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September 1, 2026
Vikash Tripathi, Outlook Business
1 September 2026
Eight decades ago, the ‘nationalist businessman’ GD Birla helped prepare the ‘Bombay Plan’, which asked the state to pro-vide for the bare minimum needs of its people. His plan asked for 2,800 calories of well-balanced food per day, 30 yards of clothing per year and 100sq ft of housing per person.
Today, seventh-generation Aryaman Vikram Birla is betting on an entirely different opportunity: premium dining. “We continue to believe in the remarkable potential of the premium casual dining space, spurred by rising disposable income and evolving lifestyles,” the 29-year-old said after Aditya Birla New Age Hospitality acquired KA Hospitality in 2023.
The Birlas are not alone in trying to cash-in on rising prosperity in India. In the past five years alone, India’s top 10 industrial groups have announced new ventures in consumer-facing sectors or doubled down on existing ones. A rough tally of these investments crosses ₹4.8 lakh crore.
For decades, these same business houses built their dominance in core sectors like steel, power, aluminium, cement and chemicals, laying the industrial backbone of the economy. This helped the nation become a large producer of such goods and, in some cases, an exporter as well.
But as India’s economic conditions changed, so has the focus of its largest conglomerates.
For the likes of Tata, Aditya Birla, Bajaj and Bharti, that journey started way back. “What has changed in recent years is the speed and openness of the amount of capital being invested,” says Jitender Kumar, associate professor and programme chairperson, retail management programme at Birla Institute of Management Technology.
“It is not ‘opportunistic’ reasons, it’s structural reasons.”
Two factors seem to be driving the shift: the first is the arrival of an affluent consuming class that can buy branded and premium goods, and the second is the attraction of consumer businesses as a way to diversify revenue and, in some cases, improve the quality of earnings.
The Rise of Affluence
A couple of decades ago, if an Indian household had some extra cash, it often meant buying more of the same. Today, it increasingly means buying better. Even salt is being upgraded, from iodised to Himalayan pink or rock salt. The same shift is visible in bigger purchases: sports utility vehicles (SUVs) over hatchbacks, and ₹1cr-plus homes over budget flats.
But India isn’t simply consuming more. It is moving from basic consumption towards discretionary, branded and premium consumption. This boom is most clearly seen in the rapid expansion of the financial infrastructure that enables consumption. Formal retail credit penetration has more than doubled over the past decade, according to a TransUnion Cibil report, driven largely by personal loans, credit cards and consumer durable loans. Meanwhile, the government-backed Unified Payments Interface has untethered spending from the cash in a buyer’s wallet.
The signs show up across the broader consumption economy. Homes priced above ₹1cr accounted for 54% of total sales in 2025, up from just 30% in 2023—the market that decorative paints and home solutions are chasing.
Out of 4.7mn cars sold in the financial year 2025–26, SUVs accounted for more than half.
“The consumer market has grown substantially—not only through rising incomes but also the dramatic expansion of branded consumption across product verticals,” says Devangshu Dutta, founder of management-consulting firm Third Eyesight.
The bets are also getting more varied, from Reliance Retail tying up with global brands like Fenty and Skims to the Bharti Group bringing Olive Garden to India.
The Lure of Returns
For a passenger walking through an airport, the flight is only one part of the journey. There is coffee before boarding, food between flights, a lounge, retail outlets, parking and a host of other things to spend money on. For Adani Airports, those non-aero businesses are increasingly becoming the more lucrative part.
Its non-aero operations already generate about ₹2,500cr, with returns in the high-20% range, against roughly 12% from regulated aeronautical operations.
Jeet Adani, director of Adani Airport Holdings, expects the share of aeronautical revenue to fall to around 10% of total revenue, with non-aero becoming the bigger growth driver. The motivation can be seen as an escape from a return ceiling as much as a bet on rising affluence.
As Kumar puts it, consumer businesses help the conglomerates in two major ways. First, they help insulate them from volatile and often punishing commodity cycles, and second, they often offer far better returns with lower capital intensity and faster cash conversion.
