The Sunday Telegraph

India's Wal-Mart

14 August 2006
 

Reliance is about to launch a retail revolution in India - from no stores to 1,500 outlets in just six months. The reverberations will be felt across the world, says James Hall

    In April a Mumbai branch of Sahakari Bhandar, a dowdy Indian state-owned department store, closed mysteriously for renovation. It reopened a month later equipped with air conditioning and staff in bright uniforms. Goods on sale included everything from CDs to frozen peas. The new-look store had no name but details soon started to emerge about what had happened. The store is just one in a chain, which includes at least 20 sites in Mumbai, being used as a dry run for a vast new retail concept by Reliance Industries Limited (RIL), the sprawling conglomerate and India's largest private company. Reliance Retail, a newly launched RIL sub-sidiary, used the stores as a secret testbed for product lines and a new system of supply chain management. The experiment worked: sales at Sahakari Bhandar trebled. The stores have given Indian shoppers the first glimpse of an operation of such scale and ambition that it is making global rivals such as Wal-Mart, Carrefour and Tesco shudder. Mukesh Ambani, RIL's chairman, plans to open 100m sq ft of retail space in India by 2010. Local press reports talk of between 5,000 and 10,000 stores spread across 1,500 towns and cities. Ambani has described the concept as "a pan-India footprint of multi-format retail outlets". Reliance will operate hypermarkets, convenience and speciality stores, as well as business-to-business operations, selling food, clothing, electrical goods, consumer durables, luxury goods and financial and travel services. The project will employ 1m people within five years.

*******