From Shein relaunch to 30-min groceries: Inside Reliance Retail's hyperlocal pivot amid slowing expansion

Reliance Retail closed FY25 with a shift in strategy, pulling back from rapid expansion to focus on portfolio rationalisation and core operational efficiencies. Hyperlocal deliveries emerged as a key highlight during the March quarter, registering a 2.4x sequential growth across 4,000 pin codes, signalling a new priority in strengthening digital and quick commerce capabilities, as per a report by Elara Securities.

Reliance Retail’s revenue from operations rose 6.6% year-on-year in FY25, significantly lower than the 25% CAGR it reported between FY21 and FY24. While the first nine months of the fiscal were subdued, Q4 revenue growth stood out at 16.3% year-on-year, driven by strong performance in grocery and consumer electronics. Same-store sales growth during the year was 4.4%.

“While Reliance Retail remains the elephant-in-the-house, sustainability of growth hinges on the scale of competition from online grocery platforms, expansion by modern trade firms, and execution in its digital initiatives such as JioMart’s 30-minute delivery and the Shein relaunch,” says Karan Taurani, senior vice president at Elara Securities.

Offline grocery led the comeback, aided by traction in general merchandise and premium products, while consumer electronics growth was supported by higher conversion rates and a 26% year-on-year increase in average order value. However, Taurani pointed out that sustaining this momentum will depend on how Reliance Retail navigates rising competition, particularly in the quick commerce and online electronics segments.

One of the most notable developments during the quarter was the surge in hyperlocal deliveries under JioMart. The company now offers deliveries under 30 minutes as well as scheduled deliveries across 2,100 stores, covering around 25–30% of its grocery outlets. The seller base grew 22% year-on-year and product selection expanded by 10%, while app visits increased 37% compared to last year, according to the report. However, JioMart faces stiff competition from incumbents such as Blinkit, Instamart, and Zepto, along with potential new entrants.

Alongside this, Reliance Retail relaunched fast fashion brand Shein in India with 12,000 live options, and expanded AJIO’s same-day and next-day delivery services to 26 cities to compete more closely with players like Myntra. Its consumer brands business also continued to gain ground, crossing Rs 114 billion in sales, with Campa Cola growing its share in the entry-level soft drinks category.

Despite the recovery in Q4, store expansion took a clear backseat. Net new store additions fell sharply to 504 in FY25, compared to 2,485 in FY22 and 2,844 in FY23. The store closure rate surged to 81% in FY25, up from 57% a year earlier, showing a deliberate move towards portfolio rationalisation. Diverse segments such as FMCG, grocery, beauty and personal care, and fast fashion have increasingly shifted online, and the company has been phasing out loss-making or underperforming outlets.

“The sharp moderation in net store additions indicates a move away from scale-focused expansion to strengthening profitability through core portfolio optimisation,” says Taurani . He adds that while early expansion prioritised scale, two years of rationalisation could fortify Reliance Retail’s operational base in the long run.

Going forward, analysts will be watching closely for signs of broader demand recovery, especially following recent tax reliefs announced in the Union Budget, which may offer near-term support. While Reliance Retail’s digital revenue contribution has remained steady at 17–18% over the last eight quarters, execution in the digital segment remains critical to defending market share against MNCs and domestic rivals.

EBITDA margins were largely stable both sequentially and year-on-year at 8.3% in Q4. Profit after tax rose 29.1% year-on-year to Rs 35 billion for the quarter, driven by operating leverage despite a subdued topline for most of the year.