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A targeted sales turnover of Rs 90,000 crore (US$ 20 billion) by 2010 with a planned investment of Rs 30,000 crore over the next five years - that's the retail vision of Mukesh Ambani and his RIL retail team. RIL's retail venture seems all set to achieve the status of being the flag-bearer of India Retail Inc, and that too in record time!

Culling information from all possible sources, Images F&R Research attempts to put the Reliance Retail jigsaw in order and see how the concept and strategy differentiates from the existing competition, how it impacts the intermediaries and consumers, and more interestingly, how will it stand up to the real competition from global retail powerhouses like Wal-Mart, Carrefour, Target, Metro, Sears and Tesco that are eager to enter the Indian retail arena once the FDI barrier is lifted. Read on for the full story…

It's been in the news for quite some time now. Earlier, about a year ago, it was only whispered in close industry circles. Slowly the whispers become louder, and the word gained ground that India's largest private sector company, Reliance Industries Limited (RIL), is entering the Indian retail sector in a real big way.

But with virtually nothing coming from anyone in the know inside RIL about their retail plans, this has to be one of the most closely guarded secrets of India's corporate story.

Blueprint for 800-odd Towns/Cities: Initial Investment Rs 3,350 Crore

Amidst all sorts of speculations in the media circles about RIL's intended retail foray, the word finally came out on January 23, 2006, when the Mukesh Ambani-controlled Reliance Industries Limited presented the mega retail initiative plans to its board of directors who subsequently gave their consent to pursue the retail business through a wholly-owned subsidiary of the company – likely to be christened Reliance Retail Limited.

The Reliance Retail blueprint envisages nation-wide chains of hypermarkets, supermarkets, discount stores, department stores, convenience stores and specialty stores, in about 800-odd cities and towns across the length and breadth of India. The RIL board of directors approved the initial phase of the retail foray at an estimated cost of Rs 3,350 crore (US$ 750 million).

That was big news for both the national and international media, which went all agog again with intense speculation. Giving full respect to the importance of this announcement, more than one leading international daily – chiefly, The Financial Times – gave this news a front-page treatment, speculating (like many others) that this investment could just be an initial tranche of a much larger commitment from Reliance Industries towards the retail project.

Just how big and grand this investment is for the Indian retail sector can be gauged by the simple fact that the entire Indian retail sector is estimated to be at Rs 1050,000 crore (US$ 233 billion) – growing at five per cent annually – and the estimated share of organised retail is only Rs 36,000 crore (US$ 8 billion), at present, albeit growing at over 30 per cent every year.

That makes Reliance Retail's proposed investments equivalent to about 10 per cent of India's organised retail market – such a level of investment in the Indian retail arena has been unprecedented in the country's most promising sunrise industry – retail.

So much so, projections by the Images-KSA India Retail Report 2005 of an organised retail market of Rs 100,000 crore (US$ 22 billion) by 2010 now appears conservative, likely to be achieved much earlier than 2010.

If Indian retail was lacking a whole-hearted and full-blooded thrust from a big and large corporate house (apart from the lukewarm investments made by the Tatas and ITC), it is now all set to change. Mukesh Ambani, who has been nourishing retail ambitions for quite some time now, has clearly positioned himself in to the role of redefining the entire landscape of Indian retail.

RIL Set To Become World's Largest Real Estate Property Owner

What is even more interesting is that Reliance Industries Limited will far out-surpass the Catholic Church in becoming the world's largest owner of real-estate property by virtue of its mega Retail and Satellite Township plans, in the next two to three years!

Now what exactly does this mega retail plan portend for the Indian retail sector? In fact, what exactly are RIL's plans, in terms of retail strategy? How will RIL differentiate its stores and concept from existing players who have already moved into the retail space earlier, and have already established a good foothold? How will this impact the existing retail majors – the likes of Pantaloon Retail, Trent India, Shoppers' Stop, RPG, etc? How will the consumer benefit from RIL's venture and how will intermediaries like traders, suppliers and farmers all along the supply chain network benefit? What will be the USP of Reliance Retail?

And, more significantly, how will this impact the major international retailers who plan to enter the Indian retail market? Reliance Retail is in fact giving India for the first time a real feel of the scale at which these global retail powerhouses actually operate, it is preparing India to stand up to the ensuing competition and in the process, allow consumers the full benefits of modern retail.

Retail Will Become Core Business of RIL

Reliance Industries Limited is the largest and one of the fastest growing private sector companies in India, with business activities encompassing almost all major growth sectors of the Indian economy. The company manufactures and markets a wide range of products with market leadership in almost all its businesses.

All of Reliance Group production and services ventures have one common feature – global scale operations employing state-of-the-art technology in all fields. The company is truly emerging as a well diversified conglomerate with global competence in technology, management and financial capabilities to meet the needs of a rapidly growing Indian market.

With domestic market shares ranging from 40-80 per cent, RIL is also ranked among the top 10 producers globally, for all its major product segments. It is one of India's largest business conglomerates with total revenues of Rs 1,00,650 crore (US$ 22.6 billion).

It is being speculated within the industry that the ROIs made by RIL in the retail space will far out-shadow its existing core flagship businesses – and very soon retail will become the core business for the Mukesh Ambani-controlled Reliance empire.