Reliance Retail, the country’s largest organised retailer, will license its private brands in fast-moving consumer goods (FMCG) to Reliance Consumer Products (RCPL), sources in the know told FE. This is part of its move to hive off its FMCG business into a direct subsidiary of Reliance Industries (RIL), they said.
Reliance Retail owns names such as Snactac (snacks), Puric (hygiene), Enzo (laundry), Glimmer (beauty) and Get Real (personal care) among other private labels in apparel, footwear and electronics, which were launched over the years as part of its private label push into retail.
FMCG focus with RCPL
While private brands as a whole across categories contribute over 65% to Reliance Retail’s revenue, FMCG private labels, sources said, contribute around 5% or Rs 10,000 crore to Reliance Retail’s topline. Reliance Retail is likely to charge a small licensing fee for the transfer of its FMCG private labels to Reliance Consumer once it is hived off into a direct subsidiary of RIL, they added.
At RIL’s annual general meeting (AGM) on Friday, Reliance Retail director Isha Ambani had said the move to separate FMCG from retail was aimed at ensuring dedicated and sharp focus on products, markets and customers. It would also ensure faster execution, innovation and deep operational focus, as the FMCG business aspired to touch Rs 1 lakh crore in five years. RCPL closed FY25 with annual sales of Rs 11,500 crore.
Incorporated in November 2022, RCPL has a host of acquired and own brands under its stable, including Campa (acquired) and Independence (in-house), both of which have crossed Rs 1,000 crore in turnover.
Some of the other acquired brands under RCPL include Ravalgaon, SIL, Sosyo, Velvette, Lotus Chocolate, Toffeman, Raskik, Shunya (health-based beverages) and Paragon (known for its Pan Pasand candy). Among partnerships are tie-ups with Sri-Lanka-based Maliban Biscuits, General Mills for its Alan’s Bugles and with cricketer Muttiah Muralitharan for sports drink Spinner.
Retail growth challenges
Reliance Retail, on the other hand, which closed FY25 with gross revenue of Rs 3.3 lakh crore and 19,340 stores, was aiming to grow topline at a compounded annual growth rate (CAGR) of over 20% in the next three years, adding 2,000-3,000 stores annually, Ambani said at the AGM.
Analysts, however, have warned that with retail recovery being uneven across categories, achieving an over 20% annual revenue growth in retail would not be easy.
“Reliance Retail had a soft FY25, rationalising stores and delivering a revenue growth of 8% only for the year. While the company has optimised its business for the next phase of growth, focus on delivery will be a key monitorable,” BNP Paribas said in a report released on Monday on RIL’s AGM takeaways.
Reliance Retail has said it expects to achieve the revenue target, supported by its offline, online and B2B businesses. The company, Goldman Sachs said, saw strong tailwinds across its grocery, fashion and electronics businesses. Reliance Retail has also positioned quick commerce as a growth lever, according to Goldman Sachs and CLSA.
“With the company guiding to add 2,000-3,000 stores annually and sales growth in high single digits for its existing stores, the heavy lifting for growth will be done by its online formats such as Ajio, Shein, quick commerce and JioMart. These are slated to see a jump in their share of revenue from single digits to 20% in the next three years,” CLSA said on Monday.