- 16 May 2022
- ICICIdirect Research
RELIANCE RETAIL TO USE INORGANIC ROUTE TO BUILD CONSUMER GOODS BRAND PORTFOLIO
RELIANCE - 1205 Change: -25.15 (-2.04 %)News: As per media reports, Reliance Retail plans to build a portfolio of 50 to 60 grocery, household and personal care brands within six months. The report further says Reliance is in final stages of negotiations with around 30 popular niche local consumer brands to fully acquire them or form joint venture partnerships for sales. it is targeting building its own consumer goods business to challenge foreign companies operating in Indian market. Reliance has set a goal to achieve Rs. 50000 crore ($6.5 billion) of annual sales from the business within five years
Views: The acquisition of local brands in the space would enable Reliance Retail to scale up faster than an organic foray. Reliance Retail already has the largest retail footprint in India and these brand acquisitions would enable reliance to reduce dependence on third party brands and promote its own brands through its retail network and grow at a fast pace and acquire decent size in a shorter period. Through foray into own brands the company will be able to price their products attractively in their stores and drive revenue growth and capture higher proportion of customer wallet share
Impact: Positive