How Kishore Biyani Built The Big Bazaar Brand

04th September 2020
How Kishore Biyani Built The Big Bazaar Brand

For Kishore Biyani, ‘Raja of Retail’, a two-decade affair with the middle-class Indian consumer becomes history, as its ‘Future’ finds a new helmsman.
(This story has appeared  in Swarajya magazine online)
By Anand Parthasarathy
September 4 2020: With some 200 upmarket stores, most of them big brand outlets, the 'R City' Mall at Ghatkopar has become within a decade, the go-to place for the Beautiful People, of a big swath of Mumbai’s North Eastern suburbs from Powai and Vikhroli to Bhandup and Mulund.
But suddenly, on some days of the month, a different clientele surges through, overwhelming the security checkpoints: entire families, toting heaps of newspaper and raddi, broken plastic buckets, bundles of old clothes…
They are heading for the supermarket, where additional staff wait with weighing scales to receive them.
It is 'exchange sale day' at the Big Bazaar when, as the advertisements plastered over the region have been exhorting: “Kabaadi se karo kamayee”, (‘earn from the rag man’). The rate card is irresistible: Rs 50 per kg for newspapers; Rs 100 per kg for old clothes; Rs 300 per kg for old utensils; Rs 1,000 for an old mattress.
By evening, tons of junk has been off-loaded and hundreds of customers have gone home clutching coupons that they could exchange to buy heavily discounted stuff from any store in the Big Bazaar group.
The scene is repeated regularly all over India at hundreds of BB stores, many located within large malls, where the supermarket is the only affordable attraction for lakhs of middle-class visitors.For them, Big Bazaar is the only reason they come. The rest of the mall is for window shopping.
At the Phoenix Market City Mall in Whitefield, Bengaluru, Wednesdays see a sharp upward spike in footfalls (till Covid-19 came).That was because it was the day for sharp weekly discounts at Big Bazaar. Today in Bengaluru, most supermarkets have been forced to follow suit and offer ‘Wednesday prices’.
Till 2019, the BB outlets in many malls used to refund the parking fee at the checkout. With his keen perception of what the thrifty aam aadmi in India considered paisa vasool, Kishore Biyani, the founder and owner of the Future Group of companies which launched Big Bazaar in 2001, realised one thing: Customers who came to his stores attracted by the small discounts, resented having the benefit nullified by a Rs 50-Rs 100 parking fee. So, he took care of that.
The three Fs
Biyani began his retail foray in 1987 with a clothing store brand called ManzWear, which, in a decade, morphed into the national chain of Pantaloon stores.
Encouraged by his success in the readymade garments business, he decided to upscale the traditional business of kirana stores, wooing its core customers into large self-service supermarkets and leveraging his own supply and logistics chain to offer across-the-board discounts on the MRP.
The Big Bazaars soon expanded to embrace Biyani’s three business pillars: Food, Fashion and FMCG (fast moving consumer goods). You went to buy some vegetables, but you had to pass through aisles of kurtas and dresses and were tempted to buy.
Another shrewd realisation, that his archetypical customer resented having to pay the stiff Food Court prices in most malls, led Biyani to attach a small eatery to his stores, with down-to-earth choices: biryani, paav bhaji, noodles and samosa at almost street prices.
To attract the elderly, many of his stores had a seating area for senior citizens, where they could relax, while a store assistant worked on their shopping list.
Thoughtful attention to details like these won the Big Bazaars a fiercely loyal clientele of middle-class Indians and helped graduate them from kirana store to supermarket, in much the same way that Captain Gopinath’s Air Deccan made flying affordable to a new class of travellers — or Nokia became a synonym for one’s first mobile phone.
For budget clothing, Biyani started the Brand Factory stores and for the young and upwardly mobile, he launched the FBB fashion brand.
This new class was willing to pay extra for style in everything including home entertainment and furnishing the home. So came the Future Groups Home Center stores and the e-Zone audiovisual product stores.
All this called for careful consolidation. Instead, Biyani chose to trust his gut instincts and went for expansion instead: between 2014 and 2017, he added many competing supermarket chains to his company: the respected Bangaluru-based Nilgiri group in 2014; EasyDay and Heritage Fresh in 2016; HyperCity in 2017.
Added to the FoodHall gourmet food stores and the Central multi-brand (mostly) clothing malls named for each city, the Forward group at the beginning of 2020 owned 1,800 stores in 220 cities employing some 70,000 and accounting for 2 million customer footfalls a day.
It was achieved at a small price. In 2012, Future sold off the Pantaloon stores to the Aditya Birla Group — but the expenses of this vast and disparate retail chain mounted, and a new challenge had crept up: e-commerce.
Amazon, which had announced an Indian war chest of $ 5.54 billion and FlipKart, strengthened after its buyout by Walmart, were wooing away customers across all retail segments.
Online onslaught
Biyani chose to stick with what he perceived was his core competence: the middle-Income Indian who preferred to shop in physical stores. Sadly, for him, this same Indian had tasted the advantages of online shopping — on a phone and a digital wallet. The prolonged lockdown since March this year was to prove the last straw: shop-based business collapsed, albeit for all vendors.
Ironically, during the last few weeks, Big Bazaar has come to the rescue of home-bound Indian households and has delivered anything available in its neighbourhood stores, within hours of getting an order.
But it was too late. The Future group may be the first pan-Indian enterprise to succumb to the challenge of long shut-downs. It won’t be the last.
The deal last week, sees Reliance Industries scoop up all of Future’s retail businesses and its back-end supply chains, just in time to ignite its new retail arm, JioMart and strengthen its 10,000-strong chain of Reliance Fresh, Reliance Digital, Reliance Trends and Reliance Mart stores.
Biyani is left with an insurance business and the manufacturing and distributing arms of Future group, including the always lucrative fashion clothing line for which the new owners at Reliance will continue to provide a buyer.
Will Biyani bounce back? Too early to tell. At 59, he has the energy for another Coming with his daughter Avni by his side, who is already schooled in Future’s ways.She is credited with conceiving the Food Hall idea and moving Future away from its singular focus on the middle class of India.
A mix of bricks and clicks, of physical stores and an online operation, may be the only viable option, if any one wants to tap into India’s booming retail business worth about $ 750 billion today and estimated to touch $1.3 trillion in five years (BCG group data).
But it helps to have the common touch, to have that uncanny instinct for what the mass of customers yearn for. So, don’t write off Kishore Biyani yet.

Our earlier story with financial details of the Reliane-Future deal here