Reliance Industries (RIL) shows how significant that shift can become. By 2025–26, its consumer-facing arms, Jio Platforms, Reliance Retail Ventures and Reliance Consumer Products, together contributed over 40% of group revenue and nearly 60% of operating profit.
And there is another advantage. “A small business, when it wants to build a new venture, faces constant margin pressure and often has to build its supply chain from scratch. A large conglomerate can leverage its existing scale, infrastructure and supply chain to enter a new business far more efficiently,” explains Kranthi Bathini, equity strategist at WealthMills Securities.
Different Strokes
In chasing consumers, some conglomerates are following the fastest-growing categories, while others are using their existing industrial capabilities to enter consumer-facing businesses. One is trying to build an entire ecosystem around it. But the lines between these approaches are not always clean.
Tatas is doing both: building entirely new consumer brands while also using the industrial ecosystem it has built over decades.
For Tatas, the consumer opportunity has largely been about following where spending is moving. Their consumer ventures have followed this arc longest. It began decades ago with Lakmé (1952), Tata Tea (1962) and Titan (1984). Tanishq and the expansion of Trent under brands such as Zudio are only the latest examples.
At Tata Consumer Products, once largely a staples business built around salt, tea and pulses, the focus has been shifting towards value-added foods and beverages, with ₹7,000cr spent on the acquisitions of Capital Foods and Organic India in 2024. Across companies such as Tata Digital, Indian Hotels, Air India and Tata Motors Passenger Vehicles, the group has announced close to ₹93,180cr in investment over the past five years.
Aditya Birla’s jewellery chain Indriya and its move into premium hospitality belong to the same category of ‘pull-based’ diversification.
JSW is taking a different route. It is taking its existing industrial strengths one step closer to the buyer. The group, which has traditionally been focused on areas such as steel, energy and cement, has expanded into consumer-facing areas such as auto, paints and home solutions.
It launched JSW Paints in 2019, and acquired a controlling stake in paintmaker AkzoNobel India for ₹8,986cr last year. Its strategy is to leverage an established network of contractors, dealers, architects and builders to reach consumers.
The same strategy can be seen in its push into autos, acquiring a 35% stake in the Indian unit of China’s MG Motor in 2024, leveraging synergies with its established steel business.
At Tatas, too, group companies like Tata Steel, Tata Power, Tata AutoComp, Tata Technologies and TCS are doing significant businesses with Tata Motors.
Adani is also using an asset it already controls to move further into the consumer’s wallet. Adani Airports announced a ₹20,000cr investment in June to develop hotels, retail, entertainment and commercial infrastructure around its eight airports, and has signed hotel management agreements with IHG Hotels & Resorts for five hotels. City-side developments could contribute 30–40% of Adani Airport Holdings’ non-aero revenue.
Yet another example of the extension strategy is Aditya Birla Group’s attempt to diversify from cement, metals and textiles into decorative paints with Birla Opus.
RIL took a different approach: trying to connect multiple consumer businesses into one ecosystem. It expanded its retail network through new formats and acquisitions, added brands and partnerships, and then built a consumer-goods business around acquisitions such as Campa Cola and Lotus Chocolate.
That expansion was helped by billions of dollars raised by both Jio Infocomm and Retail Ventures from foreign investors in 2020. The group now plans to spend another ₹8,000cr expanding consumer goods manufacturing. The advantage of having that kind of scale is clear. If RIL has Ajio at a mall and, next to it, GAP and Herschel, it can negotiate better rental terms.
For conglomerates, Kumar points out, the next level of competition will not be based on investment, “but on the ability to create different consumer experiences, foster innovation and create lasting brand loyalty through the integration of these capabilities”.
Can Scale Win?
When Reliance Fresh opened its first stores in 2006, it was part of a rush by some of India’s biggest business groups to crack organised retail. Aditya Birla Group, RP-Sanjiv Goenka Group’s Spencer’s and Kishore Biyani’s Future Group were all betting that organised retail could transform the way Indians shopped. What followed was years of experimentation, losses and, for some, eventual retreat.
