Reliance Digital plans to launch private labels

Betting on higher margins from private labels, Reliance Digital, the consumer durable chain of Mukesh Ambani's Reliance Retail, is planning to introduce its own brands of home theatres, LCD televisions and digital cameras. The brands, according to a source, will be called Rldigi.

Reliance Digital is planning tie-ups with domestic and international consumer durable and appliance companies. These private labels are expected to contribute 12-15 per cent of Reliance Digital's business in the coming years.

High-end consumer durables have a margin of 8-15 per cent, while private labels have 18-25 per cent margins due to better sourcing and branding.

When contacted, Ajay Baijal, CEO of Reliance Digital, denied the story but said: "Once we open 10-12 stores, we could launch private labels. We are evaluating categories where we can launch our own brands. We need to understand consumer behaviour."

At present, Reliance Digital has one store each in Bangalore, Hyderabad, Noida and Gaziabad, and has plans to open 150 in three to four years.

It has also tied up with Apple to sell its products under the iStore. "The company is setting up 60 iStores in the next 18-24 months," said Baijal. Today, it set up an iStore in Mumbai after Hyderabad and Bangalore.

"There is good potential for private lables in kitchen appliances, cables, storage devices and accessories."