Reliance Retail is likely to merge its subsidiary companies floated for its various private label categories with itself to bring about operational efficiencies into the business.
The retail company had subsidiaries for its private label brands in categories ranging from dairy to soaps.
It is now looking at streamlining its operations with its vendors and suppliers in both its private label and general business by merging the operations with the parent retail company.
“We had hived off the operations of the private labels under different companies, but now we are looking at having seamless operations with common buying and sourcing teams as there is duplication,'' said a Reliance official.
Reliance Retail had floated subsidiaries such as Reliance Dairy Foods (for its Dairy Pure brand) and Reliance Home Products (for its other food products) and these private companies had independent sales, sourcing and buying teams for the respective private labels of the company.
“All these separate companies will now come under the Reliance fold. Amalgamating the operations is also expected to drive margins in the retail business.
“The only difference in private labels is that we actively work with the vendors to develop the product for our stores, unlike in the case of the general suppliers where we get our margins due to efficiencies of scale,'' added the official.
However, there would be no downsizing of employees as a result of this merger.
Meanwhile, Reliance Retail is exploring alternative distribution channels and has initiated a direct home delivery project in Navi Mumbai through housewives for its private brands such as Dairy Pure, Good Life, Mopz, Expelz, Extern and Calcident.
In fact, today the Mukesh Ambani-owned company has a presence in almost every FMCG category under its private label, except for categories such as chocolates and edible oil.
“We have started a pilot in Navi Mumbai for direct selling, but it is still a small business,'' added the official.
At one point, the company had also decided to sell its private labels to smaller retailers and kiranas but the plan was shelved thereafter.