When Kishore Biyani, Group CEO, Future Group, got into garment manufacturing, it was because his company was already a fabric supplier to the garment industry. This led him to venture into retail, since many stores were not keen on keeping the company's products. While the company started off with franchises, it quickly realised this was not the best way of doing business; hence came the company's own retail stores that have today become the largest hypermarket chain in India—Big Bazaar.
In an exclusive interview with VCCircle at the recently concluded VCCircle Consumer & Retail Investment Summit 2014, Biyani talks about his entrepreneurial journey spanning over 25 years.
"When we started off, I thought retail is a simple business of buying and selling, and there was not much technology back then; it has been a journey of many learnings. We always had queues outside our Big Bazaar stores, and that was a good feeling. It encouraged us to ask why we can't capture everything of the customer's shopping basket. This turned out to be our first mistake," said Biyani.
Besides food, fashion and home, which were the forte of the company, it also went into financial services, gyms, etc. "We thought we were invincible and made many mistakes in that
time frame. I believe it is the same stage e-commerce companies in the country are currently in," he added.
The market cap was good and the company kept on growing (to nearly 200 stores as of now). But at the same time Biyani also realised that it was not the only way to grow and rather the company had to make its balance sheet stronger, since there were a lot of other players whose balance sheet were very strong. "For the same, we re-organised ourselves to three primary businesses and decided that we will concentrate on two businesses majorly that is food and fashion, while the third home will be on the periphery of the business," said Biyani.
The company today has three businesses with distinct balance sheets that include Future Retail which comprises the hypermarket business; a fashion enterprise called Future Lifestyle Fashion; and Future Consumer Enterprise that is building the entire food and FMCG business.
Over the course of the interview, Biyani also talks about how he believes in the 'investment model' of investing in people, entrepreneurs and brands, and explains that while there are a lot of entrepreneurs who can create, it is equally important for them to learn to 'control' what they create.
Biyani explains why there was no emotion when the company sold off the Pantaloons brand. "I made a big multi-starrer Bollywood film called Na Tum Jaano Na Hum, but it did not work at the box office. That day I made my mantra 'don't get attached to whatever you create', which I follow to date."
He also reveals the logic behind hiring a chief belief officer and the role he plays at the company, and explains why he is not threatened by the e-commerce boom.
"If you look at the retail as a business, it's ultimately a delivery model of products and goods to a consumer. And today there is a new way of delivering the same and that is through technology. I personally believe that technology does only two things and that is reducing space and time. While currently it has captured the imagination of many people, since people are fatigued with the physical way, my belief is that physical and digital will converge. Because digital players are not building their own brands; they are ultimately selling the brands created by us," said Biyani.
Finally, he also talks about the assisted e-commerce model, Omni-channel strategy of the company, his next innings and his vision for 2020. Watch the video for more.