Category: Press Quotes

How acquisitions are churning growth in e-commerce

admin

April 7, 2015

Shipra Srivastava, IMAGES Retail
New Delhi, April 2015

Growing business internally can be time consuming and involves high-risk strategies to excel in a fast-moving business world. This is encouraging entrepreneurs to acquire an existing firm instead building their own from the scratch, as this way they can escape many of the hurdles involved in the process – from developing a new product and hiring the right people to building a sound customer base. Furthermore, this strategy offers entrepreneurs an opportunity to skip the start-up phase and make a breakthrough in a particular field.

These days, the world of e-commerce is also abuzz with news of acquisitions – be it the high-profile Flipkart buying out Myntra, which took the business world with storm last year or the latest acquisition of e-tailer Babyoye by Mahindra Retail. However, in each of the above cases, it is interesting to note that the buyers have chosen to let the acquired entity exist and operate separately. Some such examples include Flipkart’s acquisition of Myntra to Snapdeal’s buyout of Exclusively.com, to the more recent Ola’s (previously Ola Cabs) deal with TaxiForSure (TFS). One of the key reasons for these companies to retain the brand identity of the new company under their aegis may be to keep the brand positioning intact.

The reasons

The question that arises at this point is: When mass market players are selling everything, where is the need for niche players? Countering the question, Harsh Pamnani, former senior manager of TiE Mumbai says: “By being able to sell multiple products to the same customer, mass merchants (generalists) have the advantage of higher lifetime value of the customer. However, to maintain site layout consistency, mass merchants give the same kind of look and feel to all the categories. This way they also manage to meet the objective of profit of overall business, which is dependent on sales of both top selling and niche categories. Mass merchants focus more on top selling categories and are not able to gain specialisation in every category.”

On the other hand, niche players (specialists) have defined target groups, so they differentiate themselves through in-depth understanding of customers’ needs, huge variety, high-quality products, and exceptional services. Niche players have a clear value proposition and a focused positioning. By providing a large range of variety including long tail products, they are able to manage business economics and margins and need a smaller scale to earn profits. They create consistency in communication through all the channels, such as social networks, blogs, site content, etc., and get preference in search results, says Pamnani.

For instance, while Flipkart is known as a horizontal marketplace, focused on books and consumer electronics, Myntra is amongst the biggest names in online fashion retail.

Expressing similar views on this historic merger, consultant Harminder Sahani says: “Flipkart acquired Myntra as it did not have the skills or understanding of apparel business, while Myntra was amongst the best in that category and was a major competitor for Jabong. In the case of Mahindra Group, they have a wide network of brick and mortar stores, and with the acquisition of Babyoye they would try to capture the online consumers as well as increase their reach and penetration. The combined sales of on line and off line will give them greater economy of scale as well.”

A win-win situation for all

In a latest stance, leading e-commerce portal Snapdeal has acquired luxury portal Exclusively.com. Explaining the rationale behind the acquisition, a leading spokesperson from Snapdeal says: “All our acquisitions, including that of Exclusively.com, have been strategic.

Luxury products and services is a US$ 14 billion market in India, growing at 30 per cent year on year, according to a recent KPMG-ASSOCHAM report. More than 70 per cent consumers prefer to shop for luxury products in India rather than abroad. Realising this opportunity, Snapdeal forayed into designerwear in October 2014, with the launch of ‘The Designer Studio’. This acquisition will further strengthen Snapdeal’s presence in the luxury and premium products’ space. We aim to create India’s largest online luxury mall and offer a choice of premium products and services to consumers across the country.”

Explaining further, he informs that as part of this acquisition, Snapdeal will help Exclusively.com scale up and expand its current business and reach. In terms of revenue, the e-commerce giant aims to reach US$ 100 million in gross merchandise volume (GMV) this year and US$ 1 billion in GMV over the next three years. We also plan to add international luxury brands to the existing portfolio in the near future.”

