Almost two decades after it entered India's wholesale market, German firm METRO AG's arm Metro Cash and Carry has been acquired by Mukesh Ambani's Reliance Industries. The next step forward for Reliance may be to merge METRO's operations into its wholesale business instead of a retail chain according to analysts said.
The new acquisition can help Reliance Retail strengthen its network of kirana stores and suppliers in the B2B sector, since it was Cash and Carry's strength in the country. Reliance Retail is already active in the space through JioMart, which is a wholesale supplier for small shops and grocers. JioMart has 52 wholesale stores as part of 'Reliance Market', and with the addition of METRO's outlets, this number will rise to 83.
Apart from this, METRO's non-kirana clients across sectors including hospitality and eateries, will widen horizons for Reliance. The acquisition has allowed RIL to bring METRO's base of three million customers, of which a million are frequent customers.
Reliance Retail can stock up its own products at METRO and sell METRO's goods through JioMart.
The deal has also been beneficial for Reliance, since it reportedly paid 2.5 times less than what METRO was trying to squeeze out of the sale.
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