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It was supposed to be their biggest business in a decade's time. It was supposed to be India's answer to Wal-Mart. It was supposed to take the Indian retail industry by storm. But Mukesh Ambani's dream venture Reliance Retail (as of now) has turned out to be
anything but all this.

These comments might seem premature and, considering the might of Reliance, many of us will give them a good chance of making a come-back, but at least for now, Mukesh Ambani and Raghu Pillai's dreams seem to have gone sour.

"Aggression"... The tool that Reliance used very successfully in its telecom foray to capture the market and become a leading player seems to have done it all the other way this time. During the telecom foray in late 2002, Reliance Infocomm (now Reliance Communications) captured the imagination of not just the consumers but also the competitors. But this time, they seem to have caught the eye of distracters, middlemen and politicians!

Probably, the big-wigs of Reliance Retail had the view that the opposition was restricted to foreign retailers making an entry into the country and to FDI in retail, but their 'estimates' turned out to be far from correct. Also, the 'political disconnect' with the likes of current political heavies like Mayawati and the Left made matters worse for the company. What followed were job cuts and an exit from UP, the state that was supposed to generate 15% of the total revenues of 1 trillion INR by 2011 for Reliance Retail.

To make things worse, the opposition seems to be pretty much discriminatory. Retail chains like Spencer's & Big Bazaar continue to function normally in Uttar Pradesh, while Reliance was forced to wind up its business.

Talking of aggression being Reliance's enemy, Subhiksha is a classic case. This retail chain has a similar format (if not identical) to Reliance Fresh, and has been slowly but steadily capturing the market without much hype. Probably its silent forays are the reason why it hasn't faced any opposition like Reliance has.

Also, the old Reliance habit of wiping out competition did not go down too well with the middlemen. It seemed like a David-Goliath battle, but for now Goliath has been stung and stung badly...

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* Contributed by: -
Shekhar Arya,
MBA 2nd Year,
Department of Management Studies, IIT Roorkee.