Viability of acquisitions in future

If sources are to be believed, leading marketplace Amazon is showing keen interest in leading fashion portal Jabong.com. In an exclusive conversation with IMAGES Retail, Jabong’s Co-Founder Praveen Sinha has already indicated that Jabong will soon be a part of Global Fashion Group (GFG). One now needs to wait and watch how things take shape from there.

And not to forget the much awaited launch of Reliance’s online venture, which may unfold many new surprises for the retail industry in times to come.

Summing it up, a leading consultant Devangshu Dutta, chief executive of Third Eyesight, says: “Inorganic growth through mergers or acquisitions have happened in the Indian e-commerce space previously due to common investors, who wanted to concentrate their resources by backing fewer horses in the race, and picked the ones that were more likely to win. However, during the last few months, more acquisitions have been happening to acquire different capabilities, whether in terms of technology, product capability or market segment services."

"Acquisitions make sense when it takes significantly more money and more time to build a similar capability within the company. In India’s e-commerce sector, where the market is expanding rapidly and aggressively with each passing day, the space is still very unstable and speed seems to be of much essence. A well-capitalised company would, under such circumstances, look at acquiring strategically important capabilities as quickly as possible because that could mean the difference between being the leader or survivor, or being left behind in the race.

“Also, in the last 2 years, at least some of the e-commerce firms have built both scale and capability that are attractive both for other players within the sector, for companies outside the sector (such as Mahindra) and for companies outside the country,” concludes Dutta.

(Published in IMAGES Retail – April 2015 issue.)

---

Brick and mortar book retailers revamping strategies to take on online book stores

admin

April 6, 2015

Swarnpreet Kaur Tuli, The Economic Times
New Delhi, 6 April 2015

Crossword, too, is unhappy about the high discounts offered by e-commerce websites. "Slashing prices to more than 50% entices a customer to buy the book online. We, as book stores, cannot offer such high discounts due to higher rentals, manpower and other expenses incurred in opening a book store," said Kinjal Shah, CEO of Crossword.

Anuj Malhotra, who owns a book store in upmarket Khan Market in New Delhi, said that retail is all about services; offering high discounts on online stores cannot replace the services provided in physical book stores.

The book stores, nevertheless, are trying to beat this competition.

Om Book stores is trying to revive sales through activities such as book launches, introduction of special stationary and special discounts on both its offline and online stores, according to Mago.

"We are not afraid of online. We have expansion plans and are going to open stores in more cities like Chennai, Bangalore and Mumbai. We are going to compete and beat e-commerce. Also, we expect 20% increase in sales this year," he said.

Shah shared some strategies adopted by his store to ward off competition from online stores and to sustain profitability.

"At our store we keep a 60-40 mix of books and other categories to sustain profitability. We do various promotions during the year at which we provide some great offers and discounts, organize 10-15 events a month for customers to meet their favourite authors, provide special offers to customers on their special occasions like birthdays, arrange workshops and competitions for children, we do promos focused on certain age groups also during the year such as Children’s Fest (April and May), Annual sale (August) entire store is on sale, and many more," Shah said.

Malhotra said, "Either accept the change or step out of it."

On Flipkart’s books section, Ankit Nagori, SVP – marketplace, Flipkart, said the category is a high-volume driver for the online store. "We have been witnessing a healthy month-on-month growth in terms of sales and traffic. We have over 30 different categories and thousands of interesting titles," he said.

Further he added, "We believe that physical and online book stores will continue to co-exist and grow. The unique book browsing and navigation experience offered by a book store is what appeals to a reader/shopper. The success of a book store is defined by quality of experience and the variety of books that a customer can choose from."

According to Flipkart, the new reach offered by e-commerce marketplaces has encouraged physical book sellers to reinvent themselves and offer a wider range of books to cater to a larger audience base.

On how Amazon offers high discounts, even at the cost of bearing losses, Samir Kumar, director, category management, Amazon India, said, "Prices for products on our marketplace are determined by the sellers. We offer services such as FBA (fulfilment by Amazon) and Easy Ship to sellers on our platform, which enables them to significantly lower their cost of selling and reducing defects as they sell to a nationwide customer base. Sellers pass on these savings as lower prices on the platform."

