Reliance Retail Acquires Urban Ladder

Case Code: CLBS168 Case Length: 3 Pages Period: - Pub Date: 2021 Teaching Note: Available

Price: Rs.150 Organization: - Industry: - Countries: India Themes: Business Level Strategies, Diversification, Diversification Strategy, E-commerce

Abstract

Reliance Retail Ventures Limited (Reliance Retail), a subsidiary of leading Indian conglomerate Reliance Industries Limited (RIL), has been on an acquisition spree with the objective of gaining a significant market share in the Indian retail segment, including both the online and offline segments. In November 2020, Reliance Retail acquired a stake in a leading online furniture start-up Urban Ladder Home Decor Solutions Private Limited (Urban Ladder) for Rs. 1,821.20 million.

This was the fourth acquisition by Reliance Retail during the financial year 2020-21. The present case study provides scope to discuss the different acquisitions made by Reliance Retail and discusses how these acquisitions could help the company in gaining significant market share in the Indian retail market competing against Amazon.com Inc, Flipkart India Private Limited, and other retail players. The case study can be discussed in terms of business strategy and the diversification strategy followed by the company. It can also be used to discuss brand recall value from the perspective of Urban Ladder.

Issues

• Business Strategy
• Levels of Business Strategy
• Diversification Strategy.

Introduction

In November, 2020, Reliance Retail Ventures Limited (Reliance Retail), a subsidiary of India's leading conglomerate Reliance Industries Limited (RIL), acquired a 96% stake in furniture and decor retailer Urban Ladder Home Decor Solutions Private Limited (Urban Ladder), based in Bengaluru, South India, for Rs. 1,821.20 million. It also entered into an agreement with the company under which it would invest an additional Rs. 750 million by December 2023.

Urban Ladder, an online home furnishings and decor solutions providing start-up, was founded in the year 2012. The acquisition of Urban Ladder marked the fourth major investment by Reliance Retail during the financial year 2020-21. Reliance Retail acquired leading retailer Future Group and took a majority stake in digital pharmacy startup Netmeds and a 15% stake in online retailer Zivame. The acquisition was in tandem with Reliance Retail’s plan to expand its base by offering diversified products and services, both online and offline, and gain a major share in the Indian retail segment while also expanding its base in the e-commerce business in India.

Keywords

Reliance Retail; Reliance Industries Limited; Urban Ladder; Future Group; Netmeds; Zivame; Retail distribution channel; Kannan Departmental Store; Business strategy; Levels of business strategy; Diversification strategy; online retail furniture market; Pepperfry; IKEA

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