The Hindu Business Line : Reliance Retail gets going

Power launch, super launch, hyper launch. Call it what you will, but Reliance Retail's much-awaited launch of 11 Reliance Fresh outlets — which sell fruits, vegetables and dairy products — at one shot in Hyderabad last week undoubtedly turned out to be the mother of all launches. The frenzied international and national media lapped it all up as Reliance top guns — minus Reliance Industries Chairman & Managing Director Mukesh Ambani, though — were measured with the information they gave out about the company's future plans.

At the post-inauguration press conference, Reliance officials tried to reach out to the media about what they claim may eventually turn out to be a revolutionary change in the history of Indian shopping. The heat soon settled what with uniformed Reliance staff serving chilled water to all — only to lead the heated media swarming to bombard company officials with a whole host of questions. The questions were many — why Hyderabad, why now, size and type of investment, time frame of expansion, number of total stores, will it kill marginal farmers and local kirana shops and push cart vendors, pricing, quality, quantity and anything meaningful one could come up with. The Reliance executives, including K. S. Venugopal, Head, AP Operations and chief executive (CE) - Customer Solutions, Gunender Kapur, President and CE - Foods Business, Raghu Pillai, President and CE - Operations and Strategy, and Sanjeev Asthana, President and CE - Agri-Business, were tactful in replying to the questions, without actually giving too much away on Reliance's roll out in other cities, except the broad contours of its plans.

And, Reliance executives were gung-ho the day after the launch. A senior Reliance executive said that the stores were doing "extremely well." The 11 stores saw an average of 25,000 customers pouring in with average bill sizes "upwards of Rs 100." Each of the stores are expected to sell around five tonnes of fruits and vegetables a day but, an executive said that the second-day response was so good that each store sold over 10 tonnes!

Asked how Reliance compared in prices to the local market, Raghu Pillai said: "Indeed, we are competitive but our USP is the range and freshness that we will offer, there will be at least 170-180 SKUs (stock keeping units)." Taking off from the 11 outlets in Hyderabad, Reliance intends to saturate the city with Reliance Fresh outlets — three times more than it has now — so that the brand has a good geographical spread in the city. The present 11 stores are meant to serve as a pilot project to "listen and learn" from consumers, the company says, before it begins a rapid roll out across the country.

The figures are mind-boggling. Reliance intends to invest Rs 25,000 crore in its retail venture and targets sales of Rs 1 lakh crore by 2011 through what by then is expected to be a national chain of supermarkets and hypermarkets selling almost everything under its roof. Once the learnings from the Hyderabad experience are gleaned, the roll-out is expected to be rapid: Reliance says it expects to have stores in 784 cities and 6,000 small towns in the country.

Says Arvind Singhal, head of retail consultancy Technopak: "Nowhere in the world has a project started on such a scale - it has taken just 15 months from planning to execution." Singhal points to another promise of Reliance, describing it as unprecedented: that it intends keeping prices of staple vegetables uniform through the year, partly through storage and also by working closely with farmers and changing cropping cycles. Now that the launch brouhaha is over, it is now up to the Reliance juggernaut to keep up the act, every day, even as the retail venture rolls on to scores of other cities.

At first hand

Namaste, greets the Reliance floor assistant, as you enter the upmarket Banjara Hills stores after the press conference held adjacent to the store. The practised greeting is meant to put the customer at ease.

As you stroll around the store, you realise the décor is very simple yet striking. The design and styling of the stores took a lot of research and inputs from not only India but also abroad, says Jai Bendre, head of Reliance's foods marketing division, Mumbai. "Particular care was taken to keep local tastes in mind. Therefore, we took inputs from local specialists as well."

Stocked on the stands are fresh, inviting vegetables. The prices too seem reasonable. In fact, one customer, Devi Malliramani, a housewife, said, "Tomatoes outside are sold at Rs 10 a kg today and here it is just Rs 7. I hope it continues like this." Elaborating on the range available, Bendre says: "It is our endeavour to bring in as much variety as possible; at the same time we have taken care to label them with care, for example, if we label Bhindi as Okra alone people may not quite understand."

Asked too about the staff's uniforms, pat comes the reply: red denotes brightness, power, warmth, optimism, dynamism and auspiciousness while green signifies nature, freshness and health. These colours blend with the traditional Reliance blue, denoting reliability, seriousness and calmness, they explain. While claiming to take along farmers and small shops and vendors and even customers as partners in this huge retail mega project and not just food products and vegetables, dairy products, grocery, but also entertainment, pharma, music and a whole range of other areas spread throughout India, Reliance is sure relying big time on its smart marketing acumen. Not to mention that it has hired the best retail talent there is.

More Stories on : Retailing | Diversification | Reliance Industries Ltd

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