Reliance Retail opens 9 Reliance Fresh stores around New Delhi


India – Reliance Industries, one of India's top business conglomerates, hopes its recent entry into the retail business will bring in 1 trillion rupees (R165 billion) in sales over the next four to five years.

The company today opened nine Reliance Fresh stores in five satellite towns around the national capital region to sell vegetables and groceries. The stores have been structured on the lines of international retail giants Wal-Mart and Safeway.

Around the country, Reliance has opened 49 stores so far. By December, it aims to open 1 000 stores in India, where the booming retail market – estimated at $200 billion (R1.5 trillion) a year – is dominated by more than 12 million mom-and-pop shops.

"By 2010/11, our total revenue should be in the region of 1 trillion rupees," said Raghu Pillai, chief executive of the company's retail business.

Large, air-conditioned stores remain a rarity in India, even as rising middle-class incomes and an increase in demand for branded products are driving a retail surge there.

Reliance plans to invest about 250 billion rupees to build a nationwide network of procurement and cold storage centres and stores.

The first of its stores opened in the southern city of Hyderabad in November.

Its plans are by far the most aggressive among the domestic players, but Reliance faces tough competition from US retail giant Wal-Mart Stores, which recently tied up with a local company, Bharti Enterprises, to enter the Indian retail business.

Reliance insists its knowledge and understanding of the Indian market gives it an edge over Wal-Mart.

"It will be a combination of price and how well we will execute our model", which included services such as home delivery, shop-on-phone and engaging small traders in the management of the supply chain, Pillai said.

"Our stores will have a non-intimidating environment, with products available at affordable prices."