Will Reliance Retail’s Climb In Organised Grocery Segment Hurt DMart?
After the acquisition of the retail and wholesale businesses of Future Group (that includes brands like Big Bazaar, fbb, Foodhall, Easyday and Nilgiris) Reliance Retail is stronger than ever before in the retail scene in India.
The subsidiary of Reliance Industries Limited (RIL) received an investment of Rs 7,500 crore from Silver Lake Partners this week and according to two different Bloomberg reports citing sources, the company is set to KKR and Amazon are in talks to invest $1 billion and $20 billion in the business, respectively.
The grocery business in India dominates the retail market in the country, with a 65 percent contribution and an estimated valuation of $560 billion.
However, organised grocery makes for only 5 percent of the retail market, with the strong grasp of traditional kirana stores in the segment.
The Future Enterprises deal brings a 33 percent increment in Reliance Retail’s grocery revenue and the combined entity is expected to have 2 times the revenue in comparison with Avenue Supermart’s DMart. While RR may be the leader, it does not increase the count of modern trade stores in India, which makes analysts believe that DMart is still a sizeable player, in the number two position and, its business will not be derailed by the recent progress in the former.