Reliance, the largest retailer in India, is making a strategic move in the consumer goods market by acquiring several small grocery and non-food brands. The company, led by billionaire Mukesh Ambani, aims to build a portfolio of 50 to 60 brands within the next six months. To support this expansion, Reliance is also hiring a significant number of distributors to help distribute these brands to mom-and-pop stores and retail outlets across the country.

This move is part of Reliance’s broader ambition to challenge foreign giants like Unilever in the consumer goods market. With over 2,000 grocery outlets and its expanding e-commerce operations through “JioMart,” Reliance aims to tap into one of the world’s largest retail markets, valued at almost $900 billion.

Reliance is currently in the final stages of negotiations with around 30 local consumer brands for acquisitions or joint venture partnerships. Although the total investment for these acquisitions is not disclosed, the company aims to achieve annual sales of 500 billion rupees ($6.5 billion) within the next five years.

By acquiring these niche Indian brands, Reliance will transform itself into a house of brands, directly competing with well-established global consumer groups like Nestle, Unilever, PepsiCo, and Coca-Cola. These global companies have been present in India for decades and have their own manufacturing units and extensive distribution networks. For instance, Unilever’s India unit reported sales of $6.5 billion in the fiscal year ending March 2022, with its brands being widely used across the country.

However, analysts believe that Reliance’s approach of acquiring existing brands could allow it to scale up quickly. To effectively compete with established brands, Reliance will need to focus on pricing and distribution strategies. While the challenge of competing against established brands is significant, acquisitions could provide Reliance with a faster path to growth, according to consumer analyst Alok Shah.

Currently, Reliance primarily generates revenue from consumer goods by selling and distributing products from other brands in their retail network. Its own private labels generate only $450 million in annual sales. Foreign companies have expressed concerns about Reliance’s supermarket strategy, where their own brands compete with Reliance’s private labels for shelf space.

Reliance’s focus on acquiring popular Indian brands is evident in its negotiations. For example, it is in talks with Sosyo, a brand known for its soft drinks, for acquisition or a joint venture partnership. The brand belongs to Hajoori, an Indian company with a long legacy. While Hajoori’s director did not comment on the speculation, it is clear that Reliance is targeting established Indian brands.

The company has been actively expanding its consumer business and has hired senior executives from companies like Danone and Kellogg Co. Its job postings on LinkedIn indicate a focus on categories such as staples, personal care, beverages, and chocolates for initial launches. Reliance is also hiring mid-level sales managers in over 100 cities and small towns to support its expansion efforts.

Overall, Reliance’s ambitious plan to acquire small consumer goods brands reflects its determination to challenge industry heavyweights and solidify its position in the Indian consumer market. With its extensive network and resources, Reliance is poised to make a significant impact and reshape the consumer goods landscape in India.

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Reliance Retail
Indian Consumer Goods Industry