Future Retail: K Is For Kirana
Kishore Biyani, Founder and Group CEO of Future Group is well known for disrupting the retail landscape in the country. His Big Bazaar chain of hypermarkets have particularly led this disruption and given the Indian retail industry one of its biggest success stories.
In the last two decades, Future Group has acquired its one-time biggest competitors such as Hypercity, Nilgiris, Heritage, etc. One of the reasons for the acquisition spree was the inability of the competitors to keep pace with Biyani’s vision.
Biyani is someone who epitomises “less words, more action” and this philosophy has seen his retail chains grow across 250 Indian cities with an annual footfall of 500 million over the years. He started his first venture Pantaloons in 1997. However, Biyani had to cut it short owing to financial constraints. In 2012, he sold Pantaloons, his first successful retail chain, to Aditya Birla Nuvo to defray some of the Rs 5,800-crore debt the parent company had. Since then, Future Retail has changed beyond recognition through acquisitions, mergers and restructuring.
While hordes of marketing experts and brand owners may consider ‘digital’ as the Holy Grail and future of retail, Biyani does not seem convinced. In an interview published earlier this year, Biyani expressed his disbelief for pure online retail and strongly argued for “online to offline’ approach, which, according to him, is the perfect model to suit the Indian consumer behaviour. “In India, retail is dominated by the physical stores format. Why are people making such a hue and cry about online versus offline?” Biyani told BW Businessworld while discussing the hype around online competition.
A strong believer in the ‘Indianness’ of brands, Biyani has carefully woven Future Group’s retail experience around this philosophy. Be it launching affordable fashion for Indian consumers or creating an experience of Indian bazaar, Biyani’s world view has ‘Indianness’ at its centre.
For Biyani, “the next round of growth will come from small stores”. This also explains his big thrust on ramping up its network in tier 2 and tier 3 towns. Underlining the importance of moving into the heart of India and consolidating Future Group’s presence, Biyani has gone on record to say, “India doesn’t have a convenience store, India doesn’t have a neighbourhood store. India needs a lot of models.”
It must be mentioned that in December 2010, Biyani took the first steps towards making ownership of the Future Group companies more transparent. He transferred his family holdings in the many group companies to a single holding entity called Future Corporate Resources (FCRL). For FY16, FCRL reported its net worth as Rs 2,446.30 crore, in filings with the Registrar of Companies.
While many multinational retail outlets are making a beeline to India, Biyani remains unfazed and believes the MNCs don’t understand India well. At the same time, he does not mind if foreign players add more value to the category and help it grow
“India is such a diverse country. Every location is different. Every catchment area is different. Consumers react very differently in different places. With more and more players entering, they can be change agents who bring a consumption-driven economy into the country. More players coming in can create and increase demand. But can the Indian economy be genetically changed into one that is spending-oriented? It is going to be a slow process,” Biyani stated in an interview with Wharton University publication way back in 2007.
Biyani may be averse to the idea of online only retail, but he is a big believer in the power of technology and knows how to use it to his advantage.
Future Group has tied up with online search engine Google to identify the catchment area for its new stores, and aid its hyper-local recruitment. It has also tied up with social media platform Facebook for Retail 3.0, to drive social engagement.