We launched Amazon.in with books, movies & TV shows back in June 2013, and since then these departments have been growing exponentially, Kumar further said.

NEED FOR GOVERNMENT TO REPLICATE FRENCH RETAIL LAW

French government passed a law last year which prohibits online merchants in France to offer free shipments of discounted books. Also, the government allowed for up to 5% discounting on books. Offline book retailers in India are seeking a similar law to maintain equilibrium in the retail (online and offline) market.

According to Mago, a healthy competition between e-tailers and retailers must exist, but online stores like Amazon and Flipkart should not be allowed to offer such high discounts. The government should set an upper limit for discounts on both online and offline book stores.

He added that people visit his store to scan books and later order it online through e-commerce companies for higher discounts and free delivery.

If online sites offer nominal discounts, both book stores and e-commerce sites can function properly and sell more books to customers, said Shah.

According to Malhotra, 60% of online buyers are from tier I cities, 30% from tier II and 10% from tier III, whereas it should have been 50% in tier III and 25% in both tier I and tier II.

A NEUTRAL VISION

Devangshu Dutta, chief executive, Third Eyesight, gave a neutral insight into the current state of the books market in both e-commerce and physical stores.

According to him, the major factors impacting footfall and sales at brick-and-mortar book retailers are variety offered to the consumer in terms of search and width of choice, convenience in terms of a zero-commute purchase, significant improvements in payment and logistics over the last 2-3 years, and aggressive wooing of customers through discounts.

However, he said, offline retailers still remain the main channel for book sales in India. E-tailers are reducing the discounts offered on books, so the negative impact on physical retailers is now felt most acutely when a specific promotion is carried out by the major websites at any time, rather than through the year.

Landmark book store did not respond to calls and e-mail queries to share the impact of e-commerce on their store.

(Published in The Economic Times.)

---

Zero discounts on Patanjali products

admin

April 5, 2015

Ashish Rukhaiyar, The Hindu

Mumbai, 5 April 2016

At a time when both retailers and consumers are hooked to huge discounts on products across categories, one company has braved the ‘zero discount’ strategy, and is stil giving its competitors sleepless nights. Consumers are not complaining either.

Patanjali Ayurved, which is growing at a pace that is unnerving domestic and Multinational players in the fast-moving consumer goods (FMCG) segment alike, has barred its sellers from offering a single paisa of discount on its products. In other words, retailers have to sell every Patanjali product at the maximum retail price (MRP) printed on the packaging.

So serious is the company about this strategy, that even modern players like Big Bazaar and D-Mart, which have built their business on the discounting model, have been barred from offering any discount on Patanjali products.

Labels like ‘Patanjali products are sold on MRP’ greet shoppers at such stores, which have been able to gain market share by offering discounts on various products. For instance, D-Mart has a system of offering at least two per cent discount on the MRP of all products but Patanjali is an exception.

Aditya Pittie, chief executive officer of Pittie Group, the pan-India modern trade distributor for Patanjali products, says the directive has come directly from the company. For good measure, he says, it has reason to do so. “Patanjali products are anyway cheaper than others in almost all segments. As such, there is no need to give a discount. The quality of products makes them sell.”

Indeed, in almost all segments, including fruit juices, soaps, noodles, toothpastes and shampoos, Patanjali products are cheaper than those of other FMCG majors like HUL, Nestle and Colgate.

Sales do not, of course, always ride on discounts and companies can adopt strategies they deem fit to position themselves. “Every brand has to decide the boundaries within which it has to operate, including the positioning and pricing at which it wants to be sold,” says Devendra Chawla, president, brands, food & FMCG, Future Group. “The discount strategy is also decided by brands, and trade partners have to respect it.”

