Reliance may convert Metro stores into B2B outlets: Report

Reliance Retail, which recently agreed to buy Metro AG's India business for Rs 2,850 crore, is expected to convert the stores into B2B stores (business-to-business), which cater to bulk buyers and kirana stores.

These stores are expected to be rechristened Reliance Market. They will also be used as fulfilment centres for Reliance’s consumer-facing businesses, such as JioMart, Business Standard reported, citing a source in the know.

With the acquisition of Metro Cash & Carry, Reliance Market would add 31 stores to its network in 21 cities. It would also boost its reach to over 30 lakh B2B customers, of which 10 lakh are frequently buying customers, the report added.

Reliance Market started operations in 2011 and has 52 stores and 40 lakh members, according to its website.

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German parent firm Metro AG, which entered the country with its first store in Bengaluru 19 years ago, had been considering exiting the Indian market for the last few months at a time when the local players presented strong competition in the retail business, which is often considered a low-margin one. This is the second foreign retailer to exit India after French multinational Carrefour shut shop in 2014.

Reliance is placed well to crack the code in the highly-competitive industry that is estimated to grow 9–10 per cent to $2 trillion by 2032, as per the 'Racing towards the next wave of Retail in India' report by Boston Consulting Group, pointed out Akshay D'Souza, chief of Growth & Insights at Bizom, a retail intelligence platform.

The acquisition came exactly a week after Reliance entered the FMCG segment with its brand 'Independence.'

“We believe that Metro India’s healthy assets combined with our deep understanding of the Indian merchant/kirana ecosystem will help offer a differentiated value proposition to small businesses in India," Reliance Retail Director Isha Ambani had said during the acquisition.

(With DHNS inputs)