Reliance Retail’s two-pronged strategy to enter a highly competitive e-commerce biz

Reliance Retail’s two-pronged strategy to enter a highly competitive e-commerce biz

Reliance Retail is foraying into the intensely competitive online retailing of multi-brand beauty and cosmetics business, taking on Nykaa, Myntra and Tata’s proposed similar e-commerce business, multiple people familiar with the development said.

One of them said Reliance Brands, the Reliance Retail unit that sells upmarket brands, has devised a two-pronged strategy of a dedicated webstore as well as a new brick-and-mortar chain of high-end cosmetics products that will be something similar to LVMH’s Sephora.

“They are building a beauty business that would be like a Nykaa for online and a Sephora for the offline side,” he said asking not to be named. “They will sell top international brands as well as their own private labels.” He said the cosmetic venture could also have a webstore on Ajio, Reliance Retail’s fashion and lifestyle e-commerce platform.

A Reliance Brands spokesperson said that the company has been consistently building skincare, beauty and fragrance offerings within the portfolio of brands they sell. Reliance Brands markets more than four-dozen of high-end international labels in India including Armani, Burberry, Canali, Diesel, Gas, Hugo Boss among a host of other brands.

Reliance Brands said it offers a wide range of skin and hair-care products of Japan-based Muji while fragrances of Tiffany & Co., Armani, Zegna and Diesel are doing “exceedingly well.” Similarly, Superdry has been expanding its play into this segment with the launch of bodyspray and bodywash, Reliance Brands said in an emailed response.

“With rise in personal grooming and multiple gifting occasions – this space is certainly one to watch out for,” the spokesperson said without giving answers to the specific questions on the company’s online and offline plans for beauty business.

Two top executives of two prominent malls said Reliance Brands has indicated them about the space requirement for the proposed beauty business.

ET had reported last week that Tata’s unit Tata Digital is also finalising plans to launch a new e-commerce platform exclusively to sell beauty and cosmetics products.

Beauty and cosmetics is one of the fastest growing segments of India’s $850 billion retail market. Online sellers like Myntra, Nykaa and other smaller players have been gaining momentum over the years in the space.

Last month, Nykaa, that runs an eponymous e-commerce platform and a chain of about 75 outlets, filed draft red herring prospectus to raise capital in an initial public offering at a valuation of $4 billion.

A 2021 report by financial services firm Avendus has predicted the online personal care and beauty market in India to touch $4.4 billion by year 2025. Online beauty and personal care shoppers are likely to increase in numbers by over four times — from 25 million in FY20 to 110 million in FY25, it said.

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