Reliance’s focus on the “Bottom of the Pyramid”:

Reliance seems to be treading the path not yet attempted by any industrial houses. After its successful foray in the retail segment in form of Reliance Fresh Supermarket chain, Reliance seems to be attempting to capture another larger pie of the business – the Bottom of the Pyramid.



It has recently launched two new Retail format stores, namely Reliance Wellness & Reliance Footprint. While Reliance Wellness caters to the emerging Beauty & Health care industry, Reliance Footprint attends to the branded footwear, handbag & accessories requirements for everyone.

Typically, these two endeavors fall in the high margin businesses, compared to Reliance Fresh Supermarket. This is evident since Reliance Wellness was launched in Hyderabad & Reliance Footprint was simultaneously launched in Bangalore & Hyderabad – cities where the average salary is higher than the regional & country average.

Apart from the high margins, the prominent motivation for foraying in these is the stiff opposition faced by Reliance Retail in certain states of India. The pretext for banning entry of Reliance Fresh super marts was the potential loss of business to the small traders, usually referred to as mom-and-pop stores, which normally beeline almost every nook & corner of the streets in the innumerable towns & cities of the country.

I believe Reliance Wellness & Reliance Footprint may not face any such opposition since these are just specialty stores which provide products catering to the well-to-do class of people. As of now, there seem to be no associations of owners of these cadres of stores.

The entry of these format stores is welcome since it induces competition in the market, thereby favoring the customer. Apart from favoring the customer, such format stores are a great boon to the brand manufacturers as well.

For Example, with Reliance Footprint stores, shoe makers like Bata will not have to spend efforts on showrooms anymore. Hence, shoe makers can now concentrate on their core business of shoe manufacturing. A pre-decided margin can serve as Win-Win to both, manufacturer & the seller.

A similar analogy applies to the beauty & health care industry too. Now on, brands like L’Oreal & Himalaya Healthcare need not pump capital to reach the end-customer; and consumers likewise would remain happy buying from Reliance Wellness due to easy the “pick & bill” format of the stores.

In its advanced avatar, Reliance can even plan to take up the outsourced distribution tasks of these manufacturers, thereby plunging itself in the Third Party Logistics arena. Such an initiative can eventually help its Reliance Fresh super marts too. In the long run, a domestic outsourcing of these non-value addition tasks can in fact, reduce the overall cost of manufacturing. Passing over of this cost to the end consumer in form of reduced sales price, however, may not be immediately possible.

Well, these are just few of the possibilities for a conglomerate like Reliance which continues to touch almost everyone’s lives in some way or another.