Kishore Biyani, founder of Future Group, was in Delhi suburb Noida to unveil HomeTown, the group’s first large-format store—spread over 1.2 lakh sq. ft—for home supplies ranging from electronics to paints.
Biyani also unveiled Future Money that will provide a host of financial services from loans to insurance and Future Media, which will develop and manage advertising in malls.
Biyani, who is also managing director of Pantaloon Retail (India) Ltd, started with a menswear manufacturing business in 1987. Today, with more than 150 stores occupying 40 lakh sq. ft of shopping space across 36 cities, he is India’s largest retailer.
The early mover in India’s organized retail space, however, is set to face stiff competition as several big companies—mobile services giant Bharti Enterprises Ltd to India’s biggest conglomerate, Reliance Industries Ltd, among others—are rolling out their own retail chains.
Biyani spoke to Mint about his plans and the retail market in India. Edited excerpts:
What is your game plan against deep-pocketed rivals such as Reliance Retail?
Our job is to become as big as possible. This is one business which can’t be scaled up very fast. It may take its own time. We don’t have companies that can produce malls very fast. I think the biggest issue will be finding quality retail space. If you build a mall like this (Unitech Ltd’s Great India Place in Noida), it will again take another three years. Three years is a big gap and an opportunity for us.
Do you think your advantage is primarily being first off the block?
It’s about speed. Also, if you see all the formats and all the categories, the way we have begun is we have captured consumption across every category of the consumer spends and it’s a big part of our service. Today we have launched Future Money, Home Town and Future Media.
Future Money is a good way to get people to pull out their wallets and to spend?
Future Money is going to be everywhere. It’s going to be the financial supermarket. We are planning 400-500 financial supermarkets in three years. It will do everything from credit to loans to mortgages to insurance. It will fund everything a financial supermarket does.
What is the biggest bottleneck that you see for retail as a whole?
I think it’s going to be market size. Everybody’s interpretation of the market size is going to be very interesting. It’s not that the consumer is not getting everything (he wants).
Do you mean people have overestimated the market?
It can be. If you look at the existing market and want to take a share out of it, it’s not going to be easy. You cannot compare yourself with the pushcart person and sell the same products at a lower price. It does become challenging.
What do you estimate to be the market size for modern retail?
It all depends on the population. Around 13% of the population can do shopping in modern retail. It could be around 40-45% of India’s aspirational consumption, not the basic commodity consumption.
But people are coming in that commodity space and setting up shop...
Modern retail is always all about making people spend more on other categories, so it’s going to be very challenging. You can’t sell bananas cheaper in this country.
Do you think it’s not sustainable?
Everything is possible but it takes time.
How do you respond to the overall concerns on the political and social level over how big retailers are squeezing smaller retailers out of business?
When Wal-Mart comes, they bring in stories along with them… we have 150 stores and we have come to this stage and nobody has ever questioned us till date. Once Wal-Mart comes in, people start questioning everything.
What is your overall expansion plan?
We plan to invest $1 billion (Rs4,300 crore) in the next four-five years. We should have 100 lakh sq. ft by next year this time. I think we are opening a store every day now.
If you were to step back and say this is my business empire, what all would you have your eyes on?
I am very happy, contented and settled now. I have just written a book. Currently I’m concentrating on its release. It’s called, It Happens in India.