How Reliance Retail Beat the Slowdown to Post Highest-Ever Profits, RIL Invests in Content to Push Media Ambitions

How Reliance Retail reported its highest-ever revenue despite the economic slowdown. To push its media ambitions, RIL will aggressively invest in content.


 

How Does Reliance Do It?: The ongoing economic slowdown has dragged down average industrial growth rates in the country from 12-13% over the past two years to 3-5% today. Yet, amidst the gloomy outlook, one company has managed to stand apart as a gleaming ray of light. Reliance Retail Ltd (RRL) reported its highest-ever revenue and operating profit in the July-September quarter even as Reliance Industries Ltd (RIL) prepares to launch an e-commerce venture to take on the likes of Amazon and Flipkart.

 

A key to RRL's remarkable resilience has been its emphasis on tapping non-metros in India. Store expansion in small cities and towns has given the company crucial (and lucrative) first-mover advantage in these areas.

 

As Gaurav Jain, Head of Strategy and Business Development at Reliance Retail, told Livemint: "Stores in tier II, III and IV towns are where customers are getting a first-hand experience of getting into a modern trade shopping environment. Though these are in markets like Sikar (Rajasthan) or Gulbarga (Karnataka), the number of tickets and footfalls and some of the key metrics pretty much match that of a city like Mumbai."

 

An additional point is that the first-mover advantage means RRL's leases and rents aren't as hefty as they would be in competitive areas, thus lowering costs. Livemint

 

Content is King: Moving on from retail to another burgeoning vertical of RIL - media. Reliance Jio has disrupted the telecom sector and is already India's largest telecom operator. With the aggressive commercialisation plans for JioFiber - the company's home broadband service - RIL is looking to lay the groundwork for its "triple play strategy". This involves offering consumers voice and data services through smartphones, high-speed home internet, and a host of digital services and content.

 

Jyoti Deshpande, President - Media and Entertainment at RIL, told Fortune India, “Our mandate is to consolidate the media and entertainment business, grow the sector and use it as a fuel to grow the distribution business multifold.” And to achieve this, RIL will be actively investing in content to expand its reach. Fortune India

 

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