Future of Retailing | Future of Retail | Future For Retail
As per Big bazaar wikipedia, Big Bazaar was India’s largest retailer but; about a year ago things started to get very ugly. What went wrong with future retail? Why did Kishore Biyani decide to sell off his retail arm to Reliance? Let see the Big Bazaar history and the present, to understand the Big Bazaar owner / Future group owner and Future group subsidiaries journey. So that we can understand the Future of Retail store & Future of Retailing for all formats of Future Group.
History and Future of Retail store Big Bazaar
Vision of Future group owner and Future group subsidiaries journey will lead to Future of Retailing for all formats of Future Group.
Kishore Biyani Big Bazaar owner and Future group owner was born in august of 1961. He comes from a family that was involved in business since the days of his grandfather. Kishore Biyani ( Present Big Bazaar owner ) began working in the family fabric trading business, Bansi Silk Mills. But became frustrated with the conservative approach adopted by his family. As a aspirant he left his family business to continue his dreams and ventured out to start up his own goals. That’s how the future of retail stores and future group retailing journey started.
Mr Kishore Biyani’s first venture for preperation of future for retail business in India.
In 1987 he launched menz wear; a garment manufacturing business and, after getting deep expertise, subsequently 10 years later he opened up his first fashion brand store – Pantaloons in Calcutta.The brand was successful and soon expanded into retail using a franchisee model. That was the first milestone in Big Bazaar history; and that was the baby step towards future of retailing in India.
First Big Bazaar store in 2001 was the key factor for future of retailing for the group.
Owner of future retail opened first Big Bazaar store in 2001; that’s the time when they have observerd the future of retail in India.
And Big Bazaar owner Mr Kishore Biyani was a big dreamer; soon later he formed two companies, Future Retail Limited and Future Lifestyle Limited and subsequently opened up thousands of retail stores throughout the country.
Mr Biyani had always wanted to bring reforms into retail. Earlier consumer buying behavior of the middle class section of the indian community always had a perception that; shopping in large hyper marts like Big Bazaar Stores and retail chains was reserved only for the rich and elite,To change this attitude his team heavily marketed its brands on newspapers televisions radio and other forms of media and the word spread quickly; Future Retail gave tough competition to every mom and pops store and local supermarkets.You can think of who doesn’t like large discounts like 50% off; buy get one free and so on Big Bazaar became India’s largest retail giant.
As per Big Bazaar wiki, Big Bazaar owner – Mr Kishore Biyani was a retail king with the vision that can pre judge the Future of Retailing in India and growth potential in this sector.
Mr. Biyani became the king of retail and was compared to Sam Walton the founder of Walmart America’s largest retail chain. Future retail group and its subsidaries was booming at that time.
Future group subsidiaries shares and future retail share price was also booming.
As Big Bazar attracted customers using discounts coupons and also rewarded customers that made repeated purchases fast forward to 2010s everything was doing fine until the emergence of digital revolution in India by 2014 e-commerce retailers such as Flipkart and Amazon. They took the Indian retail business to the storm. Online shopping became a huge trend.
Kshore Biyani Future Group CEO Net Worth and Ambition
The net worth of Big Bazaar owner and Future group CEO Kishore Biyani was US$1.78 billion in year 2019; as per wikipedia. Kishore Biyani grew very ambitious and decided to reach even further heights; he did this by forming even more subsidiaries such as; fashion and apparel brands like fbb or fashion big bazaar; Brand factory and Central mall the group also opened up a dozens of FMCG brands such as Tasty Treat; Fresh N’ Pure, Clean Mate, Golden Harvest, Karmiq and so on.
Future Retail Subsidiaries acquisitions and Impact on Future group subsidiaries
The acquisitions of retail chains by Future Retail and acquisitions of other business models by Future group subsidiaries like; Easy day stores from Airtel for 750 crores; Nilgiris for 300 crores and so on seeing the future for retail business in India, Future also partnered with Generally to form a joint venture to start an insurance business; Staples, Sketchers; Celio are some of the other joint ventures of Future groups, which was intiated by the owner and CEO of Future Group Mr Kishore Biyani.
