How Ambanis' Reliance Went from Oil Giant to Consumer Powerhouse

Billionaire Mukesh Ambani-led Reliance Industries' consumer arm, Reliance Retail Ventures Ltd (RRVL), is reportedly in the race for another major acquisition. This time, it's eyeing the India operations of Chinese consumer electronics and appliance maker Haier, which is looking to sell up to a 51% stake. RRVL has joined the bidding process, which already includes a consortium led by Sunil Mittal of the Bharti Group, besides the Burman family of Dabur (in partnership with TPG), the Amit Jatia family with Goldman Sachs, and BK Goenka in collaboration with GIC Singapore.

This comes as Reliance's consumer businesses — which also includes telecom giant Jio — have emerged as key growth drivers for the over 50-year-old conglomerate. Since Mukesh Ambani took over Reliance Industries Limited (RIL) more than two decades ago following the passing of his father, Dhirubhai Ambani, the company’s growth had primarily been fueled by its energy vertical, including petrochemicals and oil & gas.

However, after five years of multi-billion-dollar investments, a string of acquisitions, global brand tie-ups, thousands of store launches, and a recent business rationalisation, Reliance’s consumer-facing segments are now leading its next phase of growth.

After Reliance Industries reported its FY25 earnings last week, analysts say the company's consumer-facing businesses, which include telecom giant Reliance Jio and Reliance Retail, will continue to drive growth in the next leg of expansion.

"We believe the next leg of growth for RIL would be driven by better earnings contribution from the ramp-up of optic fibre broadband services, enterprise business, and new commerce. Additionally, the company’s unique online-offline retailing strategy would aid growth and drive up the retail business’s margins," said Mirae Asset Sharekhan in a note on April 28.

For the company's O2C segment, which is still the largest revenue source for Reliance Industries, the brokerage said that the recent decline in refining margins and the export duty on diesel/ATF would lead to lower realised margins.

These comments came after the conglomerate in FY25 saw a notable shift in its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)—a metric preferred to gauge a company's growth compared to overall revenue or net profit.

Reliance reported total EBITDA of Rs 1,748 billion for FY25. Of this, about 56% (Rs 986 billion) came from non-energy businesses, including Jio, Retail, and other digital ventures. In contrast, the traditional oil-to-chemicals and oil & gas segments contributed just 44% (Rs 762 billion) to total EBITDA.

Just three years back in FY22, this distribution was almost the opposite, with the energy segment providing 52% of overall EBITDA, as per data shared by JM Financial.

What Led to the Shift?

The answer could be found in what RIL Chairman Mukesh Ambani said during the 2020 annual general meeting of the group, when he also announced investments by some of the world's largest sovereign wealth funds—ADIA and Mubadala of the UAE, and PIF of Saudi Arabia—in the company.

"(Reliance Industries') consumer businesses today contribute to about 35% of our consolidated EBITDA. Just five years ago, nearly all of our EBITDA was from our energy, hydrocarbon and materials business. Since then, our consumer and technology businesses have rapidly achieved scale by their exponential growth," he said in the July 2020 virtual shareholders meeting amidst the COVID-19 pandemic.

Eventually, a large part of the investment by the sovereign wealth funds and Reliance's own cash infusion was used to fund the expansion of Reliance Retail Ventures. According to a report by Bloomberg citing Bernstein, entities from the Qatar Investment Authority to General Atlantic collectively invested $8.24 billion between 2020 and 2023 for an 11.9% stake in the firm. The Mukesh Ambani-led group itself invested Rs 4,330 crore in Reliance Retail in FY23 through equity and redeemable preference shares. These investments were used to open new stores and buy India's regional and legacy consumer brands.

Why Haier Fits RRVL's Portfolio

In consumer electronics, the company runs Reliance Digital, MyJio Store, and JioMart Digital. These stores saw a 26% year-on-year growth in FY25 in average bill value and a 200-basis point improvement in conversions. The group’s own electronics brands grew 30% year-on-year, supported by a 60% growth in its merchant partner base and the launch of new products across consumer durables and domestic appliances.