Devangshu Dutta, chief executive of Third Eyesight, a strategy and marketing consultant firm, saysthat every business has to look at brands from the point of view of positioning, customer loyalty, price premium, and the additional benefits it brings to the business, He says, “Patanjali may not be offering discounts, but business is growing with no sign of diminishing demand. The push has been such that there is a lot of brand loyalty. While the perception is that Patanjali products are cheaper, the argument does not hold true for all segments.”

The strategy does seem to be working in Patanjali’s favour.

It clocked a provisional turnover of Rs 3,266.97 crore in the first 10 months of the financial year 2015-16 (FY16), according to a rating rationale document by Brickwork Ratings, a credit rating agency. This is more than double of Rs 1,587.51 crore reported in the corresponding period of the previous financial year.

While Patanjali’s turnover and profit is currently less than that of most FMCG majors, it is growing at a much faster pace. On the profitability front, the company, which has yoga guru Baba Ramdev as its brand ambassador, almost doubled its profit in FY15 to Rs 308.79 crore from Rs 154.70 crore in FY14, according to Brickwork Ratings. Clearly, enough consumers see value in the company’s products.

(Published in The Hindu)

---

Don’t Resell Yourself Short

admin

April 5, 2015

Sunitha Natti, The New Indian Express

Chennai, 5 April 2015

Moving out of town, but don’t want to take along your fully functional fridge and ac? Eyeing a 42-inch HD TV but don’t want to shell out a thousand rupees per inch? Or, perhaps, itching to get an iPhone 6 Plus but don’t want to cough up that exorbitant asking price? Don’t worry. Trade portals like Olx, Quikr, eBay and Junglee have not only come to the rescue of price-sensitive Indians, looking for a good bargain in villas as much as veggies, they’ve also made second-hand buying and selling of goods fashionable. It’s a win-win situation, with online buyer-seller platforms convincing consumers of both product quality, and affordability.

“The Indian market always had a healthy second-hand sales culture. But online marketplaces are driving the social acceptability of used goods and have wider and more persistent accessibility than the traditional classified ads,” observes Devangshu Dutta, chief executive of market research firm Third Eyesight. Everything is available at negotiable prices. The only difference between then and now-the once-used products on sale these days are in good working condition, with some even commanding premium prices for their quality.

“The market for used goods is growing. We foresee new types of products being transacted online. Person-to-person sales are on the rise as more individuals understand and transact with ease online,” says Mahendra Nerurkar, general manager and director, Junglee.com, which is part of the world’s largest online retailer Amazon. With acceptability of second-hand goods rising, Amazon entered India in 2012—14 years after it purchased Junglee.

India’s used goods market is likely to touch Rs 1,15,000 crore in 2015 from Rs 80,000 crore in 2014, says Assocham. “Notwithstanding the market appetite, there was a significant trust deficit earlier regarding quality of the goods and reliability of the seller/buyer. Organized players like us and online shopping aggregators are reviving sales of re-used goods,” says Nagendra Palle, CEO, Mahindra First Choice Wheels Ltd, which also use online marketplaces like Olx and Quikr to sell re-used cars. “Currently, 20-25 per cent of our inventory is sold through these online platforms,” Palle explains.

According to a recent OLX CRUST Research, in 2014-15, goods worth Rs 56,200 crore, up from Rs 22,000 crore last year, are lying locked at people’s homes in the urban areas alone. These goods are no longer in use and have the potential to create a sustainable market for second-hand goods market if put on sale. “We have coined the term ‘Brown Money’ to refer to the money locked in goods gathering dust in our homes,” explains Amarjit Singh Batra, CEO, Olx India. Interestingly, one-fifth of the goods being stocked in urban Indian homes have ceased to be relevant to them, he notes.

According to Batra, platforms like Olx, are helping users unlock the money hidden in used items. “From a country of scarcity, we are moving towards a country of abundance, for at least some people. People are buying more, consuming more, and, in the process, wasting more. We want to help people waste less through collaborative consumption and extending the life-cycle of the products,” says Batra.

