Small-format stores will drive Future Group’s growth: Kishore Biyani
Future Group is aiming for Rs40,000 crore turnover in FY19, of which Rs5,000 crore is expected to come from small-format stores
New Delhi: The Kishore Biyani-led Future Group is spending Rs100 crore in the first phase of rolling out an ambitious Retail 3.0 digital strategy, which blends technology with the bricks-and-mortar store model.
Under the new model, the company is allowing customers, who have paid a Rs999 annual membership fee, to order grocery and food products through its app, chat platform WhatsApp and over the phone from small-format stores such as Easyday, Nilgiris and Heritage.
The move pits the retail giant against entities such as online food and grocery platforms BigBasket and Grofers.
The company said that it has signed up 700,000 members so far and aims to take this figure to 1.7 million by the end of this fiscal year.
Future Group aims to post a turnover of Rs40,000 crore this fiscal year out of which Rs5,000 crore is expected to come from small-format stores, which have been identified as the growth driver.
“We expect our small-format stores to overtake Big Bazaar in the next four years,” said Biyani, chairman and chief executive officer of Future Group.
Big Bazaar is Future Group’s flagship large-format retail store, which is expected to post a turnover of Rs20,000 crore this fiscal year.
Currently, home delivery is available in 70 small-format stores in Delhi and the company plans to take this new model to 1,000 stores across the country in the next two months.
“What we are offering is similar to Amazon Prime, where one gets certain privileges having paid a membership fee. Customers want quality, convenience and competitive prices and we offer all three to them,” said Biyani.
Apart from the flexibility of ordering online, home delivery and picking the products from the store itself, the members will also get a 10% discount on the products at these stores.
Members will also get to avail offers across the company’s retail stores such as FBB and Central.
Currently, the membership only allows online product ordering, but the company plans to introduce services such movie-ticket booking and home insurance in the next few months.
“Our focus is to drive membership and we would forge strategic alliances with different players to offer such services,” said Biyani.
The group aims to touch Rs1 trillion turnover by 2021-22, out of which Rs60,000 crore is expected to come from small-format stores and Rs40,000 crore from Big Bazaar stores.
In terms of store count, the group has set itself a target of reaching 450 Big Bazaar stores and 8,000 to 9,000 small-format stores by 2027.
Biyani said he does not aim to acquire existing online grocery platforms.
“We are not looking at any acquisitions in the grocery space. We are the biggest proponent of online to offline (O2O) strategy under which most of our big marketing campaigns are executed online driving our store walk-ins. We want to be present across all the platforms wherever the consumer is willing to transact,” he said.