(By Nikhil Pahwa & Vikas SN)
Update: It looks like Reliance Retail has e-commerce plans after all. The company’s technical team is apparently working on the project and may open an online marketplace in six to eight months, reports The Economic Times, citing a person aware of the development. The publication however notes that the company has not responded to their queries.
Earlier (October 15): Reliance Retail, the retail business from Mukesh Ambani’s Reliance Group, has decided to discontinue offering books and music via its TimeOut stores. In the Reliance Industries’ earnings report for the quarter ending 30th September 2013 (pdf), the company has said that the industry is witnessing a rapid migration of books and music delivery to digial channels, following which “the business has decided to discontinue offering books and music through physical stores being operated under TimeOut banner.”
What is surprising, however, is that Reliance Retail isn’t retailing books and music online, particularly given the context of Reliance Industries launching its 4G business at some point in time in the next decade (we hope). Even if the 4G access business isn’t online, there’s no reason for the services business (video, music, books) to be contingent on the launch of the access business.
The decline of physical retail for books and music was just a matter of time, and there is some indication here in this ET Report on the TimeOut store in Kochi, which indicates a reduction in customer base since people are buying books and music online, and Reliance TimeOut halving its outlet (then) and Reliance’s electronics devices retail business – Reliance Digital taking the other half. By now, it is likely to have switched entirely to Reliance Digital.
Reliance Retail is well placed to launch some of Jio’s access rollout: The business now operates over 1,550 stores across 136 cities in India. Of these, 180 stores across 57 cities are Reliance Digital, and is competing with the likes of Tata owned Croma. Some pointers from Reliance Digital from the RIL annual report:
“The Digital Xpress concept, developed with an emphasis on technology solutions, has been exceptionally well received by customers as well as brand partners. The initial set of 17 stores has garnered appreciation for its experiential offerings, design and layout and knowledgeable store associates delivering a great customer experience.”
“resQ, the Digital support and service arm, launched comprehensive home care plans for appliances and electronics for its existing customer base of 1 million households. The resQ network, from its current 43 service centres in 36 cities, is being expanded to create a national footprint.”
Reliance Retail registered a turnover of Rs 6,930 crore for the first six months of the financial year, a growth of 41% over the corresponding period last year. Turnover in 2Q FY14 stood at Rs 3,456 crore, a 31% growth over the same quarter of last year. Retail business achieved PBDIT of Rs 165 crore for 1H FY14 and Rs 95 crore for 2Q FY14. The format sectors saw same store sales growth ranging up to 22% in the first half of the financial year.