Birlas essentially gave up on grocery retail after a decade of heavy losses and exited entirely.
Future was pushed into insolvency after a controversial ₹24,713cr deal with RIL. Spencer’s is still trying to find its footing, with ₹249.33cr in net losses in 2025–26.
Conglomerates may have deeper pockets, but that does not automatically make them better at selling to consumers. India has seen some of those bets fail or take years to work. And even among today’s biggest players, the results are still mixed.
Tata Sons has been in this segment longer than the Ambanis, yet its consumer businesses still make up less than 40% of its total revenue —a share that has not changed since 2020.
These groups have what most standalone consumer companies don’t: capital, distribution, infrastructure, brands, scale.
But winning consumers takes something else entirely—reading what people want, building brands, innovating fast and earning loyalty.
“In B2B [business to business], it’s about manufacturing at scale, getting your costs down. Then you can compete. In B2C [business to consumer], it’s all about the product. With the right product at the right price, you have a chance to win in the market,” Parth Jindal, managing director of JSW Cement and JSW Paints, told Outlook Business in 2025.
Tata Sons’ chairman N Chandrasekaran hit the same wall while revamping the group’s consumer unit. “I have the money. But I don’t have the team to run it,” he had told Sunil D’Souza while hiring him to lead Tata Consumer Products in 2020.
Reliance and Tatas have had the longest head start, but even their journeys show how difficult it is to turn scale and capital into consumer businesses. Birla, JSW and Adani are now trying to make that transition in their own ways.
A longer tail—Bajaj in hospitals, L&T in retail finance and education, Mahindra in insurance and hospitality, Murugappa in electric mobility—is playing it safer, going deeper into what it already owns rather than chasing new categories.
What ties them together is a bet on consumers buying not just more but better, and on those consumers being worth more per rupee of capital than the industrial customers who built these houses.
The prize is growing, but so is the competition. Capital and scale may get these conglomerates through the door. They won’t guarantee a seat at the table.
(Published in Outlook Business)
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February 27, 2026
Samar Srivastava, Forbes India
Feb 27, 2026
India’s young consumers are discovering the next big beauty serum, protein bar or sneaker brand not in a mall, but on Instagram reels, YouTube shorts and quick-commerce apps that promise 10-minute delivery. What began as a trickle of digital-first labels a decade ago has now become a full-blown wave. Direct-to-consumer (D2C) brands—built online, fuelled by social media and venture capital—have reshaped India’s consumer landscape and forced legacy companies to rethink everything from marketing to distribution.
India today has more than 800 active D2C brands across beauty, personal care, fashion, food, home and electronics, according to industry estimates and consulting reports. The Indian D2C market is estimated at $12–15 billion in 2025, up from under $5 billion in 2020, and growing at 25–30 percent annually. The pandemic accelerated online adoption, but the structural drivers—cheap data, digital payments and over 750 million internet users—were already in place.
Unlike traditional FMCG brands that relied on distributors and kirana stores, D2C brands such as Mamaearth, boAt, Licious and Sugar Cosmetics built their early traction online. Customer acquisition happened through performance marketing; feedback loops were immediate; product iterations were rapid.
Importantly, these brands are discovered online—but as they scale, consumers buy them both online and offline, increasingly through quick-commerce platforms such as Blinkit, Zepto and Swiggy Instamart, as well as modern trade and general trade stores. The omnichannel play is now central to their growth strategy.
According to Anil Kumar, founder and chief executive of Redseer Strategy Consultants, the ecosystem is maturing in measurable ways. Brands are taking lesser time to reach ₹100 crore or ₹500 crore revenue benchmarks and, once there, mortality rates are coming down. There is also an acceptance that if a brand is not profitable in a 3–5 year timeframe, that needs to be corrected. “There is a lot of emphasis on growing profitably and not just through GMV,” he says.
Big Cheques, Bigger Exits
The D2C boom would not have been possible without capital. Between 2014 and 2022, Indian D2C startups raised over $5 billion in venture and growth funding. Peak years like 2021 alone saw more than $1.2 billion invested in the segment. Beauty, personal care and fashion accounted for nearly 50 percent of total inflows, followed by food and beverages.