So, what could Haier add to its portfolio? The Chinese air conditioner and appliance maker is the third-largest consumer electronics player in the Indian market, behind South Korea's LG Electronics and Samsung. In 2024, Haier Appliances India crossed $1 billion in revenue, marking a 36% year-on-year growth. The company has set a target of $2 billion in sales within the next three to four years, with plans to invest in a new plant and expand its existing units in Pune and Greater Noida.

RRVL’s Rapid Expansion

In 2020, Reliance Retail had about 12,000 stores across India, with the main brand being JioMart. Today, the company operates a complex network of 19,340 stores serving 349 million registered customers and managing over 60 brands. A vast number of these were acquired or launched in the last few years.

In 2019, Reliance Retail made its first international acquisition by purchasing the iconic British toy retailer Hamleys for approximately Rs 620 crore.

In 2020, it acquired a 60% stake in Netmeds, an online pharmacy, for around Rs 620 crore, and a 96% stake in Urban Ladder, a furniture and home decor retailer, for Rs 182 crore.

In 2021, the company diversified further with a 55% stake acquisition in Addverb Technologies, a robotics firm, for $132 million, and took over lingerie brands Zivame and Amante. Additionally, Reliance Retail acquired a 66% stake in Justdial, a local search engine, for Rs 5,710 crore, and a 96.49% stake in Milkbasket, a micro-delivery service.

The expansion continued in 2022 with the acquisition of Clovia, an innerwear brand, for $125 million, and the purchase of Metro Cash & Carry India, a wholesale business. In 2023, Reliance Retail acquired V Retail, which operates 32 Centro stores, and Bismi, an electronics and grocery retail chain with 30 stores in Kerala. By 2024, the company also entered into a 50-50 joint venture with Israeli innerwear maker Delta Galil to expand its presence in India.

Not just in retail, the company has aggressively expanded its footprint in the fast-moving consumer goods (FMCG) sector through its new entity, Reliance Consumer Products Limited, incorporated in 2022 — the same year Mukesh Ambani's daughter, Isha Ambani, was appointed Executive Director of RRVL.

Through a series of acquisitions and partnerships, it has challenged established players like Hindustan Unilever and ITC.

In the beverage segment, RCPL acquired the iconic Campa Cola brand and formed a joint venture with Sosyo Hajoori Beverages, taking a 50% stake to revitalise the century-old Indian soft drink label. Additionally, in 2024, Reliance partnered with Sri Lanka's Elephant House to introduce its beverages to the Indian market.

In confectionery, RCPL acquired a 51% stake in Lotus Chocolate Company and fully acquired the Ravalgaon brand, enhancing its presence in the sweets and snacks category. The company also partnered with Sri Lankan biscuit manufacturer Maliban to bring its products to India, targeting the Rs 38,000 crore biscuit market.

To bolster its private label offerings, Reliance launched the 'Independence' brand, covering staples like edible oils, packaged atta, pulses, and biscuits. This complements its existing in-house brands such as Good Life and Snac Tac, which span packaged foods, home cleaning, and personal care products.

With about Rs 11,500 crore in revenue in FY25, RCPL is reportedly the fastest-growing FMCG player in India. It has a presence across over 1 million retail outlets and a distributor network of 3,200. The company has also begun exporting its products to the Middle East and other Asian markets.

Its fashion and lifestyle offerings include homegrown brands like Trends, Trends Footwear, Yousta, Avantra, Azorte, Centro, and Reliance Jewels. The company has also forged strong international partnerships, bringing global brands such as Hamleys, GAP, Burberry, Marks & Spencer, Steve Madden, Coach, Tiffany & Co., and Balenciaga to Indian consumers. In e-commerce, it operates the Ajio platform and has partnered with China’s fast-fashion giant Shein to relaunch it in India.

Rationalisation and Recovery

While the string of expansions had future potential, the pace of growth led to substantial pressure on the company's revenue in the last quarters of FY24 and early FY25, as consumption in urban India also slowed. During the Q3 FY25 earnings report, Reliance Retail reported a 3.5% drop—the first quarterly decline since the pandemic.

