Kishore Biyani, founder & CEO of large Indian retailer Future Group, has a plan. He wants to crush online competition with a carefully thought-out strategy that includes several if-you-can’t-beat-them-join-them moves. Yet he continues to ask, “Who’s afraid of e-commerce?”
Biyani who owns several well-recognized brands like supermarket chain, Big Bazaar, premium food chain, Foodhall, convenience store chain, Nilgiri’s, and electronics chain, eZone, detailed his next moves to Forbes. In a counter to online grocery deliveries’ growing business, though Biyani doesn't say it like that, Big Bazaar will launch an app that will offer a pizza delivery-type grocery supply service that will reach daily essentials and produce to customers’ doorsteps within 30 mins in the country’s financial capital, Mumbai (to start with). “We have a store located every 2-3 kilometers and we’ll launch the service in the coming weeks,” Biyani said in an interview.
Two things are worrying traditional retailers like Biyani. Online retailers are commanding several multiples of offline retailers’ valuation. More importantly, online retail’s market share is slowly creeping up to equal the share of offline retailers.
In the offline retail sector, Biyani’s $2.4 billion-in-revenues Future Group is second only to Reliance Retail owned by billionaire and India's richest man, Mukesh Ambani. The group which operates brick&mortar stores in 244 Indian cities, made news recently with its merger with Bharti Airtel, owned by the parent of India’s telecom giant, Bharti Airtel. Bharti which earlier broke off its India partnership with Walmart, ran the Easyday brand of stores.
Biyani said consolidation is a logical step in the retail sector and the merged entity’s near-600 stores will grow to 2,000 stores in the next few years and bring cost and supply chain efficiencies through scale. (Earlier this month, in a similar move, billionaire Kumar Mangalam Birla merged his two fashion retail formats Pantaloon Fashions - acquired from Biyani - and Madura Garments.)
Biyani is not stopping there. He is taking the battle further into e-commerce territory by countering online discount offers with his own ‘price match’ offer. “If we are more expensive than online retailers, the difference will directly get credited to customers’ wallets,” said Biyani who said the price match offer will go live in a few weeks.
Biyani has been an unconventional player in Indian retail, setting the agenda for rivals with steps such as carefully-curated disorder in the supermarket aisles to recreate the chaos of India’s ubiquitous street markets.
Biyani prophecies that pure play online in segments like grocery will not work in India, just as they have not been wildly successful in the West. “Omni channel retailers like us will be the future as we have the products, brands, the supply chain” said Biyani who said multi-channel retailers accounted for over half the revenues in global e-commerce.
Like online retailers, Future Group is heavily relying on data science and data analytics to get its 28 million loyalty club customers to increase their spend to at least 100,000 rupees ($1,600) a year at his stores.