Some brands scaled independently; others found strategic buyers. Among the most prominent exits:
> Hindustan Unilever acquired a majority stake in Minimalist, reportedly valuing the actives-led skincare brand at over ₹3,000 crore. For Hindustan Unilever, the annual run rate from sales of its D2C portfolio is estimated at around ₹1,000 crore, underscoring how material digital-first brands have become to its growth strategy.
> ITC Limited bought Yoga Bar for about ₹175 crore in 2023 to strengthen its health foods portfolio.
> Emami acquired a majority stake in The Man Company, expanding its digital-first play.
> Tata Consumer Products acquired Soulfull as part of its health and wellness strategy.
> Marico invested in brands such as Beardo and True Elements.
Private equity has also entered aggressively at the growth stage. ChrysCapital invested in The Man Company; L Catterton backed Sugar Cosmetics; General Atlantic invested in boAt; and Sequoia Capital India (now Peak XV Partners) was an early backer of multiple consumer brands.
Valuations were often steep. boAt was valued at over $1.2 billion at its peak. Mamaearth’s parent, Honasa Consumer, listed in 2023 at a valuation of around ₹10,000 crore. Across categories, brands crossing ₹500 crore in annual revenue began attracting buyout interest, with deal sizes ranging from ₹150 crore to over ₹3,000 crore depending on scale and profitability.
Yet exits have not always been smooth. “While it takes 7-8 years to build a brand most funds that invest in them have a timeline of 3-5 years before they need an exit,” says Devangshu Dutta, founder of Third Eyesight, a retail consultancy. This timing mismatch can create pressure—pushing brands to scale aggressively, sometimes at the cost of margins.
Integration Pains and the Profitability Pivot
For large FMCG companies, buying D2C brands offers speed: Access to younger consumers, premium positioning and digital marketing expertise. But integration brings challenges.
Founder-led organisations operate with rapid decision cycles, test-and-learn marketing and flat hierarchies. Large corporations often work with layered approvals, structured brand calendars and rigid cost controls. Cultural friction can lead to talent exits if autonomy is curtailed too quickly.
Margins are another sticking point. In the early growth phase, many D2C brands spent 30–40 percent of revenue on digital advertising. Rising customer acquisition costs post-2021, combined with higher logistics expenses, squeezed contribution margins. As brands entered offline retail, distributor and retailer margins of 20–35 percent further compressed profitability.
Large acquirers, used to EBITDA margins of 18–25 percent in mature FMCG portfolios, often discovered that digital-first brands operated at low single-digit margins—or were loss-making at scale. Rationalising ad spends, optimising supply chains and pruning SKUs became essential.
The funding slowdown between 2022 and 2024 triggered a reset. Marketing spends were cut by as much as 25–40 percent across several startups. Growth moderated from 80–100 percent annually during peak years to 25–40 percent for more mature brands—but unit economics improved.
Quick-commerce has emerged as a structural growth lever. For categories such as personal care, snacking and health foods, these platforms now account for 10–25 percent of urban revenues for scaled brands, improving inventory turns and reducing dependence on paid digital acquisition.
The next phase of India’s D2C journey will be less about blitz scaling and more about disciplined brand building—balancing growth, profitability and exit timelines. What began as a disruption is now part of the mainstream consumer playbook. And as capital becomes more selective, only brands that combine strong gross margins, repeat purchase rates above 35–40 percent and sustainable EBITDA pathways will endure.
(Published in Forbes India)
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February 18, 2026
Kartikay Kashyap, BrandWagon, Financial Express
18 February 2026
IKEA HAS BEEN around in India for about eight years, with another three years before that spent studying the market. It has developed a range that it deems “locally relevant-like the roti maker, the tava (pan), the belan (rolling pin), and the pressure cooker -which now constitute about 50% of the products it offers in the country. It has shifted its communication strategy to sync with local culture and fit into local spaces and has worked hard to beef up its omnichannel sales model with about 30% of its sales originating online. But profitability has remained elusive for the retailer whose global sales reached approximately €45billion in the 2015 financial year (FY25).