Interestingly, one out of every two of the 200 million Internet users in India, as per ComScore research, access retail services (websites) online. “The growing Internet base increases visibility, makes trading faster and importantly, improves accessibility,” says Dutta. Another motivational factor for buying used goods is that these products are less expensive than new goods, and yet meet product quality requirements.

For instance, Arvind from Ranchi wanted to sell his two-year-old one tonne Samsung split AC for Rs 13,500, it was viewed 16 times within 10 minutes of posting the ad online.

Considering the used goods market is still evolving, the industry is yet to overcome some challenges. With several classifieds, there is often poor due diligence of the type of advertisement, availability of picture, authenticity of classified, much to the annoyance of genuine customers.This is something, online market aggregators like Junglee, Olx and Quikr are trying to bridge, maintaining site-wide standardization with verification of seller, availability of pictures to ensure reliability of the product.

“All local sellers are verified through a phone verification process. All used product classifieds are screened for pictures and relevance. Thus, customers who may have not originally intended to buy used goods are also exposed to the used goods classifieds,” says Nerurkar.

Currently, automobiles and mobile phones are the widely bought and sold, but of late computer software, consumer electronics, kitchen appliances, clothing, books, mobile phones/smartphones, home appliances, watches, baby & children products, bicycles/two-wheelers, furniture, musical instruments, camera, sporting goods, car accessories and computer hardware are finding traction.

Trading is being actively pursued in cities like Delhi, Mumbai, Chennai, Bengaluru, Hyderabad, Kolkata, Patna, Guwahati, Ahmedabad, Lucknow, Jaipur, Chandigarh, Indore, Kochi, Bhubaneswar and Pune. “Mobile phones have enabled more Tier II and III cities to buy/sell and transact online with ease,” says Mahendra.

(Published in The New Indian Express.)

---

Future Group’s ambitious reboot

admin

March 31, 2015

Samar Srivastava, Forbes India

Mumbai, 31 March 2015

At the age of 54, Kishore Biyani is ready for change. The founder and CEO of Future Group, one of India’s largest retail conglomerates, is dramatically altering the way he does business. “By 2020, we need to transform Future Group into a technology company. We will be more of an analytics company than a retail one,” he tells Forbes India. This doesn’t mean that he has lost sight of his customer. Just the opposite: Biyani wants to know more about each and every person who visits his stores, including 38-year-old Chandrakant Dhawan (name changed).

Every month, Dhawan and his family visit the Big Bazaar outlet in Mumbai’s Vile Parle to stock up on groceries and other household commodities. During the festive season, his shopping basket includes a few gifts, and at the start of the academic year, he buys stationery for his children. In all, he spends about Rs 60,000 a year at Big Bazaar, which is owned by the Future Group. Biyani, however, is not satisfied with Dhawan’s spends. He wants more.

He’s determined to get the one crore loyal customers—whom he already has—to spend at least Rs 1 lakh annually in either one or across all 14 retail formats that the Future Group owns. If he succeeds, he would end up making revenues of Rs 1 lakh crore, a more than six-fold jump from what his retail businesses earn today.

Biyani spent the last two decades building a sprawling empire across India with millions of square feet of retail space. Through his Big Bazaar format, he has created the country’s best-known hypermarket, and has enjoyed success with affordable apparel labels like Pantaloons (since sold) and Central. The group has also developed smaller brands that retail everything from electronics (eZone) to furniture (Home Town).

Now, he is seeking to take his company in a direction that many traditional international retailers like American giant Target and Tesco in the UK have already adopted: First, using customer analytics to predict what consumers want even before they realise it themselves. And second, taking a bite out of the ecommerce pie.

Both moves, say experts, is a natural step in the conglomerate’s evolution to stay on the top. Biyani’s vision for the Future Group as an analytics company is hardly surprising; he has continuously upended the rules of the game and challenged conventional wisdom. In the early 2000s, for instance, he started the Sabse Sasta Din campaign, which promised the lowest prices in all Big Bazaar outlets across the country for three days around January 26 (Republic Day) and August 15 (Independence Day). They became, and remain to date, some of the most important sales days in the country.

