Mukesh Ambani-led Reliance Industries Group is in the midst of a major strategic shift away from oil to consumer-facing fashion and child-centred retail, reports say. The top Indian company by market cap is looking to buy foreign retail brands in sports and beauty as part of its expansion into the consumer market, a Reuters report said.
The swing of the oil tycoon, whose company owns world's largest refineries in Gujarat, away from hydrocarbons began with a foray into the mobile telephony, a field from which he had been excluded until 2014 by the terms of a deal with younger sibling Anil Ambani. The launch of Reliance Jio and JioFiber has had a disruptive impact on the telecommunication sector with Reliance Jio triggering a wave of consolidation.
Reliance Brands, the consumer business arm of Reliance Industries, already runs high-end lifestyle stores with some 40 partners including Burberry, Steve Madden, and Iconix. A watershed in the group's strategic shift has been the acquisition of Hamleys, the world's oldest toy store chain in $88.5-million deal in May. Reliance Brands had been the India partner for Hamleys until then. The Reliance Group, which has now earned a lot of fiscal freedom with the Aramco deal, could replicate the Hamley's model with other brands that it represents in India, according to some industry observers.
"The Hamleys acquisition ... has already whetted our appetite," Reliance Brands CEO Darshan Mehta said told Reuters. "Internationally, much of brick-and-mortar retail is in a lot of pain," the report quotes him as saying. "No wonder – what may have once been available for 100 is now available for 50."
Western companies "overbuilt" their store estates and did not see the "e-commerce gorilla" sneaking up, Mehta said. "Look around and you will always find many of them up for sale, whether it be in New York, London or Milan."
The Reliance Group has the luxury of waiting for the opportune moment to move in with acquisition proposals as there is no time frame, Mehta said.
Reliance is India's biggest brick-and-mortar retailer in terms of revenue and number of stores, according to the report. Ambani, who Forbes says is the world's 13th richest man, is also pushing his foray into grocery and wholesale businesses.
Reliance Brands' products are available in 788 locations including brand outlets, shopping malls, and airports. The company is planning to open another 120 stores in India in this fisc.