Just for context, the company’s India entity widened its losses by about 29 to 1,325.2 crore in the financial year ending March 31, 2025 (FY25). The revenue also dipped 3 to 1,749.5 crore from 1,809.8 crore in FY25.
So now the brand is taking a leaf out of its China playbook and tweaking its retail formats. Starting last year, it started piloting smaller store sizes ranging from 15,000-20,000 sq ft that are more cost-effective to set up and faster to integrate with its omnichannel model. “The goal is to create a simpler and more efficient shopping experience,” Ingka Group Retail Manager Tolga Oncu had said when the concept was unveiled last August.
Five months on, the furniture retailer is looking to take a step up the ladder – setting up new stores in the 50,000-70,000 sq ft range in the country, which will sit comfortably between its smaller stones (15,000-20,000 sq ft) and big box retail outlets (4 lakh sq ft), Adosh Sharma, country commercial manager at Ikea India told FE recently. Ikea’s broader plan also includes doubling its investments in the country to over 20,000 crore ($2.2 billion) over the next five years and improving local sourcing.
Will all this help the retailer grab a larger share of the highly fragmented furniture and furnishing market in the country? Will the brand achieve profitability in the next two years in keeping with its plans?
Ikea realises copy-pasting its global retail strategy in India is not going to work. That explains its recent moves to tweak store sizes and product design. Over and above the regular 5-M-L strategy, the fourth format the brand is developing comprises no-frills planning and order points, focused on customers who want to design homes or seek complex solutions without distraction.
“Smaller stores, which fulfill purpose-led needs will help them to get closer to their customers,” says Devangshu Dutta, founder & CEO, Third Eyesight.
The furniture and home decor segment has been up against slow purchase cycles in India. Smaller sized stores that are closer to residential arras might help step up the frequency of purchases. “Players are moving towards a higher purchase frequency strategy and smaller stores will help lkea cash in on this opportunity,” says Kushal Bhatnagar, associate partner, Redseer Consultant Strategy. He says quick commerce has helped improve the purchase cycle in the home decor space, and that is something Ikea will likely tap going forwand.
Dutta says Ikea has taken a long-term view on India and the investments in the pipeline is an indication of the opportunity that awaits players.
The brand claims it has served close to 110 million customers in FY25 across channels, and online sales are growing 34% compared to the previous fiscal. While furniture contributed the lion’s share of its revenue, the food business contributed 100% and Ikea for Business (tailored solutions for businesses) another 19% to its topline.
(Published in Financial Express)
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January 30, 2026
Vashnavi Kasthuril, MINT
Mumbai, 30 January 2026
Reliance Consumer Products Ltd (RCPL) plans to enter the bottled iced tea market this coming summer with the relaunch of “Brew House”, three people close to the development told Mint. The people added that the brand—for which the company received approval on 23 July 2025, according to the commerce ministry records—is expected to be relaunched within the next two months. The oil-to-retail conglomerate acquired the brand in 2024 for an undisclosed amount.
The iced teas will be launched in two flavours, lemon and peach, for an entry price of ₹20 for a 200ml bottle, according to two of the three people. “The product was initially supposed to be launched for ₹10 for a 200ml bottle, but after the goods and services (GST) recast, the ready-to-drink segment falls under the ~40% GST bracket, so the company decided to start with ₹20 instead,” said one of the three people, all of whom spoke on the condition of anonymity. RCPL did not immediately respond to Mint’s emailed queries. However, multiple distributors also confirmed to Mint that “Brew House” will launch within the next two months.
FMCG ambitions
Apart from relaunching Brew House, RCPL is also evaluating launching other niche-category drinks. RCPL is also working on several new concepts, such as kombucha, prebiotic sodas, and ayurvedic drinks. RCPL now has the focus and capability to build a specialized route to market for these kinds of offerings. RCPL’s larger ambition is to be a full-scale fast-moving consumer goods (FMCG) company, spanning categories across home care, food, beverages, and snacks, said the second person.
