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New face of Reliance Industries: From industrial powerhouse to consumer-centric businesses
India's largest private sector company, Reliance Industries Limited is planning to transform itself. From industrial powerhouse, the company is moving towards consumer-centric businesses. The plan consists of three parts- telecom backbone set up by Reliance Jio Infocomm, retail stores expansion by Reliance Retail and an e-commerce platform that will integrate the two.

Mukesh Ambani said in a statement at the 41st Annual General Meeting (AGM) of the company, held last week, "This year will bring about disruptive shopping experience for consumers as they embrace technology and get access to anytime, anywhere shopping. With the advanced Internet infrastructure built by Jio and a robust physical retail business built by Reliance Retail, we will create a differentiated e-commerce model for India."

Mukesh Ambani is replicating the techniques used by his father, Dhirubhai Ambani in late 1970s and 1980s. He marked a prominent presence of Reliance Industries in textile and petrochemicals business and expanded it in oil and gas exploration and production.

Views of experts

Com First Director, Mahesh Uppal said that only Indian conglomerates enter into diverse sectors like telecom, retail, construction, textiles, etc. However, it is only Reliance Industries that is trying to integrate its diverse activities. The company will set an example if it proves its mettle in services sector, he added.

Rohan Dhamija, Partner and Head, India and South Asia, Analysys Mason expressed that any e-commerce company faces the biggest challenge in setting up supply chain and logistics. But, Reliance Retail already has a strong presence in it. Its network will also be empowered with the expansion of its stores.

Reliance Retail's network

Reliance Industries entered the retail business in 2006. The retail stores are present in 200 cities and earned profits since 2013-14. It currently has a network of 2,600 stores with a workforce of 50,000 associates.

900 cities will have such stores, this year. Moreover, Reliance Jio's 4G telecom service will also be launched, this year.

Arvind Singhal, Chairman of Technopak Advisors Pvt. Ltd. is of the opinion that expansion will not be difficult for Reliance Industries as it will be backed with distribution and logistics.

In March, this year, Reliance Retail prepared itself to acquire funds of Rs 4,500 crores. Mukesh Ambani informed in the company's AGM that the business has seen a compounded annual revenue growth of 31% in the last five years, despite of the tough consumer environment.

Integration of businesses

The brick-and-mortar retail stores will form the backbone for the retailer while maximum sales will be generated from its online venture.

Reliance Industries already has an e-commerce presence with its online grocery pilot project. The Chairman informed in the AGM that its fashion and lifestyle e-commerce will be rolled out by the end of this year.

The company will integrate its e-commerce services with Reliance Jio's 4G launch. A strategy consultant said that Reliance Industries may attract customers to its retail network, e-commerce platform and its telecom service by offering bundled packages, special discounts and reward points.

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