How Kishore Biyani is remodelling Future Group's portfolio to take on digital-savvy rivals
Seven
years after India's Raja of Retail penned his entrepreneurial journey
— and in the process convinced his elder daughter Ashni that he
wasn't writing it, as she feared, "too soon" — Kishore
Biyani's "ideal organization" is still a work in progress.
By 2007 — 16 years after he opened his first store to sell apparel,
Pantaloons — Biyani had done enough in the retail space, and more,
to earn the Raja handle.
His
Future Group was selling food and groceries, apparel, footwear,
furniture, consumer electronics, home products, books, medicines,
mobiles et al through multiple formats like supermarkets,
hypermarkets, malls, specialty stores — and, yes, an online portal
too.
Forays
into the broader consumption space — restaurants, entertainment
centres and even consumer finance and insurance — were all prongs
of the group that hit revenues of just over Rs 5,000 crore in the
year ended June 2008.
Today, Biyani looks back at the no-holds-barred growth phase with mixed emotions. "Success is very heady. [But] difficult times humble you."
Those difficult times came courtesy of the global financial crisis of 2008.
The Future Group found itself saddled with a debt of over Rs 4,000 crore even as liquidity dried up and consumers tightened their purse strings.
The debt kept rising, peaking at Rs 7,800 crore in 2012. The post-2008 phase was of gritty survival, culminating in the sale of Pantaloon to the AV Birla group for Rs 1,600 crore in 2012; and a series of selloff deals are still in the pipeline.
Over the next couple of years, rationalizing stores became the buzzword and, as things stand today, Reliance Retail is the largest organized retailer — the newly crowned 'Raja', if you will — and e-commerce giants Amazon, Flipkart, Snapdeal et al have captured the mind space of consumers and the moneybags of investors.
Yesterday's Raja of Retail, now 53, seemingly with a smaller fire in the belly, is watching the new kids on the block, happy that he wrote his tome at the right time — after all, wasn't it Biyani himself who told an investor: "Retail is like riding a bicycle uphill, if you stop pedaling you will slide down?"
Biyani hasn't stopped pedalling. The only difference is that he now wants to ride a faster, larger cycle, a road bike perhaps, that traverses terrains beyond organized retailing and bunny-hops onto the track of food — processing it, marketing it and branding it.
At the same time he wants to throw his hat once again in the ring in which he was one of the first to do so: e-commerce. Don't forget he had set up Futurebazaar.com in 2007 — the same year Flipkart was born.
"He [Biyani] is in the most exciting phase of his career. I have never seen him so engaged and committed," says Shailesh Haribhakti, managing partner, Haribhakti & Co, an independent director of Future Lifestyle. On the board, Haribhakti has known Biyani for over two decades now.Food for Thought
Last month, prime minister Narendra Modi inaugurated a 110-acre food park in Tumkur in Karnataka, Biyani's first iron in the fire of foodprocessing.
He plans to set up two more — one in Madhya Pradesh and West Bengal each — with the aim of fuelling the foods business into a Rs 20,000-crore behemoth by 2020, from just Rs 1,000 crore currently.
The processed and packaged foods business in India is a gargantuan pie, at Rs 40,000 crore; however, it is fragmented and dominated by unorganized players. In 2012-13, Indian households are estimated to have spent Rs 11,00,000 crore on food.
Today, Biyani looks back at the no-holds-barred growth phase with mixed emotions. "Success is very heady. [But] difficult times humble you."
Those difficult times came courtesy of the global financial crisis of 2008.
The Future Group found itself saddled with a debt of over Rs 4,000 crore even as liquidity dried up and consumers tightened their purse strings.
The debt kept rising, peaking at Rs 7,800 crore in 2012. The post-2008 phase was of gritty survival, culminating in the sale of Pantaloon to the AV Birla group for Rs 1,600 crore in 2012; and a series of selloff deals are still in the pipeline.
