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Reliance Retail to expand business into fast-growing toy sector through Rowan Brand




Reliance Retail is expanding its business into the affordable and fast-growing sector through its brand Rowan. It will be commencing its operations in the affordable toy segment with a smaller shop size. The company was running its toy distribution business through its brand Rowan. Rowan, which is a homegrown brand to the front end by opening its first EBO (exclusive brand outlet) at Gurugram in the NCR area in the last quarter. They started with a store size of approximately 1,400 square feet.

The Mukesh Ambani-owned and led company will offer consumers a range of affordable toys under its new format. The toys will not only be from the brand Rowan but will also be from other brands according to an industry source. Reliance Retail already has the popular and iconic British toy retail brand Hamleys under its umbrella. Hamleys was acquired by Reliance in 2019, marking the first acquisition of a global retail brand by the company.

Hamleys will continue to operate in the premium space, while Rowan will help Reliance Retail to tap the mid-premium and mass segment with its affordable offerings, said the source.
The unit value of toys will be much lower at Rowan stores, and the discounts offered will be higher. Hence, the products will be more affordable. Moreover, unlike Hamleys, the store size of Rowan stores will be much smaller, between 500 sq ft and 1,000 sq ft. “We also launched Rowan, which is a new format from Reliance as a toy store, which is a small format, typically around 500-1,000 sq ft in size, selling more affordable toys. So, that format also got launched during this quarter, and we’ll also see it further ramp up as we go along,” Gaurav Jain, Head of Strategy and Business Development, at Reliance Retail said. Hamleys currently has a global footprint across 15 countries with over 200 doors and is India’s largest chain of toy stores.

With both brands in its portfolio, Reliance Retail Ventures Ltd (RRVL) is one of the leading toy distributors. Earlier in June this year, Reliance Brands Ltd, a unit of Reliance Retail Ventures Ltd, had announced a joint venture with Italian company Plastic Legno SPA and had acquired a 40% stake in the latter’s toy manufacturing business in India. According to a joint report by industry body FICCI and KPMG, the Indian toy market was estimated to be around $1 billion in 2019-20 and is expected to double to $2 billion by 2024-25.

Mukesh D Ambani, Chairman, and Managing Director, of Reliance Industries Limited, said the new quarter saw record performance in the company’s consumer businesses, which continue to scale new milestones every quarter. Reliance Industries Ltd on Friday posted flat growth in net profit in the September quarter after a newly introduced windfall profit tax and lower refining margins dented earnings in the mainstay oil business.

The oil-to-retail-to-telecom conglomerate’s consolidated net profit at Rs 13,656 crore in July-September was almost unchanged from Rs 13,680 crore net earnings in the same period last year, according to a company statement. Sequentially, net profit fell 24 percent from Rs 17,955 crore in April-June.

This is primarily because the firm’s mainstay oil-to-chemicals (O2C) business earnings were hit by a new tax that the government imposed on the export of diesel, petrol, and ATF from July 1. The government slapped a tax on the export of fuel as well as crude oil produced domestically to take away gain accruing from the spurt in global energy prices following the war in Ukraine. The day was saved by a record rise in consumer-facing telecom and retail businesses as well as earnings from natural gas production. But for the windfall profit tax, the net profit would have been 20 percent higher.

“In the digital services segment, we have seen consistent net subscriber growth and higher engagement,” Ambani said. “Jio has announced a beta trial of its industry-leading stand-alone 5G services and is rapidly moving towards an ambitious and fastest True 5G rollout across India.” The retail business delivered a record performance with a strong recovery in footfall, store expansion, and digital integration, he noted. “The performance of our O2C business reflects subdued demand and a weak margin environment across downstream chemical products. Transportation fuel margins were better than last year, but significantly down the order,” he said. “The performance of the segment was also affected by the introduction of special additional excise duties (windfall tax) during the quarter to ensure stable supply and lower volatility in the domestic market.” Reliance Jio Infocomm, the country’s largest telecom operator by subscribers, continued to grow revenue per user at Rs 177.2 per subscriber per month in Q2 from Rs 175.7 per user per month in the previous month. The company had 42.76 million subscribers.

Retail continued to witness recovery. It added 751 new stores to expand to 16,617 stores spread over 54.5 million square feet, covering all corners of the country. Tracks increased in the run-up to the holidays and online sales. Gross debt rose to Rs 294,859 crore at the end of September from Rs 266,305 crore at the end of March. After including cash, net debt stood at Rs 93,253 crore, up from Rs 34,815 crore in March 2022. The firm, in partnership with bp plc of the United Kingdom, produced 19 million standard cubic meters of gas per day from the KG-D6 block in the Bay of Bengal, or about 20 percent of the country’s gas production.

Reliance Retail has also been in the news for the recent launch of JioMart, through which customers will be able to order groceries through WhatsApp. Reliance Retail’s customers will now be able to order groceries on WhatsApp, as tech giant Meta and Jio Platforms have collaborated to launch JioMart on the popular messaging platform. JioMart on WhatsApp will enable users in India, including first-time online shoppers, to seamlessly browse through JioMart’s grocery catalog, add items to their cart, and make the payment to complete the purchase, without leaving the WhatsApp chat, according to a joint statement.