With Reliance buying out Kishore Biyani, how will the retail market in India play out and compete with online majors?
Say what you will about Mukesh Ambani, one can certainly not accuse India’s richest man of chilling out during the lockdown. While millions of Indians have been contemplating their lives, Mr Ambani has been on an overdrive. First, he got a host of investors onto his Jio telecommunications platform, and now having secured his group’s future in that industry, he is pivoting to retail. By picking up the assets of India’s largest home-grown retail chain, Future Group, Reliance Industries is doubling down on its already ambitious retail play. What will this mean for retail wars in the future? Whether consumers will benefit as more of them choose to buy products online is something that remains to be seen. However, it is the end of a dream that Kishore Biyani had set himself. Saddled with debt and ill-advised expansions over the years, the man, whom business magazines called the “Rajah of Retail”, will use much of the money he gets to pay off his loans.
The Future Group might have brought in the big discount sales on national holidays but unable to pivot to the increasingly online world of consumers, it was swamped by the likes of Amazon, Flipkart (now Walmart) and other start-ups such as BigBasket and Grofers. The question remains if Reliance Industries will be able to make that shift as well or will it need to shop around a little more. Much has slipped between the lip and the cup when it comes to Reliance and its operations, as ground realities and the customer experience seem disconnected from the grand ambition of the promoters and management. The integrated telecommunications and services play that is being aimed for might work on paper but will the notoriously fickle Indian consumer bite? With incomes devastated by the pandemic, the consumer might ditch brand loyalty for the cheapest prices. That said, by buying a ready group with an established front-end network of stores, often in high-footfall areas and a clockwork back-end logistics chain, Reliance Retail has certainly not done itself any disfavour. As for Kishore Biyani, unfortunately he had to sell his kingdom, but he did create a tremendous network and several high-profile brands and left his mark in Indian corporate history.
Courtesy: The Pioneer