The question is whether the Future Group will be able to build on the highs of the previous decade. Can it replicate this success across all its formats and not just Big Bazaar? If he accomplishes what he has set out to do, Biyani will be able to widen the narrowing gap with one its biggest competitors, Reliance Retail, a subsidiary of Mukesh Ambani’s Reliance Industries Ltd (RIL). Last year, Reliance Retail reported revenues of Rs 14,496 crore. The Future Group with Rs 15,500 crore in revenues has managed to retain its lead, but only by a whisker. (RIL owns Network 18 which publishes Forbes India.)

Industry experts point out that data alone will not guarantee increased sales.

“The Future Group is not the first to adopt this strategy, but it certainly has the most ambitious target,” says Devangshu Dutta, chief executive officer of retail consultancy Third Eyesight.

(Smaller retailers like Shoppers Stop are already using data analytics to boost sales.)

According to Dutta, to have a team running analytics solutions is the relatively easier part. “What is harder is getting the organisation to react to the insights. If there is a short-term opportunity, but the retailer is unable to source the goods from the supplier, it is as good as not having the data,” he says.

Manoj Agarwal, chief information officer at Future Group, while aware of the pitfalls, is excited about the direction the company is taking. “It’s a journey that will take us from brick to click,” he says.

Tailor-made for a customer

The first step in this journey is to strengthen the group’s loyalty programme. And the core of Biyani’s plan is the confluence of real-time analytics, real-time personalisation and real-time shopping. At a lab in his Vikhroli office, Forbes India gets a peek into the granularity of the data the company has been able to collect. It is now able to get very specific information about a customer, and based on past consumption patterns, can predict future buying trends. How many bars of soap will a particular customer buy in a year? Is a family taking advantage of the deals on vegetables? Is a person buying larger pack sizes more frequently or does he/she prefer smaller sizes?

It’s called predictive data. “What this does is allow us to specifically tailor deals and discounts for individual customers. This is something we couldn’t have done before,” says Dupindera Sandhu, who runs the Future Group’s loyalty programme, which, incidentally, has already been revamped. Customers can now use one card to avail of discounts and rewards across all the 12 brands, including Food Bazaar, Planet Sports, Central, Home Town, eZone, Brand Factory and Future Bazaar.

In addition, Future Group has tied up with Payback, a multi-brand loyalty programme, which allows a customer to avail of offers from services outside the Future Group. While this benefits consumers, it also gives the company access to a rich trove of data on a person’s travel habits, dining preferences and so on. The lab has also developed a new set of tools to create a social media profile of a customer based on information he or she has publicly shared online on sites such as Twitter, Instagram, Facebook and so on.

And from this information, Biyani knows that Dhawan from Vile Parle, who shops at Big Bazaar, likes hiking, prefers Samsung to Apple, and takes one international vacation every year. Agarwal says all this data is now easily available, and it is in “the slicing and dicing of information” that retailers have their task cut out. If done efficiently, a retailer can meet an individual customer’s needs. For instance, in Dhawan’s case, when he is due for a phone upgrade, the company can send him a discount coupon from eZone. When social media chatter picks up that he is planning a hiking trip, he could be enticed to purchase some outdoor gear that Planet Sports can offer at a discount.

Biyani has budgeted Rs 100 crore for this analytics overhaul, but it’s not money which is the issue as much as it is rewiring the organisation to think and function in a manner that prioritises data. The advantage of such an initiative is that after the initial investment and installation of computers and software, they cost little to run. But the benefits can be disproportionate. “The moment Dhawan buys a single phone costing Rs 30,000 from me, he is that much closer to spending Rs 1 lakh a year,” says Biyani.

And while he’s convinced that this is the new face of retail, he acknowledges that there is a fine line between using data for marketing purposes and invading a customer’s privacy. The solution is to ensure that consumers have the power to decide how much information they’d like retailers to have.

