Reliance, With Metro To Expand From B2B to Customers
Reliance retail, along with Metro Cash and Carry is to expand consumer business beyond B2B (business to business), to every customer. This comes at the wake of the business deal between Reliance Retail Ventures, which is a subsidiary of Reliance Industries Limited and Metro Cash and Carry Pvt. Ltd. which operates as Metro India. The deal was signed in December 2022, acquiring 100 percent equity in Metro for Rs. 2850 crore.
With this, Metro which had catered to B2B, can now come on field to cater to individual customers with Reliance, the need for complying with the norms to foreign direct investment exists no more as now it has become an Indian Entity, the ET reported.
The deal, which gives Reliance access to Metro’s business will allow Reliance maximise its operations. Reliance will now operate on B2B levels and at its own consumer base. Though the deal took place month ago, the integration of business completed only recently. Under the Reliance market brand, Reliance Retail has 52 B2B outlets which caters to Kiranas and other customers.
In the Metro stores, Reliance plans to have a business strategy where the prices would be at discount for more quantity demanded. With the addition of Metro, the company has plans of increasing presence in the retail market which has many unorganised players as well. The food and grocery market lie within this sphere. Metro’s business includes general groceries, vegetables and fruits, household goods, apparels to various clients like restaurants, hotels, companies, offices and small retailers.
Reliance is expected to use both the models, the traditional and B2B models to capitalise on the market space of kirana stores and the unorganised nature of the market. On this, ET reported as Bernstein report, a research report by a global investment research and analysis firm Bernstein Research, it said, “over 2/3rds of its network stores are in tier-2/3 cities. 75 per cent of store launches were in tier-2 and below towns. Reliance is looking to generate stickiness in these geographies.”
Reliance retail is now, one of the largest organised retailer in the country. Metro was launched in 2003, but showed its incapacity to grow significantly, but analysts are o the opinion that Reliance would be able to tap in and expand business as it has the tools needed for this, like the supply chain strength, the technology and sourcing platforms. This, deal with Metro is expected to aid Reliance in putting up its strong presence in urban areas which has multi category stores. Morgan Stanley, said, “with $1 billion in bolt-on acquisitions in retail and the recent launch of its own brand, we expect RIL to remain aggressive in its retail strategy,” reported the ET.
