By stepping into the personal and home care segment of FMCG, Reliance is offering products at 30 to 35% lesser price heating up competition. This would attract customers to try the products and evaluate performance, quality, and perception in comparison to the same from rival established brands.
Reliance Consumer Brands Limited (RCPL) products, the FMCG arm and wholly-owned subsidiary of Reliance Retail Ventures Limited (RRVL), are available at select markets. The company is building a dealer network on a pan-India basis. Availability of its products will be scaled up across modern and general trade channels.
Sources said Reliance is creating a distinct and dedicated distribution network that comprises traditional dealer and stockists, as well as modern trade B2B channels. This highlights the company’s ambition to rise up as a relevant player in the USD 110 billion FMCG segment, which is largely dominated by Nestle, HUL, Reckitt and P&G among others.
Taking on Giants
RCPL relaunched its iconic soft drinks brand Campa earlier this month and priced it competitively at Rs10 for a 200ml bottle and Rs20 for a 500ml bottle. But this isn’t the first time for Reliance to create ripples. It had successfully disrupted the market in the telecom sector with its prices. Arvind Singhal, Technopak Advisors Chairman, said Reliance wants to compete with HUL’s Surf and Lux market leaders in their respective categories. “They have a product, which is of Rs 25 against Rs 34 of Lux, it is a substantial incentive for the consumer to try it once. Once the customer has tried it and the product is actually as good as Lux is, then Reliance can build a market. But if the consumer finds that it is slightly inferior to Lux, then Reliance will not succeed.” He believes Reliance is quite successful as it has strongly focused on areas of private consumption.
Pallab Roy, Partner, KPMG in India, outlined that the FMCG space in the country has become interesting as many companies have announced their forays and investments. The space continues to have attractive margins with good scope to grow on account of moving from loose to packaged products, as well as consumption per capita. Roy added that it also takes a good amount of time and investments to create iconic FMCG brands with pull and a formidable distribution network.
Moreover, Rajat Wahi, Deloitte India Consulting Partner, believes that with better technology, ingredients and other support available, it has become easier for new and existing players to develop and launch brands. This can be seen in many D2C and consumer brands launched every day across packaged food, health, beauty, and wellness etc.
