Reliance-Future Deal: How Ambani’s Dominance Changes India’s Retail Landscape
A shopping bag bearing a logo for Fashion @ Big Bazaar sits on a counter at a Big Bazaar hypermarket in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Reliance-Future Deal: How Ambani’s Dominance Changes India’s Retail Landscape

Asia’s richest man is on track increase his dominance of India’s $89-billion organised retail market, securing more than a quarter of the sales.

Mukesh Ambani’s Reliance Retail Ltd. will take over the retail assets of Future Group, founded by India’s big-box retail pioneer Kishore Biyani for $3.74 billion (Rs 27,513 crore). That will add hypermarkets and supermarkets in India’s large cities to the portfolio of India’s largest retailer, increasing sales to more than Rs 1,70,858.66 crore. No competitor will be even close.

The acquisition ties into Ambani’s bid to build an empire that offers data, content and commerce in Asia’s third-largest economy, a promise that has drawn everyone from Facebook to Google with investments. And it began with his reentry into telecom with Reliance Jio Infocomm Ltd. that upended the telecom sector, running rivals to ground or forcing them to merge in its path to becoming India’s No. 1 carrier by users.

Also read: What Future Group Minority Shareholders Get From Reliance Deal

What Reliance Gets

Reliance Retail will acquire retail, wholesale, logistics and warehousing assets of Future Enterprises Ltd. The deal will add Future Group’s 1,736 Big Bazaar and other stores covering close to 28.3 million square feet of retail area across various grocery and fashion segments. Reliance Retail, on its own, has 11,784 stores, including Reliance Fresh, Reliance Smart and Jio connectivity outlets. The Future Group assets will add Rs 26,000 crore revenue in grocery, food and general merchandise.

According to a JPMorgan note, the deal will complement Reliance Retail’s presence in smaller cities. Reliance Retail’s is quite strong in tier 2 and 3 cities, while Future’s assets will strengthen the reach in metro and tier 1 cities, it said.


The acquisition will increase grocery business sales by about 40% and fashion unit sales by 90% for Reliance Retail, said Amnish Aggarwal, analyst at Prabudas Lilladher, in a report.

Reliance Retail is now twice the size of Avenue Supermart Ltd., the operators of DMart outlets, in the grocery segment.


The sales of the fashion business will more than double after the deal is completed. While Reliance Retail sells apparel to shoes across price points, it gets access to Future Group’s value brands from including John Players and Lee Cooper.

Reliance Retail now gets a chance to dominate in the fashion space, said Govind Shrikhande, former managing director of Shopper’s Stop. “The organised fashion market is approximately $50 billion and Reliance Retail had a higher number of brands in the bridge to luxury space. Future on the other hand, has brands which are more accessible to the mass market in terms of price points and was under driven.”

Future Group’s brands including All, Central, and John Miller have a strong potential, complimenting Reliance’s existing portfolio, he said.

Online Push

Reliance started investing in the online format during the pandemic lockdown by launching JioMart as it challenges the duopoly of Amazon-Flipkart. While the Future Group assets don’t bring any significant online presence, they strengthen the supply line for Ambani’s marriage of online and offline commerce.

Reliance Retail’s focus is on strengthening supply chain, omni-channel play and scale up JioMart, said Aggarwal.

According to JPMorgan, retail (including 990 small stores) and supply chain (warehousing/logistics) infrastructure will accelerate the scale-up for JioMart, which currently services 200 cities.

Also read: Reliance-Future Deal: How Future Enterprises Looks Post-Consolidation

Formal Vs Informal

The deal to acquire Future Group assets comes as India’s retail sector continues to formalise. The organised retail market, according to Reliance Retail’s 2019-20 annual report, is estimated to grow at an annualised rate of 21% in the next five years.

The acquisition takes Reliance Retail’s leadership to the next level and it just becomes far larger than all other players in the country, said Pankaj Jaju, chief executive officer at Metta Capital Advisors, who advised Future Group on the transaction. “The conversation is always around organised retail impacting unorganised retail, but the reality is that unorganised retail has continued to grow as organised retail has also grown and the market is large enough to accommodate big and small players.”

Also read: Amazon and Ambani’s Jio Are Spoiling for an Epic India Fight

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