Yes, it is profitable... But its not the success story in the scale it was imagined to be..coming from the biggest company in India..
But the reality is, Reliance Retail is way way bigger than that. Do you know the iStore (Apple products) is operated by Reliance Retail? How about Marks & Spencers? Hamleys? Brooks Brothers? Diesel? Timberland? Payless Shoe Store? Quiksilver? Steve Madden? Roxy? Kenneth Cole? Pink? Asics? There's a growing list of over 35 top brands from overseas that are operated by Reliance Retail! In fact, while these stores don't contribute much in terms of Revenue, they contribute big to the profits of Reliance Retail.
Today Reliance Retail is the largest lease holder of A-grade commercial real estate in India - and pretty much any mall, any main street location would be having significant presence in Reliance Retail. Imagine the bargaining power they get from this sort of buying power!
Out of the retail points of presence of 3800 at last count, almost 300 stores are these high end brands - where Reliance makes a profit even if the store doesn't see a single customer in the entire year!! This has reached a point where anyone looking to enter India simply doesn't bother talking to any other player - and talks only to Reliance Retail. They have perfected the entire process, starting with documentation, acquisition of prime real estate, setting up interiors, logistics and delivery, plus staffing and operations. Every thing is streamlined so beautifully that someone looking to launch stores in India has no reason to talk to anyone else!
Even Jio - why do you think Reliance had the network ready but instead of going in for commercial launch, decided to do testing for over a year? Last year in September, CLSA came out with a report saying Jio can launch any day - and they waited for one year after that. The reason is simple - they wanted to perfect the customer experience. They wanted things to be streamlined. This has obviously cost them a lot of money in terms of delays, lost revenues, interest costs, etc, but they don't care. They know if they do a great job, the customers will come.
If you think Reliance doesn't get B2C, or Reliance doesn't get Customer Service, think again. These are the top brands in the world in terms of Customer Care - and it doesn't get much better than Apple as far as Customer Satisfaction is concerned.
Yes - in the past Reliance had legitimate complaints against it for Customer Service - but that has been addressed right from the top most levels all the way down.