NEW DELHI: Indian industrial giant Reliance, owned by billionaire Mukesh Ambani, is reviving a local cola brand with plans to use its vast retail network, slash prices and tap nationalist sentiment to challenge United States beverage giants PepsiCo and Coca-Cola in a key market.
Reliance launched revamped Campa drinks, sugary sodas popular in India in the 1970s and 1980s before disappearing from shelves as the United States giants expanded rapidly in a liberalising economy.
At first glance, Ambani will find it tough to loosen Pepsi’s and Coca-Cola’s stranglehold of a market worth $4.6 billion and set to grow 5 per cent a year until 2027. Other well-known tycoons have tried to go toe-to-toe with the drink giants but failed, most notably Richard Branson with his Virgin Cola.
But Asia’s richest man, who famously disrupted the Indian telecoms market seven years ago with cut-throat pricing to make Reliance the leading player in that industry, is applying some of that same strategy in his soft drinks venture.
Pepsi and Coca-Cola unused to challenge
“Pepsi and Coca-Cola are unused to a countrywide challenge, and Reliance has the financial muscle and reach to challenge them with a local Indian brand with high nostalgic value,” said Amulya Pandit, the consultant at Euromonitor International.
A man with direct knowledge of Reliance’s plan said it goals to open some factories of its own and as joint ventures to make Campa and take the soda to hotels, restaurants, and in-flight sales. Production of Campa currently outsourced after its 2.7 million dollars acquisition of the brand last year.
The company is heavily discounting in-store prices. A two-liter Campa-Cola bottle is priced at 49 Indian rupees (60 US cents) in stores, a nearly 50% discount on its label price, and around a third lower than 2.25-litre Pepsi and Coke variants, a Reuters check showed. The smallest bottles of Campa Cola and Coke cost 10 rupees, while Pepsi starts at 12 rupees.
“The price would be disruptive across,” said the man. Reliance is planning an advertising spree during the upcoming popular Indian Premier League (IPL) cricket tournament. It is in talks with at least three teams to make
Campa their refreshment partner.
The person didn’t want to be identified as the strategy is confidential. Reliance didn’t respond to a request for comment, while Pepsi said it doesn’t comment on competition as a policy.
