Reliance Might Expand Its Grocery And FMCG Businesses By Using Private Labels

Share Us

460
Reliance Might Expand Its Grocery And FMCG Businesses By Using Private Labels
01 Sep 2022
min read

News Synopsis

Reliance Retail, which intends to enter the FMCG industry, is probably going to concentrate initially on groceries and commodity goods because they allow it to scale up more quickly than high-priced branded goods where players like Hindustan Unilever, Nestle, and Marico are well-established and have strong brand recognition.

According to analysts and industry professionals, it's crucial to create a brand and value proposition that appeals to consumers in FMCG. Reliance Retail has the capacity on both of these fronts in terms of staples and commodities, and as a result, the company can grow in size in a year or two.

“The key piece in commodity play is to be able to handle supply and a brand can be very profitable if you have that. Reliance has a good handle on supply in groceries, and now they only have to scale up,” according to to Akshay D' Souza, chief growth and insights officer at Bizom.

Although challenging a well-known brand like Maggi or Coca-Cola would be difficult because it takes time for consumers' tastes and preferences to change, D' Souza stated that the branded commodity market is a sweet spot for Reliance.

Consumers constantly search for a value proposition, as far as they are concerned. Any new entry, no matter how big or little, will find a room, according to K Ramakrishnan, general director of Kantar Worldpanel's South Asia region.

In the areas of commodities, and essentials like beans, clothing, footwear, and home care items, Reliance Retail already has its own brands. During the company's annual general meeting on Monday, Isha Ambani, director at Reliance Retail, stated that its own brands contribute about 65% of total revenue.

TWN In-Focus