- RIL’s subsidiary
Reliance Retail has invested in over seven private labels and formed two private labels in the last two years. - It also sells 50 high-end international brands like Steve Madden, Jimmy choo and Armani in India.
- According to a report by Forrester Research, India is home to 8.6 million luxury brands consumers.
RIL’s subsidiary Reliance Retail has invested in over seven private labels and formed at least two private labels in the last two years alone to strengthen the line of lifestyle brands under one umbrella.
This is in addition to the 50 high-end international brands — like Steve Madden, Jimmy choo, SuperDry, Diesel, Gas, Armani, Burberry, Hugo Boss and others — that the company is selling in India under
Apart from the three lingerie brands, all the other brands that Reliance has invested in are luxury brands.
What has compelled Reliance to go after owning Indian brands?
“Reliance is utilising its current infrastructure and team under Reliance Retail to increase wallet share from customers by acquiring brands, which are well established. Their core business isn't centered around launching their own labels but managing retail (offline and online) for brands that they partner with,” Neha Khanna, director at management consultancy firm ValPro, told Business Insider.
She further noted that the acquisition directly adds to their revenue without much associated operating expenditure.
Madhur Singhal, managing partner and chief executive officer (CEO) of Praxis Global Alliance, explained that there are three main advantages to following such a strategy for any business.
First, the new age consumers are more experimental and their purchasing behaviour has a huge impact on the development of new business strategies.
Second, such a strategy is even more helpful when running an ecommerce business as the brand is able to meet the needs of a digital consumer who is willing to try new-age brands. Third, when a brand undertakes a ‘house of brands’ strategy, it is able to scale each of these brands to the extent, which they would have otherwise not achieved while growing individually.
“If all small brands are consolidated under the house of brands then they get the right scaling economies to grow in terms of advertising, sales, etc. It also gives economies of scope as it increases the potential of cross-selling products and services,” he added.
A report by Fortune India citing sources $4 that Reliance Industries is trying to be a ‘Walmart Plus Amazon’ with its recent spree of acquisition across sub sections of the retail industries.
According to a report by Forrester Research, India is home to 8.6 million luxury brands consumers. Reliance Retail’s rival Aditya Birla Fashion and Retail Limited (ABFRL) has been trying to go after this segment by acquiring stakes in brands like Sabyasachi, Tarun Tahiliani, Shantanu & Nikhil, among others.
According to market and consumer data site Statista, revenue in the Indian luxury goods market amounts to $6.6 billion in 2022.
“Even in a pandemic, the shares of luxury brands such as LVMH and Hermes have doubled. This showcases how resilient the luxury can be and how spending continues in this segment. With rising disposable incomes and a well-travelled and younger customer demographic in India, Reliance and Aditya Birla understand the importance of making luxury brands more accessible,” Khanna said, adding that these brands are trying to tap into [the] Indian consumer’s spending capacity.
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