of having to brand/open/close/remodel locations with attendant real estate and regulatory costs Reliance can merely change allocations space, staff, and consumer-marketing in the same locations. Hot consumer fashions, trendy market targeting, and seasonal/regional food specialties can all be changed flexibly by local store managers. Traffic builders from smartphones, food, and business staples drive up the value of real estate locations.
7) Network effects from operations at scale (such as back end datacenter, communications networks, payments processing, and intimate consumer data) drive margin opportunities across lines of business. Simple cross-marketing and traffic building go on to sophisticated targeted advertising, financial services, and distribution networks.
Resilience for Reliance will result from local flexibility and operations at scale.
Sustainability for Reliance will result from wise investments that conserve capital and leverage key global relationships.
Reliance is countering Alien Invasion by global enterprises with a uniquely Indian combination of savvy, on-the-ground attention to detail, and good stewardship of capital and cash flow.
If you’d like to read the first post in the series, you can find it at:
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