In a broader rationalisation effort at Reliance Retail Ventures Ltd (RRVL), according to Bloomberg, RIL slowed its pace of store expansion, closed stores, and cut marketing spend for its fashion e-commerce platform Ajio. The report also noted that RRVL saw approximately 38,000 layoffs in FY24.

As per the March report, operational control has tightened too. Since October, any hiring for roles with salaries above Rs 19 lakh annually now requires direct approval from Mukesh Ambani’s office. Similarly, hiring for shop-floor staff beyond pre-approved headcounts must be cleared by Reliance Retail Managing Director V. Subramaniam—decisions that were previously made by vertical heads.

Reliance Retail also wrote off its $200 million investment in quick commerce platform Dunzo, highlighting the firm’s cautious transition into quick commerce. Bloomberg reported that Isha Ambani is said to be closely reviewing brand performance and has met with the leadership of all global labels under Reliance Retail since November, signalling tighter oversight and possible exits from underperforming partnerships.

In the last quarter as well, Reliance Retail temporarily shut several of its department store chain Centro outlets. According to a report by The Economic Times, the company is shifting focus towards promoting its in-house and licensed brands more prominently. In September 2022, Reliance had rebranded several of Future Group’s Central stores as Centro after taking over leases on vacated properties.

These measures have paid off, as per analysts in the latest earnings.

"Sharp moderation in net store addition continues, falling to 504 net openings in FY25 vs 2,485 in FY22, 2,844 in FY23 and 796 in FY24; this is due to an elevated closure rate of 81% in FY25 (calculated closed/gross opened), surging from a mere 3% in FY22. This is a potential portfolio rationalisation measure on 1) diverse business segments, such as FMCG, grocery, beauty & personal care (BPC), fast fashion shifting to online, 2) increased competition, and 3) closure of loss-making & lower profitable stores," said Elara Securities on April 27.

The brokerage added that while early expansion may have prioritised scale over sustainability, they believe two years into rationalisation could strengthen the core portfolio.

"The retail business saw a strong recovery with improved efficiency after store rationalisations and industry-leading performance in the grocery business," Sharekhan said in its note.

RRVL’s Growth Forecasts

With Rs 243 billion in EBITDA, the retail business is still the third-largest contributor to the conglomerate after Oil and Chemicals (Rs 685 billion) and the Jio/Digital segment (Rs 603 billion). But according to Nuvama's estimates, the segment will see a 10% compound annual growth rate (CAGR) between FY25 and FY30, slightly below the 13% forecasted CAGR of the company's digital business but more than the growth rate of the O2C segment in the same period.

According to JM Financial's estimates, in FY27, Retail will see EBITDA growth of 19%, in contrast to just 10% expected growth for the O2C business. Reliance Jio and other digital businesses are expected to see a 21% EBITDA growth rate in FY27.

However, none of these estimates take into account RRVL’s reported plans to take over as much as a 51% stake in Chinese electronics and home appliances maker Haier’s India unit.

Energy Still Under Pressure

But while RRVL is pushing ahead with new potential acquisition plans, Reliance Industries’ oil-to-chemicals (O2C) business has continued to be under pressure due to a mix of global and sector-specific challenges.

In his 2020 AGM speech, Reliance’s Chairman, while noting that the consumer business is seeing "hyper-growth," said that their traditional growth engine—Oil to Chemicals and Upstream businesses—was under pressure due to the "challenging market environment."

Years later, Western sanctions on Russia amid the Ukraine war and volatile energy prices have weakened the segment even as it has seen some growth backed by the domestic market.

Analysts say that factors like weaker transportation fuel margins, sluggish global demand, and the addition of new refining capacities have squeezed the unit’s profitability. In Q4 FY25, the segment saw a 10% year-on-year EBITDA drop. Analysts expect continued margin pressure due to weak macroeconomic trends and oversupply, especially coming from China and Europe. So for the near term, as per analysts, Ambani’s Reliance is expected to see its consumer business outshine the fossil fuel segment.