New Delhi: Kishore Biyani, known as India’s “King of Retail”, is spending the weekend his favourite way: trawling the aisles of one of his Big Bazaar supermarkets, eyeing what customers are loading up on.
“You can tell the customer’s story by looking at his trolley,” said Biyani, who pioneered supermarkets in India, guessing that one shopper was a bachelor from the ready-made meals piled in his cart.
But his store jaunts have taken a special meaning these days as he seeks to fend off deep-pocketed competitors threatening to outspend and outsell him.
Biyani visits his Big Bazaar clothing, home ware and other stores up and down the country to see what’s working and what’s not before competition heats up in what analysts have dubbed the “Great Indian Retail Gold Rush.”
“The real competition is two years away. We’ll be ready,” said 46-year-old Biyani, often called India’s answer to US retail tycoon Sam Waltonwhose “pile ’em high, sell ´em cheap” philosophy made his Wal-Mart Stores Inc. supermarket chain the world’s biggest.
Biyani, who up to now has stayed far ahead of the pack in the retail sector, aims to blanket the increasingly affluent nation of 1.1 billion people with his stores targeting the average Indian’s obsession with bargains.
He has been on a massive expansion binge, opening outlets at the rate of one every other day, to get a jump on rivals such as Indian petroleum giant Reliance which began rolling out small format “neighbourhood” stores last year. “We’re growing, we’re now five million sq. ft (465,000 square metres), we will be 10 million sq. ft by May next year, by 2011 we aim to be 30 million sq. ft,” he told AFP in an interview.
“We are planning over 3,000 new stores by 2010 from 140 now,” said Biyani, known as a maverick who scorns case studies—“they’re useless in a rapidly changing environment.”
“We booked this land on which they’re being built at rates that are much below the costs our competition is acquiring land,” he added with a smug grin. Soaring land costs have emerged as a major issue for retail expansion in India.
Apart from Reliance Industries Ltd, Indian telephone giant Bharti Airtel Ltd’s promoters also have plans for a pan-India retail operation. Thetea-to-steel Tata group and the Kumar Mangalam Birla group are also readying retailventures.
But Biyani, who is seen as the father of chain store retailing in India, is betting he understands the Indian consumer “like nobody else” and says his Mumbai-based Future Group has the “first mover advantage” in seeking to tap their new desire to shop till they drop.
Biyani opened his first store in 1985 and fast realized India’s hugely fragmented mom-and-pop store landscape would sooner or later attract the attention of organized or chain retailers.
From a modest start selling men’s trousers, his ambitions grew, and he launched his Big Bazaar supermarkets with everything from groceries to television sets.
His slogan is “Sabse Sastha” (“We’re the cheapest”), and his stores are jammed.
Biyani wouldn’t have it any other way. “Who would go into a store if it didn’t look crowded?” he said.
The son of a middle-class Mumbai family who graduated with a commerce degree, Biyani said he built his empire using “gut sense” and all the retail books he could lay his hands on.
“My motto is buy well, sell well,” said Biyani, given the “International Retailer of the Year Award” in 2007 by the US National Retail Federation.
Apart from retail, Biyani’s Future Group has fingers in many other pies, including insurance, lending and mutual funds and he aims to raise the group’s annual turnover from Rs20 billion ($494 million) to more than Rs300 billion in the next four years.
“He’s an incredible entrepreneur. Not only is he able to see things a bit ahead of others, he moves at lightning speed against all kinds of challenges,” said Arvind Singhal, chairman of retail consultancy KSA Technopak.
Even though Biyani is now a rich man, he feels uncomfortable with conspicuous consumption and has no wish to challenge the Louis Vuittons and Chanels which are making inroads in India.
“I don’t understand the luxury market,” he said frankly. “The lower-end customer is less fickle. They appreciate value.”
But can he fight off his retail rivals? “If he gathers all his resources, it can be done,” said Gibson Vedamani, president of the Retailers Association of India.
In any event, Biyani says there’s enough retail pie to go round. “Modern (chain store) retail makes up about 8% of total retail in India and is expected to reach 15-20% in a few years. We’re talking 40% compound growth—big enough for many entrants.”