To sweeten the pot, Biyani has also made sure to up his offerings with excellent results. His electronics store, eZone, was a format that had been hit hard by competition. Online players had taken away the mobile phone market and nimbler rivals like Croma with stronger private labels had managed to grab a larger market share. “We have now managed to make this a Rs 2,000-crore business from Rs 800 crore [a couple of years ago],” says Rajan Malhotra, president eZone. He claims to have done this by offering customers assured buyback plans and service contracts. But there’s no denying that Future Group has been hit by the etailers.

Tackling the ecommerce threat

The market is a very different place from 2001, the year Biyani launched Big Bazaar. With 230 stores across the country, it is India’s largest hypermarket, but gone are the days when a retailer can count on physical footfalls to do the job. With competition from ecommerce rising, the Future Group is fighting to retain customers. It doesn’t help that the ecommerce industry, which is flush with private equity and venture capital funds, can afford to lose money while acquiring new consumers. Meanwhile, traditional retail has seen valuations plummet. Future Group is no exception: Its share price on the Bombay Stock Exchange has dropped from Rs 480 in 2010 to Rs 102 as of March 9, 2015.

“Discounting below price is not an option,” says Biyani, referring to the low prices that many ecommerce platforms are offering to grab customers. He believes that this trend of selling goods at very low prices will settle down in 12-18 months when private equity players stop funding losses. “At this point, my physical stores will be at an advantage.”

At the same time, the Future Group is getting ready to grab a bite of the ecommerce pie. In six months, most of Future Group’s brands will be available online. For instance, customers will be able to order online on Bigbazaar.com and have the products they buy delivered to their homes. Those dissatisfied can return them to the nearest physical store and get their refund immediately. This will significantly cut down return costs that are the bane of online retailers.

Biyani calls this initiative the Omni channel (online and offline) push. With a network of stores in 102 cities, he knows that he has a huge advantage over online retailers: A well-developed and efficient logistics arm. Goods ordered online need not be shipped to a customer from a warehouse in a distant location. Instead they can be shipped to stores, after which the company can tie up with a local partner for the last mile—from the store to the consumer. Think of Biyani as an online retailer with a significant offline presence.

His pan-India delivery network will allow him to save significantly on logistics costs. His nephew Vivek Biyani, who is director of Future Group and is leading the online push, adds: “Our trucks, in any case, deliver across the country. It shouldn’t be too hard adding specific customer orders to that.” Future Group is also making a big bet on in-store kiosks, which will allow customers on the store floor to order products that are not in stock. These will be delivered directly to the person’s home. Even small measures like these will go a long way in reducing the inventory a store needs to keep. At a Big Bazaar outlet in Mumbai, a customer used a kiosk to order a tea set online. Products like mugs and dinnerware are also offered with a small 10 percent discount. These kiosks will be rolled out in Big Bazaar outlets all through the year.

The precedent for Biyani’s ‘Omni push’ has been set by international brands such as Wal-Mart which, along with a physical presence, has an ecommerce platform that contributes about $12.5 billion in sales every year, according to a company press release. This is about 2.5 percent of the retail giant’s annual sales. While these initiatives have not been roaring successes—it is best to describe them as work in progress—they have contributed to that bump in top-line for traditional retailers.

In remaking the Future Group to compete effectively with his online rivals, Biyani has shown that he is a retailer who is thinking of the future. And as always, he’s made a big audacious bet. Global rivals have had a tough time pulling it off and there is no doubt that his journey will be equally challenging.

In 1997, when he rolled out his first Pantaloons store in Kolkata, the odds were stacked against him. He was an unknown player with very little capital. He built the brand into a household name before selling it to the Aditya Birla Group in 2012. In 2001, his first Big Bazaar changed the way Indians shopped. Now, once again, Biyani has shown that he’s capable of thinking big. The future of his company may well depend on this.

(Published in Forbes India.)