Mukesh Ambani, chairman of Reliance Industries, is the richest man in Asia. The billionaire has a net worth of USD 101.9 billion, as per Forbes. His Reliance Group is trying to capture the market in different sectors. Now, Reliance Industries’ FMCG company, Reliance Consumer Products (RCPL), is offering margins of 6-8 per cent to distributors and trade partners to incentivise them to stock up and push its portfolio of groceries and daily essentials, executives with direct knowledge of the matter said, as per an ET report.
The margins are nearly twice that of the industry average. Major consumer goods companies such as Britannia, Hindustan Unilever, Coca-Cola and Nestle offer margins of between 3 per cent and 5 per cent to distributors and trade.
The FMCG division of Reliance Retail Ventures offers edible oils, pulses, staples, and other things. “Reliance Consumer Products is replicating the strategy it began with (cola brand) Campa to all categories it is present in … it is a disruptive strategy and works to incentivize the supply chain, more so for new entrants,” one of the executives said, the news outlet reported.
Nearly all RCPL brands are priced 20–40 per cent lower than competitors. This may pave the way for a price war soon. Earlier, Tata Consumer Products Ltd (TCPL) revised the price of Tata Gluco Plus due to aggressive pricing from Reliance’s Campa Cola.
