Reliance Retail Ltd will roll out its electronic goods chain, to be called Reliance Digital, in the national capital region later this month, the company’s second foray into the country’s nascent branded retail business.
The company plans to open 25-35 Reliance Digital stores in every major city by March 2008, according to a person familiar with the situation.
The electronics chain will be the second format to be launched from the Reliance Retail stable following its foray into India’s $300 billion (Rs12.6 lakh crore) annual market with a chain of grocery stores late last year.
So far, Reliance Retail has opened more than 100 Reliance Fresh stores in cities including New Delhi, Bangalore, Ahmedabad, Hyderabad and Jaipur, among others.
The stand-alone electronics outlets, selling everything from telephone handsets to television sets, will make their debut in Indirapuram, Ghaziabad.
A Reliance official close to the situation said the 20,000sq. ft store in Shipra Mall will be one of the smaller electronic stores as the company plans such stores to be generally ranging between 20,000sq. ft and 100,000sq. ft.
“We have modelled it on the line of Best Buy” electronics chain of the US, said a Reliance official asking not to be named. Best Buy is the leading consumer-electronics retailer in the US with more than 900 stores in North America.
The official said Reliance Digital will be fully-owned by Reliance Retail and the company has not tied up with any foreign company.
The market for India’s consumer electronics has gone up 30% to Rs41,500 crore in 2006 from Rs32,000 crore in 2004 whereas the share of electronics goods sold through organized channels swelled 72% to Rs4,300 crore during the same period, according to India Retail Report 2007.
India’s largest listed retailer, Pantaloon Retail (India) Ltd, already has a consumer electronics store in the same Shipra Mall, underscoring the competition that is on hand for Reliance Digital.
On top of it, the Indian government is considering allowing foreign investment in multi-brand electronic retailing that will permit companies such as US-based Best Buy Co. to Circuit City Stores Inc. to sell products in the country. Currently, India only allows 51% overseas ownership in single-brand retailing, enabling companies such as Sony and Samsung Electronics to open stores for their products.
Reliance Retail plans to invest up to $5.5 billion in the next five years to open thousands of speciality stores to hypermarket all across the country and the company targets $22 billion revenue from its retail business during the same period.