Mukesh Ambani's retail business is now bigger than his petrochemical unit in terms of annual revenues. Reliance Industries' retail business reported revenues of ₹1.62 lakh crore in FY20 compared to ₹1.45 lakh crore earned from the petrochemical unit.
The revenue from the petrochemical business has dipped over 15 per cent in FY20 due to the coronavirus lockdown. Last year, the petrochemical business brought in revenues of ₹1.72 lakh crore compared to ₹1.30 lakh crore from retail business.
Reliance Retail operates 11,784 stores covering 28.7 million square feet with over 1,500 stores opened in the year and a record 30 per cent retail space added. Footfalls at 640 million, were up 17 per cent Y-o-Y with 125 million registered/loyal customer base, up 40 per cent Y-o-Y.
However, the coronavirus pandemic has had some impact on the retail business too revenues and EBIT for the fourth quarter was down by 15.7 per cent and 13.7 per cent respectively compared to the previous quarter sequentially. But on a year-on-year basis, the company’s revenues and EBIT grew by 4.2 per cent and 19.8 per cent respectively.
In Q4 the company posted a revenue of ₹38,211 crore in comparison to ₹45,327 crore in the third quarter whereas its Segment EBIT was ₹2,062 crore against ₹2,389 crore EBIT in the previous
quarter, thus recording a decline.
In a statement the retail arm of Reliance Industries Limited (RIL) said, “Overall, the year has been a growth year with March being a tepid month due to the Covid-19 lockdown impact.”
In Consumer Electronics, Reliance Digital maintained its leadership position, said the company. “The fashion and lifestyle category delivered a credible performance despite the shutdown,” it added.
According to the company, In response to the lockdown situation, all grocery stores were kept open for extended hours to provide access and availability of essential products to customers.
“Grocery category witnessed strong growth led by SMART and Reliance Fresh, driven by store expansion and like for like growth in existing stores. During the month of March, grocery stores recorded their highest ever sales surpassing the Diwali month performance despite logistical challenges,” the company said.
Other ventures
RIL launched the Jio Mart Pilot initiative, to work with kirana stores by offering services and supplies during the lockdown period.
“Daily orders grew by 4x during the lockdown period as kirana partners focused on serving their neighborhoods during the time of crises,” it said.
An interesting investment between Reliance Industries Limited’s Jio Platforms Ltd and Facebook Inc. was announced on April 22. The two companies signed binding agreements for an investment of ₹43,574 crore by Facebook into Jio Platforms. Facebook’s investment will translate into a 9.99 per cent equity stake in Jio Platforms on a fully diluted basis.
This investment would enable new opportunities for businesses of all sizes, “but especially for small businesses across India and create new and exciting digital ecosystems in India.”
Concurrent with the investment, Jio Platforms, Reliance Retail and WhatsApp have also entered into a commercial partnership agreement to accelerate Reliance Retail’s New Commerce business. “JioMart would be integrated with WhatsApp to ensure that consumers are able to access the nearest kiranas who can provide products and services to their homes by transacting seamlessly with JioMart using WhatsApp,” it said.