Reliance to acquire dozens of brands in $6.5b consumer goods play

MUMBAI, May 15 (Reuters): India's biggest retailer Reliance will acquire dozens of small grocery and non-food brands as it targets building its own $6.5 billion consumer goods business to challenge foreign giants like Unilever, two sources familiar with the plan told Reuters.
Reliance, run by Indian billionaire Mukesh Ambani, plans to build a portfolio of 50 to 60 grocery, household and personal care brands within six months and is hiring an army of distributors to take them to mom-and-pop stores and bigger retail outlets across the nation, the sources added.
The consumer goods push under a vertical named Reliance Retail Consumer Brands will come on top of Ambani's brick-and-mortar store network of more than 2,000 grocery outlets and ongoing expansion of "JioMart" e-commerce operations in India's nearly $900 billion retail market, one of world's biggest.
Reliance is in final stages of negotiations with around 30 popular niche local consumer brands to fully acquire them or form joint venture partnerships for sales, said the first source familiar with its business planning.
The total investment outlay planned by the company to acquire brands isn't clear, but the second source said Reliance had set a goal to achieve 500 billion rupees ($6.5 billion) of annual sales from the business within five years.
"Reliance will become a house of brands. This is an inorganic play," said the person. Reliance did not respond to a request for comment.
With the new business plan, Reliance is seeking to challenge some of the world's biggest consumer groups, like Nestle, Unilever, PepsiCo Inc and Coca-Cola, which have been operating for decades in India, the sources said.
It's a daunting task, though, to beat such well-established foreign companies that have their own manufacturing units in India and thousands of distributors who take their world-famous products like Pond's creams or Maggi noodles across the vast nation of 1.4 billion people.