When company was well diversified seeing the future of retailing in India, why it is in bad shape today?
The company was well diversified however, they borrowed debt to expand its business, instead of traditional method where you make profit first and then use this cash to expand its business and buy other smaller businesses. Mr Biyani wanted a very speedy expansion and this fast growth was not sustainable for a retail business unlike a startup like Flipkart or Zomato his business just wouldn’t survive with so much cash burn. Management’s obsession with growth over sustainability caused many problems for his businesses. Future group faced liquidity crisis and had to sell off its controlling stake in Pantaloons to Aditya Birla Group.
By 2018 big bazaar’s central mall and his other ventures started to decline and his investments failed to deliver expected rate of return.Biyani pledged around 94% of his shares as a collateral in hopes to buy new assets; and to pay off creditors. About a year passed and everything started to fall apart. All of future retails groups began to fail and the company started to report heavy losses sequentially one quarter after the other. Payments to suppliers were often defaulted; and salaries to employees would miss their deadlines. From that point of time future of retail stores and retail business was looking dark; by mid 2019 the company’s debts was 12,778 crores; and Kishore biyani’s net worth fell from US $1.7 billion to mere $300 million dollars following the crash of his listed companies.
Future for retail pushed the competitors in retail arena.
Competitors like D-mart, Reliance Retail etc swiftly overtook the market. Competitors capture the market share of Big Bazaar. The crisis that followed blew a hole in future groups portfolio. Bankers then had queued up at his offices started to call in their loans; mutual funds that had invested in his companies buckled up under redemption pressures and decided to get out sources of foreign capital dried, his market capitalization plunged two thirds in a matter of six months.
Leading e-tailers like Flipkart, Amazon, Snap Deal, Jabong etc, also pulled up the market share. Which lead to loss in revenue. Future group’s higher managment were thinking about the future of retailing in India; but less focus was there for oline business.
The ongoing lockdowns due to pandemic was the final nail in the coffin for future retail and big bazaar due to the closure of malls and stores throughout the country during the lockdown,the business made over 7000 crores of loss in just a span of 4 months. There was no way the company could have survived losing such an amount. The problem was rent doesn’t stop, interest on debt does not stop. So this my friends was an end of an era for the Indian giant. And the future of retail store like Big Bazzar was on the verge of end.
Entry of leading retail into Big Bazaar online Shopping home delivery model.
As we have seen debt when used responsibly is a very powerful and important source of funding for several businesses alike. However as a lesson Big Bazaar’s story shows us that debt and inorganic growth without sustainability can be quite fatal; an obsession of fast expansion, acquisition of several retail assets; a chase to build its own brands and in-house manufacturing capabilities have left a company overburdened with debt. And also caused trading downgrades across the group’s listed entities. About the future not a lot is known, but we’ll have to see what reliance does with remnants of future group; it is said that over 25 000 jobs will be lost if this deal doesn’t pass through.
Even though its going through the very rough phase. There is the battle between Reliance and Amazon to acquire assets of future retail. Still in all odds, the managment of Future retail is ready to fight with the situation. During pandemic period they launched the online portal shop.bigbazaar.com and the online shopping app.
Buy from Big Bazaar online and gets delivery in 2 hours from near Big Bazaar
Again the baby steps to bounce back! If you ask the question can I shop online from big bazaar ? The answer is “Yes”. You can order from Big Bazaar online from shop at big bazaar online.com and order for Big Bazaar online shopping grocery, fashion, and more and get the door step delivery in 2 hours. Big Bazaar online grocery delivery team will deliver the order in just 2 hours. I myself tried it. Big Bazaar online fashion is also available in the latest shop at big bazaar online app.
No other major online player is capable of delivering the order in 2hours time. Am sure the group will bounce back, its just a matter of time. What do you guys think about this whole situation? Please comment down below to let me know your thoughts on future of retail store & future of retailing for all formats of Future Group.