Reliance Retail: Aggressive Online Expansion & Disciplined Growth

New Delhi, Jul 17 (PTI) Reliance Retail plans to expand its online operations aggressively in the current financial year, grow dark stores, omnichannel platforms, and quick-commerce arm JioMart, its Chief Financial Officer Dinesh Taluja said in an earnings call.

Giving a three-year roadmap, Taluja said Reliance Retail, the country's largest retailer, will invest in infrastructure and also focus on improving the operational metrics around availability, speed, and reliability.

Taluja said the company is evaluating each market from a unit economics standpoint and channelling investments accordingly, with the objective to achieve "a clear path to positive unit economics" in every market.

"Whenever they don't make sense, we will cut that down," Taluja said, adding that the scale built up this year is expected to translate into stronger margins and cash generation over the next two years as customer acquisition, repeat purchases and rising basket sizes feed through into the business.

It had a three-year ambition to have "2× Operating EBITDA".

The CFO said the company will also lean on a richer product mix, a growing share of its own brands, and higher monetisation and marketplace income to improve profitability over the medium term.


Describing the current fiscal as a foundation-laying phase, Taluja said the company would pursue growth "with discipline", tracking metrics such as order density per dark store, repeat rates, fulfilment cost and contribution margins against defined internal targets.

He outlined four pillars the company is focusing on this year - customer quality and engagement (including repeat rates, order frequency and NPS), commercial performance (basket size, product mix and own-brand contribution and delivered gross margin), operational excellence (availability, on-time fulfilment, cost per order and returns), and financial discipline (contribution margin, working capital and EBITDA).

Taluja said online growth this year would be "measured" and funded out of the company's existing profits, even as absolute revenue numbers continue to rise.

He added that improvements in density, business mix, productivity, inventory turns and monetisation are expected to drive better returns on capital and accelerate EBITDA and cash generation in the coming years.

Reliance Retail is the largest quick commerce player in the country, which operates through its digital retail arm JioMart, and has a wide geographical coverage.

JioMart utilises a hybrid model of 3,100+ physical stores and 600+ dark stores to service more than 1,200 cities and cover 5,100 pincodes.