Mukesh Ambani, who has disrupted the telecom services space, is now setting his sights on the vast and lucrative fast-moving consumer goods market. This market is already the fourth-largest in the world.
Ambani’s Reliance, armed with a plethora of fast-moving packaged food and beverages (F&B), today inaugurated its in-house brand Independence in the market. To start, it chose the Gujarat market where Ambani and his family originate from.
Since acquiring Independence, the group has secured an impressive variety of packaged goods items. These include wheat flour, crystalline sugar, besan, and toor dal as well as branded rice, biscuits, edible oil, and packaged drinking water – just about covering all major F&B categories.
The Director of Reliance Retail Ventures, Isha Ambani, announced the launches by saying-
“I am happy to announce the launch of our own FMCG brand INDEPENDENCE which brings a wide choice of high-quality and affordable products including edible oils, pulses, grains, packaged foods, and other daily needs products. The brand stands for ‘truly Indian solutions for real Indian problems’ which is articulated as – ‘Kan Kan Mein Bharat’, thereby evoking emotional attachment and instilling a sense of inclusiveness amongst Indians.”
The F&B brand is owned by Reliance Consumer Products Ltd., which is a subsidiary of Ambani’s consumer business, Reliance Retail Ventures (RRVL). In addition to the recently launched FMCG business, RRVL also operates the conglomerate’s retail business. With over 16,500 outlets, 2 million merchants, and close to Rs 200,000 crore in yearly turnover, RRVL is by far the largest retailer in India.
Ambani’s recent plans to enter the FMCG market have pitted Reliance against some of India’s leading consumer goods companies, such as ITC, Tata Group, and Britannia.
Although ITC is the largest player in the packaged wheat flour market, with over Rs 3,500 crore in sales from the category, Tata Consumer Product’s Sampann is aiming to take a large share of packaged kitchen items like pulses and spices. Britannia and Parle also dominate significant shares of the biscuits market in India.
Sources say that, though Reliance would stick to the Gujarat market for some time and build its F&B brand from there, the project has been launched to test waters.
Reliance Consumer Products already has an advantage over other FMCG manufacturers because of its RRVL parent, and the large network of modern retail outlets it can utilize. The company plans to eventually expand its F&B portfolio throughout India.
Last year, RRVL served nearly 200 million retail customers – a 230 percent increase from the previous year. Its digital commerce platforms (such as JioMart and Milk Basket) received 600,000 orders on average every day. Isha stated that the merchant partner initiative – which launched two years ago – now has over 2 million merchants enrolled.
At the annual general meeting of Reliance Industries in August, she said-
“We add about 150,000 partners a month and are on course to [reach] 1 crore merchants (partners) as we expand our presence to cover the entire country, serving over 7,500 towns and over 500,000 villages in the next five years.”
For extra assurance, it has partnered with Meta (formerly Facebook) to let people order through WhatsApp.
The senior Ambani stated that even though RRVL is already one of the top companies when it comes to modern retail and digital platforms, they want to increase their reach in areas that are not well served.
At the AGM, he said-
“In this endeavor, our strategy is to integrate with millions of small merchants…the aim is to bring them to become an integral part of the widest distribution portfolio across the country so that they can provide the same choices to their customers that are available in big cities.”
In addition, Mukesh Ambani stated that RRVL is also focusing on enhancing its supply chain capabilities to cover the entirety of India in the most time- and resource-efficient way possible. Not only will this help the company reduce waste, but it will also allow it to pass on benefits to customers in the form of lower prices.
It seems that Reliance Retail Ventures is leaving no stone unturned in its bid to become the leading FMCG retailer in India. With the parent company’s resources and the ever-growing network of retail outlets, it will be interesting to watch how Mukesh Ambani’s FMCG offensive against the likes of Tata, ITC, and Britannia plays out in the future.