Reliance Fresh launches six stores in Indore

Reliance Retail Ltd today started operations in the central India with the launch of six pilot Reliance Fresh stores here. Announcing the launch, the company's President and Chief Executive (Operations and Strategy) Raghu Pillai said the Mukesh Ambani-promoted firm will set up such stores in 70 cities across the country by the year-end. "Within six months of launch, we have 151 Reliance Fresh stores across the country covering 419,000 sq ft of space." Allaying fears of the farmers and vendors, Reliance Retail group Vice-President Farhan Ansari said: "In fact, now the farmers don't have to worry about the marketing of their produce." The farmers will now have the opportunity to get the best price for their products at one place, Ansari said. Reliance Retail is building a business that would focus on competitive offerings to Indian consumers across several verticals in diverse geographies through multiple formats. This will be built on an integrated platform with a robust supply chain, logistics and information technology infrastructure, he said. However, protesting the entry of Reliance into fresh vegetable and fruits market, the local vendors set afire an effigy of the company's Chairman and Managing Director Mukesh Ambani here.

Mukesh Ambani’s new kirana gharana

Mukesh Ambani’s Reliance is opening up fruits-vegetables-grocery outlet storescalled Reliance Fresh , all over in India, in Punjab, Rajasthan, Gujarat, Jharkhand, and several others. So far, West Bengal has opposed Reliance Fresh expanding into that state, but that opposition, too, will slowly fade.

So what if some big billionnaire wants to sell us vegetables and fruits? The shops promise to be fresher, cleaner, and cheaper. Reliance, like Walmart, will probably buy directly from the farmers, cutting a lot of middlemen and that kind of organized retailing should be able to pass on a lot of benefits and discounts to the consumers. After all, doesn’t or shouldn’t competition bring about the best in everyone? What’s wrong if the local vegetable vendors bring down the prices, wash their fruits and vegetables, and clean up their act?

Here’s the issue. In Ranchi yesterday, vegetable vendors attacked the Reliance Fresh outlet, protesting the retail juggernaut’s new business foray into retail business. “…if Reliance sells vegetables, then what we will do? Sell mobile phones and petrol…”, remarked one vegetable vendor.

One of the reasons Reliance is rushing into this, is that Walmart has been knocking at India’s doors for a while, now, threatening to crush the rest of the retail businesses with its mighty giant force. By entering into this arena a little earlier, Reliance is setting itself up either as an established takeover candidate, or a palatable desi alternative that cannot be overlooked in the wake of a foreign tidal wave.

India’s retail grocery stores will somehow find a way to fit into the Reliance model, but for the smaller vendors, it is time to pack their bags and go home. Or, they can do what they did in Ranchi yesterday - attack the Reliance Fresh stores and get beaten by the cops.