Reliance's life with Metro

RELIANCE RETAIL's (RR) ₹2,850 crore acquisition of Metro Cash & Carry India last December held out much promise. A year on, however, market realities appear to have slowed the integration process.

- VIVEAT SUSAN

The acquisition gave RR access to 31 cash-and-carry outlets in 21 cities and a database of three-million-strong merchant customers and the agreement with German retailer Metro AG last year, allows for the Metro brand name to be used during a "transition period" or about two years.

Persons in the know say RR has been evaluating synergies between Metro Cash & Carry and JioMart B2B; it wants to reduce overlapping roles and work towards a common sourcing system for both online and offline as well as a new brand name. Industry experts believe RR is looking at an omnichannel presence in the domestic organised wholesale market by combining the on-ground strengths of Metro and the online platform that JioMart B2B provides.

A new store has been launched in Patiala recently to strengthen the network. And the plan is to launch at least 35-40 new stores to reach out to more kiranas, notably in tier II and III markets, where the concentration of mom-and-pop stores is higher, according to experts. Of the 12-million kirana stores tracked by market researcher NielsenIQ, more than half or almost 8-9 million stores are in semi-urban and rural areas.

A mail sent to RR elicited no response till the time of going to press. However, during the Q2 earnings call in October, Reliance Retail's CFO Dinesh Taluja said that the integration between Metro Cash & Carry and the company's B2B grocery division (JioMart) was "under progress".

"This will help us provide an omnichannel experience to merchants and further strengthen our value proposition for the segment," Taluja said.

Challenges aplenty