Reliance Retail, the retail arm of oil-to-telecom behemoth Reliance Industries, doubled its revenue from the digital channel in the wake of the second wave of the pandemic.
The share of digital commerce and merchant partnerships, which contributed about 10 percent to the company’s revenue in the fourth quarter (Q4) of FY21, doubled to 20 percent in FY22, the company informed while reporting its results for quarter-ended June.
“Digital now accounts for about 20 percent of our overall sales as compared to under 5 percent in Q1 last year,” Dinesh Thapar, Group CFO, Reliance Retail, addressing a post-earnings briefing.
The company pushed its digital platforms such as hyperlocal grocery platform JioMart and fashion and lifestyle website Ajio, RelianceDigital.in as the second wave disrupted its offline operations, and footfalls fell to 46 percent of pre-COVID levels as compared to 90 percent in the Q4, FY21.
The digital push
Reliance Retail expanded JioMart in Q4, which is now present across 218 cities (for grocery), while the orders on the platform during the quarter were up 25 percent QoQ with high repeats.
“Ajio continued to scale new heights and traffic and monthly active users and traffic on the platform were up by four times YoY; while RelianceDigital.in witnessed its highest ever quarterly sales,” informed Thapar.
During the quarter, the company also stepped up its merchant (kirana partnerships) which are up by three times now. It is also building capabilities for faster onboarding of kiranas on its platform. Kiranas are vital to Reliance Retail’s ambition to scale up the hyperlocal platform JioMart.
The company also informed that it further extended hyperlocal capability for fashion on JioMart, now present across over 450 cities.
Outlining its plans for the quarter ahead, the company said it plans to scale up digital commerce while expanding the category play on JioMart, grow new commerce partnerships across businesses and geographies and complete JustDial’s acquisition, and initiate actions on business plans.
The long road to recovery
After facing significant disruptions in footfalls and sales in the first quarter of FY21 due to the nation-side lockdown, retail businesses across the country had witnessed recovery in the fourth quarter. However, with the second wave retailers are back to square on.
Reliance Retail reported Rs 962 net profit in the first quarter (Q1) of FY22, a jump of 123 percent year-on-year (YoY) as compared to Rs 431 crore reported in the corresponding period last year. Sequentially, however, the company reported a drop in its revenue and net profit. The company had reported Rs 2,247 crore net profit in the fourth quarter of FY21 and gross revenue of Rs 47,064 crore.
(Also read: Reliance Retail Q1 Results 2021 | Firm's net profit surges 123% YoY to Rs 962 crore)
The analysts now estimate a return to pre-COVID levels only by FY23.
“Following a miss on 1Q and tough macro, we cut our FY22E EBITDA estimates by 8 percent but retain forecasts for FY23 onwards on expect of normalisation,” Jefferies said in a note.Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.