ELECTRONICS
Mobile phones, consumer electronics lift Reliance Retail

mobile-phones

KOLKATA: India’s largest retailer Reliance Retail’s cellphone and consumer electronicsretailing business crossed the $5-billion revenue mark in the year to March, underscoring the breadth of its market presence.

Sales in these two categories — which account for about a third of the total — through Reliance Digital and Reliance Jio stores more than doubled to Rs 39,170 crore in FY19 from Rs 15,154 crore in FY18, according to the company’s investor presentation made to analysts.

Reliance attributed the growth to having the largest network of stores and enjoying a first-mover advantage in many cities. New brand introductions in mobile phones and air care (air conditioners, air purifiers and air coolers), such as Lloyd and Godrej, helped the retailer outpace market growth rates across key categories.

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An industry executive said the revenue includes sales of the JioPhone, which made Reliance the largest brand in feature phones and the overall cellphone market in 2018 as per tracker Counterpoint Research.

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The contribution of smartphones and consumer electronics retailing increased to 30% of total sales in FY19 compared with 21.9% in the year earlier, as per the presentation. The connectivity business, which includes Reliance Jio Infocomm subscriptions and recharges, was the largest at 33.5% (Rs 43,739 crore) of total retail sales and grocery was third at 17.9% (Rs 23,371 crore), the company said.

Reliance Retail said it added 76 large format Reliance Digital stores and 2,219 smaller Jio Stores in FY19. As a result, the company now operates over 8,000 electronic and cellphone retailing stores out of the 10,415 it runs across formats. The company sold more than 570,000 television units, up 40% from FY18, it said.

An email sent to Reliance Retail remained unanswered.

Analysts said Reliance Retail now has the scale in consumer electronics and mobile phones to be the only brickand-mortar retailer that can take the fight to ecommerce companies Walmart-owned Flipkart and Amazon. These two categories are the largest segment in online sales, accounting for 70% of total business. Reliance itself is planning an entry into ecommerce that will leverage its brick-and-mortar presence stores and its digital capabilities through Reliance Jio.

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“For Reliance, Jio and Reliance Digital are seen as two jointly strategic businesses,” said Devangshu Dutta, CEO at consultancy firm Third Eyesight. “Reliance wants to be the leader in any space it operates in and is the only brick-and-mortar retailer in a position to give a fight to Amazon and Flipkart for market share.”

Godrej Appliances business head Kamal Nandi, who also leads white goods lobby group, Consumer Electronics and Appliances Manufacturers Association, said modern trade is about 9% of total industry sales and another 5-6% is ecommerce. “Both these channels, and the larger players, have dominant bargaining power in purchases,” he said. “Some polarisation of the market can further happen in favour of them.”

In the consumer electronics and smartphone retailing space, Reliance Retail is now almost 10 times bigger than its nearest brick-and-mortar rival, the Tata Group’s Croma. Infiniti Retail Ltd, which owns the Croma chain, had reported total income of Rs 3,813.74 crore in FY18 as per latest Registrar of Companies filings. Infiniti Retail is yet to file its financials for FY19.

According to the latest Counterpoint Research report, Reliance’s Jio Phone captured 38% of the feature phone market in India in calendar 2018 followed by Samsung with 12% share. Reliance was the overall market leader across feature phones and smartphones with 21% share in 2018.

The Hong Kong-based researcher said JioPhone sales rose due to its “compelling value proposition compared to normal 2G feature phones. Additionally, the Jio Monsoon Hungama offer focusing on upgrading 2G feature phone users, helped it to drive sales during the second half of 2018”.

[“source=economictimes.indiatimes”]

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