Over the next couple of years, rationalizing stores became the buzzword and, as things stand today, Reliance Retail is the largest organized retailer — the newly crowned 'Raja', if you will — and e-commerce giants Amazon, Flipkart, Snapdeal et al have captured the mind space of consumers and the moneybags of investors.
Yesterday's Raja of Retail, now 53, seemingly with a smaller fire in the belly, is watching the new kids on the block, happy that he wrote his tome at the right time — after all, wasn't it Biyani himself who told an investor: "Retail is like riding a bicycle uphill, if you stop pedaling you will slide down?"
Biyani hasn't stopped pedalling. The only difference is that he now wants to ride a faster, larger cycle, a road bike perhaps, that traverses terrains beyond organized retailing and bunny-hops onto the track of food — processing it, marketing it and branding it.
At the same time he wants to throw his hat once again in the ring in which he was one of the first to do so: e-commerce. Don't forget he had set up Futurebazaar.com in 2007 — the same year Flipkart was born.
"He [Biyani] is in the most exciting phase of his career. I have never seen him so engaged and committed," says Shailesh Haribhakti, managing partner, Haribhakti & Co, an independent director of Future Lifestyle. On the board, Haribhakti has known Biyani for over two decades now.Food for Thought
Last month, prime minister Narendra Modi inaugurated a 110-acre food park in Tumkur in Karnataka, Biyani's first iron in the fire of foodprocessing.
He plans to set up two more — one in Madhya Pradesh and West Bengal each — with the aim of fuelling the foods business into a Rs 20,000-crore behemoth by 2020, from just Rs 1,000 crore currently.
The processed and packaged foods business in India is a gargantuan pie, at Rs 40,000 crore; however, it is fragmented and dominated by unorganized players. In 2012-13, Indian households are estimated to have spent Rs 11,00,000 crore on food.
By
Malini Goyal, ET 26 Oct, 2014
Kishore
Biyani talks
about his approach to business, growth, a downturn and on the future
of retailing. Excerpts:
On technology and consumers:
In the physical world, I could observe and pick up signals of what may work and what may not. You can't do that in the digital world. You need to use algorithms and understand data analytics today.
On his tech handicap:
I had to apply my mind to understand technology; in the last 7-8 years, I have been calling budding entrepreneurs home to get their sense of technology.
On why Futurebazaar.com failed:
We came too early in the game. We were ahead of the times
On the future of retailing:
I see store sizes shrinking and physical stores doing a lot more to support digital presence. By 2020, I expect some stores to be so data-enabled that the moment you enter our store our staff will know a whole lot about you.
On what the downturn taught him:
Success can be very heady. It gives you a high. I feel humbled.
On the shift in his approach to business:
Any creation has to be tempered with control. Art and science have to go hand in hand when running a business. Don't get attached. Attachment can be blinding. Sweating existing assets is important. I also learnt that balance sheets, investors and the stock market are important.
On competition in retailing:
15 years back, we were called leaders. I am surprised we could sustain it for so long. I don't see that changing significantly until 2020.
On technology and consumers:
In the physical world, I could observe and pick up signals of what may work and what may not. You can't do that in the digital world. You need to use algorithms and understand data analytics today.
On his tech handicap:
I had to apply my mind to understand technology; in the last 7-8 years, I have been calling budding entrepreneurs home to get their sense of technology.
On why Futurebazaar.com failed:
We came too early in the game. We were ahead of the times
On the future of retailing:
I see store sizes shrinking and physical stores doing a lot more to support digital presence. By 2020, I expect some stores to be so data-enabled that the moment you enter our store our staff will know a whole lot about you.
On what the downturn taught him:
Success can be very heady. It gives you a high. I feel humbled.
On the shift in his approach to business:
Any creation has to be tempered with control. Art and science have to go hand in hand when running a business. Don't get attached. Attachment can be blinding. Sweating existing assets is important. I also learnt that balance sheets, investors and the stock market are important.
On competition in retailing:
15 years back, we were called leaders. I am surprised we could sustain it for so long. I don't see that changing significantly until 2020.
ET1410126
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