Building Reliance

Dhirubhai was born on December 28, 1932, to Hirachand Govardhandas Ambani and
Jamunaben Hirachand Ambani. He was the middle of five children, three boys and two girls
(Refer Exhibit II for the Dhirubhai family tree). His father was a local school teacher in a
village called Chorwad in the Junagadh district of Gujarat. After his matriculation in 1949,
Dhirubhai left for Aden, (now in Yemen) at the young age of 17. His first job was to fill gas
and collect money at a Shell petrol station, earning Rs 300 a month. Within a few years, he
rose to the position of a sales manager (Refer Exhibit III for Chronology of Events) in the
same company.

After working for eight years in Aden, Dhirubhai decided to come back to India and start
something on his own. On December 31, 1958, he came back to Mumbai and started the
Reliance Commercial Corporation (RCC) with a borrowed capital of Rs.15,000.

RCC was mainly involved in exporting commodities like ginger, cardamom, pepper,
turmeric, and cashewnut. Using his connections in Aden, he exported a wide range of
commodities to Aden.

Aden, being a free port attracted lot of exports. In the mid 1960s, the Government of India
(GoI) introduced an export promotion scheme under which the earnings from the export of
rayon fabrics could be used for the import of nylon fiber.

If there was a very large margin of profit, why did they not take advantage of it?"1 When
the High Unit Value scheme ended in 1978, Dhirubhai focused his attention on the domestic
market. During this time, Reliance Textiles was not a very well known name in the domestic
market. His first priority was to establish the Vimal2 brand, under which Reliance Textiles
sold its fabrics in India. An advertising programme was launched to facilitate its entry into
the domestic market.

Dhirubhai knew that a strong brand image was crucial for winning the consumer's
confidence. To achieve this objective, Reliance tried to emphasize the superior quality of its
fabric in all its advertisements.

Besides this, Dhirubhai also took steps to develop an efficient distribution system
for Vimal as he found that the existing marketing channels were inadequate and inefficient.

However, things were not that easy. When Reliance entered the domestic market, it faced
lot of resistance from the traditional cloth merchants, as their loyalties lay with the older
mills. Confronted with this situation, Dhirubhai decided to move away from the traditional
wholesale trade and open his showrooms to tap new markets.
He appointed several agents from non-textile backgrounds for the same. Dhirubhai adopted
the concept of company stores from its main competitor, Bombay Dyeing (Refer Exhibit IV),
and pursued it on a grand scale. Dhirubhai toured the entire country intensively, offering