Reliance retail hub in Thailand

Company to set up sourcing warehouse.

Reliance's retail division will make Thailand its procurement hub for consumer products and will set up a warehouse in that country.

Sources close to the development said Reliance would source a bulk of fast moving consumer goods (FMCG) and consumer durables from China and other countries in South East Asia like Thailand and Indonesia, which it would stock at its warehouse in Thailand before bringing them to India.

Some local companies said the Reliance move to source a large part of the products internationally was a cause for concern.

"Products, mainly toiletteries and food products from South East Asia, are available at organised retail chains and even neighbourhood outlets, which are cheaper than their Indian counterparts. With Reliance coming into the picture, the prices of these products will go down even further," industry analysts said.

The company, it may be mentioned, plans to open about 5,500 outlets across the country. Reliance sources refused to comment.

The company has also started working out agreements with local FMCG companies to source products. It has sent out detailed mails and questionnaires to the companies, outlining its plans, and asking for details on their products.

The company is believed to be pushing for heavy discounts of about 40 per cent on the maximum retail price or MRP of products, far higher than the 20-30 per cent that is generally given to modern trade.

But sources indicate that Reliance has been open to negotiations and the discounts have been agreed upon more or less in line with those given to most modern retailers.

Considering that in case the rollout goes as planned Reliance will soon control about 1 per cent of retail outlets in the country, this is one chain suppliers cannot afford to miss having their products in.