In August 2025, RCPL, the packaged consumer goods arm of Reliance Industries Ltd, acquired a majority stake in a joint venture with Naturedge Beverages Pvt. Ltd, the Mumbai-based company behind the herbal functional drink Shunya. Shunya offers zero-sugar, zero-calorie herbal beverages infused with Indian super-herbs such as ashwagandha, brahmi, khus, kokum, and green tea across India.
“When Reliance acquires a brand, one can be sure of product innovations, and you will see the same here,” said the third person. To be sure, the company has expanded its beverage portfolio to include a diverse range of beverages across mass and value segments, ranging from carbonated soft drinks under the Campa brand to packaged drinking water, sodas, mixers, energy and sports drinks, and traditional Indian refreshments such as nimbu pani, fruit beverages, and milkshakes. RCPL is also present in packaged foods through brands such as SIL, which sells noodles and other staples.
Brew House was launched in May 2017 by Siddhartha Jain under Positive Food Ventures Pvt. Ltd in Gurugram as a premium ready-to-drink iced tea brand positioned as a healthier alternative to carbonated and sugar-heavy beverages. It differentiated itself through real, whole-leaf brewing, lower sugar content and the absence of preservatives. Targeting urban, health-conscious consumers, the brand initially built distribution through cafés, hotels, restaurants, multiplexes and airports before expanding into modern trade and online channels. Its portfolio included flavours such as lemon and peach, sold in 300-350ml glass or premium PET bottles priced at ₹40-80. Singapore-based Food Empire Group later acquired a majority-stake to scale operations, before RCPL acquired the brand in 2024 for an undisclosed amount.
“The relaunch has been a bit slow. It’s available in small batches at Reliance Retail stores for now, but the company’s waiting for the right product, price point, and strategy before scaling it up. Over 2025, the focus has been on building distribution through larger beverage categories and investing in back-end capabilities, including automatic brewing equipment,” said the third person. RCPL has focused on building distribution through larger categories first. It’s difficult for a small, standalone brand to create reach, but a broad portfolio allows scale. Once that foundation is in place, the company can create a separate vertical for niche beverages like iced tea, the person added.
The niche drinks market
The ready-to-drink (RTD) iced tea category in India has long been shaped by major multinational brands and legacy beverage players, though it has remained a relatively niche segment compared with carbonated drinks. Hindustan Unilever Limited and PepsiCo first introduced Lipton Ice Tea in the country in the early 2000s through a joint venture, but the product was pulled back after an initial launch as consumers at the time were not widely ready for iced tea. It was later reintroduced in select markets with PET bottle formats in flavours such as lemon and green tea variants in 2011.
Coca-Cola and Nestle’s joint venture, Nestea, also experimented with bottled lemon RTD iced tea in the early 2010s, initially available in 400ml packs at around ₹25, before its broader rollout was scaled back while the JV evaluated consumer feedback. Aside from multinational brands, Indian companies such as Wagh Bakri have sold iced tea products, including peach-flavour premix packs, retailing around ₹95-100 for 250gm sizes online, though these are often powder mixes rather than RTD bottles.
Currently, Lipton’s bottled RTD iced tea is available in 350ml packs online at roughly ₹60, while powdered iced tea mixes such as Nestle’s 400gm pouches are priced at ₹200-230. In contrast, RCPL’s relaunch of Brew House will be brought to market in 200ml PET bottles at ₹20, undercutting these legacy players and signalling an aggressive pricing strategy.
To be sure, RCPL used a similar strategic playbook when it relaunched Campa Cola, one of India’s once-iconic soft drink brands. Campa, first introduced in the 1970s and marketed with the slogan “The Great Indian Taste”, was a household name in the pre-liberalization era but faded in the 1990s after global giants Coca-Cola and PepsiCo entered the market. Reliance acquired the brand from Pure Drinks Group in 2022 for around ₹22 crore and formally relaunched it in 2023 with variants such as Campa Cola, Campa Lemon, and Campa Orange, initially through its own retail channels and then nationwide.
