Mukesh Ambani’s Reliance Industries has raced ahead of the Tata Group in the consumer electronics and cellphone retailing business to become the country’s largest seller of durable and technology products by revenue as the rivals followed different strategies to consolidate their presence in the market.
Reliance Digital notched up sales of Rs 4,233 crore in 2014-15, as reported in the Reliance Industries annual report, while Tata-owned Infinite Retail’s white goods and cell phone retailing chain Croma reported sales of Rs 3,269 crore, according to a recent filing with the Registrar of Companies. A year ago, Croma was on top with sales of Rs 3,198 crore compared with Reliance Digital’s Rs 3,044 crore.
Reliance Retail overtook Croma after opening more stores, especially its smaller size neighbourhood format known as Digital Express Mini, according to three senior industry executives. The Ambani-controlled company added 912 stores in a single year, taking the total to 1,196 in FY15. This triggered the 39% jump in sales for Reliance Digital, which contributes one-fourth of Reliance Retail’s revenue. The value retailing business (hypermarket, supermarket, convenience stores) provides the largest chunk of revenue for Reliance Retail, accounting for 54 per cent of the total.
Croma is focusing on margins to turn the 97-store venture profitable and its growth rate reduced, reflecting the slower expansion of the white goods and television industry as consumers turned wary of high-ticket purchases, the executives said. Infinity Retail’s net loss widened to Rs 98 crore in the previous financial year from Rs 82 crore in 2013-14. Reliance Digital didn’t disclose its profit/loss number in the annual report.
Croma is in a consolidation mode rather than expansion, the chief of a leading consumer electronics firm said, asking not to be identified. “The retailer is trying to prune losses, has cut down on its private labels and focusing on increasing per square foot revenue,” the executive said.
Emails sent to the Reliance Retail spokesperson and Infinity Retail CEO Avijit Mitra remained unanswered till Wednesday press time.
Even by sheer number of stores, Reliance Digital had become the largest consumer electronics retailer in 2014-15, overtaking Videocon Group’s Next Retail-Planet M combine, which has about 800 stores, including franchisees. Reliance Digital races ahead of Tata’s Croma in electronics retail The Digital Express Mini format has established itself as the country’s largest mobile phone retail chain and is increasingly becoming a distribution platform for most national and international brands, Reliance Industries said in its 2014-15 annual report. It is present in over 150 cities in India and the plan is to take it to over 800 cities. Reliance Digital is continuing its expansion, with the total store count going up to 1,380 across 225 cities, according to an analyst presentation made after Reliance’s second quarter results.