Can Reliance's Azorte give stiff competition to Zara, H&M, Mango?

Spearheaded by Isha Ambani, the venture seems to be an attempt to consolidate the brand’s consumer retail offering.

Reliance Retail has launched a premium fashion and lifestyle brand, called ‘Azorte’. It is a consolidation of brands from Reliance’s stables, and has both an offline store at Bengaluru as well as an online presence on azorte.ajio.com. The store stocks products such as clothing, personal care products, home decor, jewellery, and footwear. Most of the brands stocked at Azorte are Reliance's in-house brands.

Reliance Retail also caters to consumers online through its website, ajio.com. With JioMart, it offers a hyperlocal retail solution that makes full use of Reliance Retail’s wide range of grocery stores and supply chain infrastructure.

According to a CNBC-TV18 report, the company is just getting started with Azorte. The report quotes Akhilesh Prasad, CEO, fashion and lifestyle – Reliance Retail, as saying that the next store is all set to open in Hyderabad.

Prasad adds that within the next nine months, the company is looking at opening 35-40 new stores in 16 different locations – metro cities, mini metro cities and state capitals – across the country.

A press release quotes Prasad as saying that the mid-premium fashion segment is one of the fastest-growing consumer segments, as millennials and Gen Z are increasingly demanding the latest international and contemporary styles.

A mid-premium fashion brand is one that still has aspirational value, while continuing to be affordable. Other examples of mid-premium fashion brands include H&M, Mango, Vero Moda, etc.

This is not Reliance Retail’s first foray into different value sets of products. According to its website, Reliance has a portfolio of fashion and lifestyle brands that spans across value, mid, premium and luxury segments. The company operates brands such as Trends, Trends Footwear, Avantra by Trends, Reliance Jewels, and more.

In addition to this, Reliance also operates a portfolio of international brands, such as Armani, Diesel, Burberry, Marks & Spencer, Superdry, and others in India. The website also mentions that Reliance Retail reported a turnover of close to Rs 2 lakh crore for the financial year 2020-21. Reliance Retail operates 15,196 stores across 7,000 cities.

Devangshu Dutta, chief executive at Third Eyesight, points out that a part of Reliance’s strategy is to be larger than life – to be as big as possible and present in as many segments as possible.

He points out that Reliance already has a presence in the high-end retail brand market, with its international brands portfolio. Now, it is targeting the segment below that; which is growing, as the segment of people with disposable incomes increases.

“If you look at the brands that take up space on the ground floor of shopping malls – they are mostly international and luxury brands. India should have more homegrown luxury brands to compete with. We have a large young population and a strong manufacturing base. The number of brands we have, in comparison to these two factors, is actually minuscule,” Dutta adds.

Samit Sinha, founder and managing partner, Alchemist Brand Consulting, explains that one of the frontiers that Reliance has been unable to conquer, is retail. That is why it is looking to aggressively expand.

“Reliance Retail wants to have a comprehensive presence across categories and segments – both online and offline, with Azorte. It makes sense that Reliance Retail is creating a space for its brand, since e-commerce retailers, like Amazon, have their own brands,” says Sinha.

Dutta says that another aspect of competition that exists between international brands and homegrown brands – like the ones Reliance is stocking at Azorte – is aspiration.

“Brands like Zara have been around since 1975. Even before its India launch, Zara used to have many visitors from India on its online website. The aspirational aspect certainly exists.”

Reliance Retail has aggressive expansion plans for Azorte. Dutta says that a mix of both online and offline is important for brand building. “Reliance has the resources to create a footprint for the brand, and that’s half of the battle won.”

Sinha agrees that offline presence for the brand – especially in the mid-premium luxury segment, is important in building up ‘brand Azorte’ in the minds of consumers, since brand building is not as strong when the brand just has an online presence.

Dutta argues that an offline presence is as important as an online one, since most consumers may experience the brand offline, even though they may browse its products online or on various apps.