Reliance’s move into iced tea aligns with its broader FMCG and retail strategy of identifying categories with long-term growth potential, according to Devangshu Dutta, founder of Third Eyesight and co-founder of PVC Partners. While iced tea remains a niche within India’s overall beverage market, Dutta said it is seeing steady, organic growth, driven by the rise of cafe culture, increased eating out, and younger consumers’ demand for non-alcoholic alternatives. “Whether it’s consumed as a standalone iced tea or used as part of a cocktail or some kind of concoction, it’s a category that’s seeing increasing interest,” he said.
Reliance’s key advantage, Dutta added, lies in its distribution muscle and captive shelf space across its retail network, which allows it to scale new products more effectively than smaller, standalone brands. “Anything they put on those shelves and price well becomes an opportunity for growth,” he said, adding that the entry of a large player like Reliance is likely to expand the overall market rather than intensify competition.
(Published in Mint)
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January 7, 2026
Writankar Mukherjee & Shabori Das, Economic Times / Brand Equity
7 January 2026
There’s a renewed sparkle in the adage ‘Old is Gold’ at India’s biggest conglomerate Reliance. Banking on Indians’ nostalgia, it is hawking and reviving labels that once defined everyday life, Campa and BPL among them, to set its consumer venture’s cash registers ringing.
What started with sales of Rs. 3,000 crore in FY24, Reliance Industries’ fast-moving consumer goods (FMCG) business quickly accelerated towards Rs. 11,500 crore the following year. With a staggering Rs. 5,400 crore posted in the July to September FY26 quarter alone, the revival story is clearly striking a chord with consumers. But Campa, already the largest contributor to the Reliance Industries’ FMCG business, is only the beginning.
The company is injecting fresh life into acquisition of legacy brands such as Ravalgaon in confectionery and Velvette in personal care. Reliance is applying the same formula to the consumer electronics business, covering televisions, refrigerators and washing machines. Once a staple of Indian households, Kelvinator and BPL are being reintroduced.
Strategy Rings a Bell?
Driving this revival is a strategy Reliance knows well: aggressive pricing that is often 20 to 30% lower than competitors, offering generous trade margins to woo retailers, and a rapid expansion of distribution from its own stores to kiranas and local outlets, alongside local sourcing and an expanding product portfolio.
It’s a playbook that once created waves in the telecom market; this time, however, it comes with a generous dose of nostalgia.
The path ahead though may not be easy. While Campa may have yielded results in a category linked to instant gratification, electronics is a high-ticket, long-term purchase. Marketers are debating whether consumers in their 20s and 30s—spoilt for choice by global brands—would choose a Kelvinator refrigerator, a BPL TV or a Velvette shower gel over LG, Samsung, Dove or Fiama.
Deep Pockets and Retail Muscle
Reliance, experts say, has two advantages— its balance sheet and strong market presence with its own retail stores. “Reliance has the intent to dominate a market in whatever business it enters. Their brands in FMCG and electronics too have a more-than-decent chance of surviving and thriving,” says Devangshu Dutta, founder and chief executive of Third Eyesight, a consultancy in consumer space.
“As long as they have capital and management capability, they may cut their teeth,” he says.
The company is approaching the FMCG and electronics businesses in startup mode, but with deep pockets. As a Reliance executive explains, the strategy is to invest and invest more, gain market share, continue to absorb losses and after achieving scale, drive efficiencies to generate profit.
The path has been carved out. Reliance Consumer Products (RCPL), the FMCG business entity and what started as a unit of Reliance Retail Ventures, is now a direct subsidiary of Reliance Industries. This shift will help the company raise funds independently and eventually launch an initial public offering (IPO), and drive valuation independent of retail. The electronic business may follow suit as it grows in scale.
Reliance did not respond to Brand Equity’s queries.
