With a sharp focus on building scale with speed, Mukesh Ambani, Chairman, Reliance Industries today informed shareholders that Reliance Retail aims to expand rapidly across Indian cities, and will onboard over one crore merchant partners over the next three years.
Speaking at the Reliance Industries AGM today, he said, “Reliance Retail continues to be the undisputed leader in organised retailing in the country, with scale that is more than six times the next competitor. We are by far the leader in each category — grocery, electronics and apparel.”
“Over the past fiscal, Reliance Retail added 1,500 stores. We took our total stores to 12,711 stores. Today, one in every eight customers shop with Reliance Retail. We aim to become one of the top 10 retailers globally,” he added.
Reliance Retail sold over 18 crore units of footwear and apparel last fiscal — enough to dress the population of the UK, Spain and Germany once, he pointed out.
Ajio, the fashion e-commerce platform from Reliance Retail, contributes to 25 per cent of the company’s apparel revenue, he added.
Speaking about the company’s grocery retail division, Ambani said: “JioMart registered over 6.5 lakh peak orders in a single day. Its growth is a testament to its already loyal customer base, 80 per cent of whom are repeat shoppers.”
He further said that JioMart New commerce’s aim is to transform and grow the small merchant ecosystem, so that the platform’s merchant partners prosper.
“Over the past year, over 3 lakh merchant or shopkeeper partners across 150 cities were enabled and empowered to transform their businesses both physically and digitally.
“We have seen a 3x growth in kirana orders and 2x growth in order frequency. Expansion across cities is well underway and we will onboard over one crore merchant partners over the next three years,” he said.
Reliance Retail accounted for as much as 10 per cent of the company’s total revenue in Q4 FY21.
Earlier this week, global investment bank and financial services company Goldman Sachs said in a report that Reliance Industries Ltd (RIL) is likely to see its online and offline retail businesses driving the company’s growth, marking a powerful evolution for the largely-petrochemicals-powered giant, says a report from
The report noted that that after growing 5x over FY16-FY20, RIL’s core retail revenue growth has taken a pause in FY21 due to COVID-related macro headwinds.
“However, we believe retail business (including e-commerce) is set to be the next growth engine for RIL, with potential for retail EBITDA to grow 10x over the next 10 years,” it said.
Even during the disruptions brought about the Covid-19 pandemic, RIL focused on investing in end-to-end digital capabilities and the scale-up in omnichannel commerce is driving sizeable market share wins, Goldman Sachs said.
It predicted a 6x increase in modern grocery retail penetration in India by FY30, coupled with 15 percent market share gain for RIL.
It also forecast a 50 per cent market share for RIL in online grocery by FY25, with a 30 per cent market share in overall e-commerce. This translates into USD 35 billion e-commerce GMV (gross merchandise value) for RIL by FY25, with USD 19 billion in grocery.
“We expect RIL core retail revenue to grow at a 36 percent CAGR over the next four years to USD 44 billion and e-commerce revenues to be 35 percent of total retail revenues in FY25, at USD15 billion,” it said.
“We value RIL retail business at USD 88 billion in our base case with our offline business valuation similar to comps and online business valuation at the high end of the peer group given higher GMV growth. We also highlight our bull case valuation of USD 120 billion based on stronger than expected macro growth and market share wins.”