Thursday, February 16, 2006

Retail - battlelines are being drawn

There were two articles today, one in ET and one in The Hindu Businessline. The one in ET says (its not online, could be there tomorrow), more than Wal-Mart, it is Reliance and its big plans that worry the existing players. The one in Businessline tells how the big ticket Reliance is slowly drawing battlelines across the country. The timing of the articles couldnt be better.

...It (Reliance) has started over 100 company-owned fast food joints along various stretches of the 5,846-km Golden Quadrilateral and north-south/east-west corridor, where it has over 1,000 pumps up and running...

...Reliance is said to be pushing this model of value-added retailing in a bid to corner what it believes will be the next sector after railway and air travel to hit the growth trajectory - road travel...

...It is not that such eateries do not exist in the near vicinity of petrol pumps across the country, but there is no guarantee on the quality of food served at these dhabas. Reliance has put a foot forward in this space by owning up responsibility for this service...

As seen from its telecom experience, Reliance does understand the customer, the tricky Indian customer with all his quirks. Food at highways can be fairly tricky, so why not a petrol pump with quality food. Smart move.

...Given the penchant of the Indian to have a wash before sitting down before the `thali', the A1 Plazas are also offering a quick bath at Rs 5 and a more posh one at Rs 15...

Reliance has always been a big thinker. Ever since the refinery in Jamnagar, Reliance makes a splash and not a small dive. Reliance is known to use its size and muscle to get the best deals out of any company. I personally know of some who were at the receiving end of their ability to whack out amazing discounts out of companies.

I like the way the piece ends in Businessline, since it says...Clearly, retail business for Reliance, has already started.

As we are focussed on the malls and the shopping outlets in the cities, Reliance seems to be busy conquering territory where there is nobody (or no concerted effort) lying in wait for the boom. And then it will enter the cities, slowly but surely. The other players are getting ready in scale and service for the inevitable entry of the big daddy (which is what the piece in ET talks about), but this is one area where there is no single big player across the country. Reliance might just fill this void. FDI or no FDI, there is bound to be action in this space.

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