Electronics: A Tough Play
Industry executives say the electronics foray will not be an easy battle against international brands. Global brands enjoy strong appeal in the Indian market, and companies such as LG, Samsung and Sony have been present for over two decades, cementing their position. Even the newer ones like Haier and Voltas Beko are rapidly gaining market share.
Pulkit Baid, director of the electronics retail chain Great Eastern Retail, says that unlike the cola industry, where two large players (Coca-Cola and PepsiCo) dominate, consumer durables are highly fragmented. “Kelvinator enjoys the brand heritage of an Ambassador car. But we will have to see if the brand is welcomed by Gen Z with the same euphoria as Campa.”
Industry veteran Deba Ghoshal notes that very few legacy brands have been able to withstand the onslaught of new-age brands in consumer electronics. Voltas (from the Tatas) and Godrej are exceptions, he adds.
“Reliance Retail has the strategic foresight to re-establish legacy brands in consumer durables space, instead of chasing a standalone private label business,” adds Ghoshal. “There is a strong opportunity in BPL and Kelvinator, provided they are re-launched with strong value and engaging emotive hooks, and not restricted to being a price warrior. Reliance has the capability; it just needs the right strategy.”
Reliance is readying campaigns for BPL and Kelvinator to connect with the younger consumers. The company is planning to re-launch them beyond Reliance Retail stores—targeting regional retail chains and e-commerce platforms and expanding quickly into smaller towns. With India’s electronics penetration still low—15 to 18% for flat-panel TVs, 40% for refrigerators, 20% for washing machines and less than 10% for air conditioners (ACs)—Reliance has substantial headroom for growth.
Angshuman Bhattacharya, partner and national leader for consumer products and retail at EY India, says Reliance may focus on tier two and three cities. “These markets have been a low priority for the Samsungs and LGs because they want to play in the premium segment where margins are higher. That is where Reliance may expand the market. It requires a lot of capital in terms of inventories and distribution, and Reliance has the ability and potential to do so.”
FMCG: Ball is Rolling
The FMCG push is gaining strong momentum. Reliance plans to double its distribution to three million outlets this fiscal.
Over the next three years, it looks to invest Rs. 40,000 crore to create Asia’s largest integrated food parks and has already invested Rs. 3,000 crore in manufacturing.
Isha Ambani, who spearheads Reliance’s retail and FMCG businesses, drew attention to Campa’s comeback at the company’s AGM in August: “Campa-Cola now holds double-digit market share across many states, breaking a 30-year MNC duopoly of Coca-Cola and PepsiCo. Campa Energy gained two million social media followers in just 90 days.”
Her target is bold: To reach Rs. 1 lakh crore in FMCG revenue within five years and become India’s largest FMCG company with a global presence.
Market watchers say such high ambitions require high investments. Kannan Sitaram, co-founder and partner at venture capital firm Fireside Ventures, said a company like Hindustan Unilever would set aside at least `30-40 crore to launch a brand. “Advertising and marketing alone would take up more than half of that. And when you are re-launching a brand which has not been around for a long while, the spending tends to be 25 to 30% higher in the initial three to four months,” he says.
Yet, analysts believe Reliance is in the consumer brands business for the long term. Bhattacharya says whatever Reliance has learned in this short time is meaningful and serious, something nobody else has managed.
Mover and Shaker
Competitors, including Tata Consumer Products, Dabur and PepsiCo’s largest bottler in India Varun Beverages, have acknowledged the turbulence created by Reliance in the FMCG sector. But the industry hopes low penetration levels will ensure there is room for everyone.
Varun Beverages chairman Ravi Jaipuria did not mince his words in the company’s latest earnings call in October-end: “They (Reliance) have woken all of us up and we are becoming more attentive… it is a very healthy sign for the country because our per capita consumption is so low that in the next five to 10 years, this market may double or triple…there is a huge room, and we see only positives in this.”
The revival of legacy brands and aggressive push into FMCG and consumer electronics indicates that Reliance is preparing for the long haul. In this fight driven by nostalgia, competitive pricing, deep pockets and distribution muscle, the battle for shelf space has just begun.
(Published in Economic Times/Brand Equity)
