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Reliance to expand fashion store business

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MUMBAI: Reliance Industries Ltd plans to grow the number of low-cost Reliance Trends fashion stores across India to 2,500 from 557 over the next five years and integrate them with its online business, two people briefed on the plans said.


The expansion, which has not been reported before, is the latest move by the conglomerate’s billionaire owner Mukesh Ambani to grab a dominant share of Indian consumer spending in a struggle with rivals, particularly e-commerce giants Amazon.com Inc and Walmart Inc’s Flipkart.


Reliance’s plans to diversify into e-commerce and expand in fashion come on the heels of India’s new foreign investment curbs that have dealt at least a temporary blow to Amazon and Flipkart.


Prime Minister Narendra Modi’s government in December modified foreign direct investment rules for e-commerce, barring online retailers from selling products via vendors in which they have an equity interest, and also from making deals with vendors to sell exclusively on their platforms.


Ambani, Asia’s richest man, founded Reliance Retail Ltd in 2007 to transform his petroleum behemoth into a consumer-facing conglomerate.


Expectations that Ambani will increase bets on retail have been growing, and the latest plan was presented at meetings earlier this year, the sources said, citing proposals the company shared with retail advisers.


Reliance Retail did not reply to an email seeking comment.


The expansion plan should allow Reliance Trends, which sells accessories as well as clothing, to rapidly grow its private labels — the retailer’s own brands — the sources said.


Reliance Trends would be in 300 cities in five years, from 160 now, said the second person briefed on the plan.


A Reliance executive, speaking on condition of anonymity, said integrating the availability of private labels with its e-commerce venture and penetrating deeper into smaller, tier 3 and 4 cities is the next level of growth for Reliance Trends.


The executive did not confirm the store expansion plan. Last year, Reliance Trends opened over 100 stores, according to the executive.


“With the new commerce venture that we have planned, it will even be easier to sell our private labels from even third-party stores,” the executive said.


Ambani’s so-called “new commerce” venture aims to connect small and mid-sized merchants with his retail network and warehouses, helping them better manage inventory as well as boost sales of Reliance’s private labels.


Both the sources declined to be identified as the plans have not been publicly announced. —Reuters


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