Reliance Retail Ventures, a subsidiary of Reliance Industries, will buy Future Group’s retail and wholesale business including its logistics and warehouses for US$3.4bn.
Reliance strengthens leadership position
Reliance Retail is India’s largest retail store operator including 621 Reliance Fresh (neighbourhood stores) and Reliance Smart (supermarkets), 52 Reliance Market (cash and carry), 777 Reliance Trends (fashion retail stores) and 8,000 Reliance Digital (electronics retail stores). With this transaction, the retailer will add another 2,000 stores, including Big Bazaar hypermarket, Easyday, Heritage Fresh and Nilgris neighbourhood stores to its network. The combined businesses will give Reliance control over one-third of India’s modern retail stores. The deal is subjected to approvals by authorities.
Impact on online retail
Reliance Retail also operates JioMart, which delivers groceries, apparel and electronics from its neighbourhood stores in more than 200 cites. JioMart was launched two months ago and competes with Amazon and Flipkart. Isha Ambani, Director of Reliance Retail Ventures said, “we hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands”. We believe that adding Future Group’s strengths in logistics and warehouse operations will accelerate its online growth.