As on today, 30th July 2020, it is a foregone conclusion that Future Group will be sold off. The poster boy of Indian modern retail, Kishore Biyani, who claimed that elephants can dance will wander into the sunset. The man who has many firsts to his name will have one more added – selling off the fruits of his entire life’s efforts.
There will be several analysis and reasons propounded for the mighty fall. For outsiders, the below might look and sound like obvious reasons. But, they are not the real, as put forth alongside.
- Kishor Biyani’s e-commerce ventures failed. So what? Who has made money in India till date from e-commerce?
- Kishore Biyani had an overdose of debt. So what? Who does business with his/her own money in India?
- Kishore Biyani spread himself thin by getting into non-core businesses. Well, when things don’t work as they were planned, in hind-sight, everyone is an expert.
- Kishore Biyani was high on people and low on processes. Well, that’s what worked for him ever since he started.
I worked with Big Bazaar for 9 + years and the below is my take on what led to Kishoreji’s undoing. (Big Bazaar was the predominant component of Future Group. It has sunk and taken along the entire Future Group with it).
Big Bazaar’s too many avatars
Big Bazaar was a pioneer of modern retail in India with a clear-cut positioning “Is se sasta aur accha kahin nahi”. It broke new ground with “Sabse Sasta Din” and brought new customers to the fold of modern retail. These strategies worked extremely well and delivered the results.
So, what do you do? You continue the same and build on it, right? No, Kishoreji kept coming up with new avatars for Big Bazaar, “Naye India Ka Bazaar” and later “Making India Beautiful”. With frequent changes, the customers and even the employees were confused. The store layout, assortment, shopping experience could not keep pace with what the marketing campaigns promised.
The three key departments – Fashion, General Merchandise and Food started communicating with altogether different customer segments. Fashion became a sponsor of Miss India and positioned itself as a premium departmental store, a me-too Pantaloons. Food remained static in a by-gone era. General Merchandise was spoken about but not acted upon.
It was not the categories or the operations but the marketing which was deciding and driving the strategy. This too clicked, but was not done consistently enough. A lot many properties got made – Wednesday Bazaar, Monthly Bachat Bazaar, The Great Exchange, The Great Indian Shopping Festival etc and got junked. The marketing budgets lurched from one extreme to another, so did customer foot-falls and sales.
Now and then, the directions were changed from focusing on top-line to bottom-line and vice-versa. The offers and discounts saw recurrent variations. At times, we were the cheapest in the market. At times, we were not. The result – customer stickiness suffered. No amount of Big Bazaar Profit Club or Payback could mitigate the loss.
In the meanwhile, D Mart with its EDLP (Every Day Lowest Pricing) strategy hammered Big Bazaars. The customers were more than happy with the consistent pricing and the shopping experience of D Mart. It became a me-too Big Bazaar and a highly successful one at that. Kishoreji felt that Big Bazaar should not be a me-too D Mart and we never again found a worth-while customer positioning.
Do not even bring Big Bazaar Gen Next to the discussion. It was not just a case of neither here nor there, it was a case of nowhere.
Acquisition of supermarket chains
If organized retail is ever to turn profitable in India, it is going to be a hypermarket format – ala Big Bazaar. Future Group had burnt its fingers with stand-alone Food Bazaars, a supermarket format. Yet, Kishoreji went on an acquisition spree of supermarkets – EasyDay, Nilgiri’s, Heritage. Further, he added Hypercity to the mix. He bought them so that they nobody else could buy them. Just that, they were not worthy of buying by anybody.
All of these chains were chronically loss-making. Future Group had no expertise turning around a business, wherein nobody in India has ever made any money. To make matters worse, Kishoreji continued with the management team inherited from those chains. Net result – more losses.
The leadership of these chains did get changed, but with a time-lag of 6-12 months. However, down the line integration never happened and the benefits of synergy never materialized. In the interim, the balance sheet of Big Bazaar and the share price of Future Retail Limited were weighed down with the acquisition costs and the accumulated losses of these chains.
Kishoreji was never good at nuts and bolts. He had no reason to be. He trusted people who grew through the ranks and substituted them for processes and systems. It worked fine until it didn’t. Somewhere, professional leadership lost interest. Kishoreji, for that matter, even Rakeshji did not realize this.
All the Big Bazaar Zonal Heads have been in their positions for more than a decade and going through their motions. They have lost their passion for business and just hanging around because there is nowhere else to go.
All the Big Bazaar Category Heads have been internally promoted resources. None of them can handle the complexities of businesses that they oversee. Their CVs have become so bloated with designations that they cannot fit in anywhere else.
Everyone in the Big Bazaar top management has seen numerous examples of CEOs in other formats and functions having to leave Future Group just because s/he seemed to have a different view from KB.
With the above dizzy cocktail, there was no incentive for Big Bazaar professional leadership to counter the promoter or try and do anything worthwhile.
Future Group – Re-Born
Kishore Biyani believes in “Constructive Destruction” and “Rewrite Rules, Retain Values”. Wishing him a second inning. He is too good to have only one, and the master craftsman deserves a better ending.
Future Group will be re-born.
PS: I enjoyed my every minute with Big Bazaar, Future Group and it gives me immense pain seeing it falling apart.
The above stuff can also be a rant of a disgruntled employee (myself) who had to leave the company in a not-so-friendly manner. Read with a pinch of salt.