‘Fresh’ attack of the clones...

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The answer to Reliance’s problem lie beyond the shutdowns!

What was common between the mungo dinosaurs which tread heavily on the earth a million years back and the super-colossal titanic which met its fate in the early twentieth century? Gigantic for sure they both were; but more common is the fact that both met their ends much sooner than expected by most! Sure enough, that was history! And we did believe the same, till the latest occurred in the high-potential organised Indian retail scenario where lady luck seems to have jettisoned the most-discussed amongst organised retailers – the cash-rich Mukesh Ambani’s venture – Reliance Fresh.

On one hand, there are political leaders like Mayawati and several others who are pledging to put a stymie to Reliance Fresh, while on the other the consumers who appeared all so enthusiastic about the whole organised retailing revolution are giving more of a step-motherly treatment to it. So while Mayawati’s government and Kolkata’s Trade Union seem to have sworn by the gods to openly attack any Reliance Fresh initiative on their terrain, what can the mighty Reliance do other than stare helplessly at the lugubrious turn of events?

When asked, Raghu Pillai, President & CE, Operations & Strategy, Reliance Retail Ltd, snappingly retorted, “We are not doing anything illegal and neither are we manipulating any social norms. So nobody can stop us!” Brave words indeed, like a true commander in the ranks of Reliance Retail who only believes in his war-strategy; but what about the fact that during just the past two months, eight Reliance Fresh stores have been shut down mercilessly?


Then comes the unorganised blitzkreig as even in areas where Reliance Fresh is operational, it’s facing tough competition from the unorganised players. For instance, in New Delhi and NCR region, wherever Reliance Fresh has opened-up its store, the footfalls have been very low – call it ‘barren’, at best. A Mumbai-based retail analyst explains the situation as, “The reason is that, when it comes to buying vegetables and fruits, maximum Indian consumers are not habituated with the buying behaviour inculcated by Reliance. Moreover, many of these Relaince Fresh stores are not located in prime areas within the cities.”

Sure enough, other smaller players like Big Apple and Subhiksha have understood from the very beginning that ‘location’ within the city is a big factor to ensure success... a fact which Reliance of late seems to have realised as it opened a Reliance Mart in a well-known mall at Ahmedabad. Apart from this, the fact that Mukesh is mixing up his ‘Vimal’ brand with other brands in the apparel segment is in itself a strategic positioning blunder... Sure enough, Reliance must look beyond the recent shut-downs & concentrate on better geographical & product-mix strategies.

4Ps edit bureau: Angshuman Paul

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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