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May, 01 2007

Reliance plans 400 small format outlets in semi urban markets

Reliance Retail is looking at opening 400 small formats consumer durable stores under the 'Reliance Digital' brand in the rural and semi-urban markets.

This will be the second major durable retailing initiative in the domestic market after competitor Tata Group's Infiniti Retail-owned Croma, but the first that is focused on the small format stores targeting rural and semi-urban areas. Infiniti Retail, however, hopes to enter the semi-urban and rural markets only in the next two years.

With rural markets already contributing 60 per cent to the overall cathode ray tube (CRT) TVs market, there is a good potential for categories such as music systems and DVD players to grow there. These products will help the overall durables market to grow by an additional 5 to 10 per cent in the next two to three years. The overall durables segment in India is pegged at Rs 20,000 crore.

TCL has recently tied-up with Reliance Retail to sell TCL branded products in the rural market. TCL Holdings India is planning to sell 70 per cent of its targeted 6-lakh units in durables in the rural market this year. The company is setting up 50 franchisee-operated mini formats of exclusive 'TCL' branded outlets in semi-urban areas with a population of one lakh and above. 25 'TCL' branded outlets by June-end 2007 and the remaining 25 by March, 2008.

The rural market with a population of one lakh and above had contributed 26 per cent to Samsung's total durable sales last year

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