'2009 will define India's retail biz'
Years ago, when I met then film producer Kishore Biyani (inset) for an interview about an upcoming production of his, it was only because of the persuasive powers of the public relations firm that was promoting the film. Then too, not many journalists were present.
Cut to the present. Kishore Biyani is no more an itinerant film producer. Touted as the king of Indian retail, Biyani has just finished a speech at the India Retail Forum. As I go up to request an interview, journalists are jostling for his quotes and sound bytes.
The change was evident even during his speech. Everyone in the audience were in rapt attention. Biyani, the CEO of the Future Group, was the most sought after person throughout the three-day event. He was like Moses spelling out the Ten Commandment to the other retail honchos.
In an interview with Chief Correspondent Syed Firdaus Ashraf, Biyani, the founder of the modern retail group Big Bazaar, has redefined the shopping for Indian consumers, gives his vision for the retail industry and his company's plans in the coming years.
Why did you say in your speech that 2009 will be the defining moment for Indian retailing industry?
All the new malls that are in the anvil will be ready by then. We will also have a retail policy in place and consumers too will be ready by then, so we are ready for interesting times. We will see lifestyle retails, high-end retail. Every retailer will be in the market. So, 2009 will be deciding factor for the retail market in India.
Will the bubble burst?
We have too many retail forums and too many malls have come up. The period to watch out for will be 2009 and it will be a testing time for retailers, I feel. We will all know by then what the real demand is and what the real supply is in the market. In the meantime, the challenge will be to find the right kind of people and trained people for the industry.
'Rising realty rates a big challenge'
The three-day India Retail Forum held in Mumbai recently saw a healthy crowd gathering everyday to gauge the state of India's retail business.
You mentioned in your speech at the India Retail Forum that the rising realty rates in India will be a challenge to the retail industry. Can you explain the rationale?
The consumer always saves money when there is inflation. He spends less when things are expensive. Inflation affects the consumer's psychology and people now tend to save money in such scenario and not spend. It has been observed that when real estate prices keep going up people tend to save and the consumption drops automatically.
Why have you started credit card banking and how is the response?
It is only 45 days old and the response has been good. It is one of the future ways of the retail market and a learning business for us. We are learning it. We have given loans to 500 customers so far. We are learning while we are doing our business.
What has the learning so far?
(Laughs) The first applications are always those of fraudsters.
What kind of potential do you foresee?
There is a huge potential and we have just begun. We are creating our checks and balances. In the last 45 days we have learnt a lot on who is a trade-worthy customer and that is a business secret.
'There are two Indias -- only one is growing'
A big bazar outlet in Mumbai.
You mentioned that there are two Indias today. The first one are those people who have power to spend and the second one are those who are dependant on them like drivers, cleaners and housemaids. Can you explain this?
Today, only one India is growing. The people who have aspirations and brains, they are the big consumers of retail market. This class is not making the other India grow. Lot of people have to do a lot of things to change the scenario. One option is that those who have a good income will have to create an income for the India that is left out. I call that group as the second India. They have to be protected in a network and we need to give them a chance to grow and become one of the consumers.
You once said that social security system is bad in India and that needs to be improved...
Today, India's social security system is a family security system. People save money for bad days but if you compare that with developed countries people spend money because they know that their government will look after them in bad days. They are not afraid of spending money in the developed countries. In the same way we need to create a system in India where people should not fear to spend money and not bother about their insecurities.
What can private players do in such situation?
The only solution to this problem would be to raise income levels. If we do that, then everybody will have spending power.
Do you think the real estate market has reached its peak and will crash?
I cannot comment on it. I would however say that this is a game of supply and demand. Price correction will always be there in such situation.
You said that you are approaching the Brazilian and Mexican ways to develop retailing business. Can you explain?
Every retail shop has domestic finance scheme in some cities of Brazil and Mexico. We are also looking at that model. If you study their trend then you will find that there is 6 percent default and I feel it is okay because 7 percent default is the norm in credit cards too.
'We keep women in mind'
Recently, Mumbai hosted India Retail Forum wherein business houses from across the country showcased their products.
What are the products that can be funded?
Lot of products can be funded. We have started with some products initially but eventually the idea is to fund consumption as much as we can.
Do you believe in customer brand loyalty?
I believe there is something called emotional attachment to a brand. People do switch over their loyalty at times. I feel that these days, maintaining brand loyalty comes with a cost. I personally believe that the customer is like a nomad. He will go from one store to another store. He will only come to you if you give him value.
How did you crack the shopping woman's psyche so that they eventually end up spending in Big Bazaar shops?
(Laughs) We keep women in mind. We work with them. We understand their emotions and therefore they end up spending in Big Bazaar.
Any plans for an IPO?
We have announced Future Capital Business and that will come up for IPO. The board has approved IPO and it will take its own process.
Years ago, when I met then film producer Kishore Biyani (inset) for an interview about an upcoming production of his, it was only because of the persuasive powers of the public relations firm that was promoting the film. Then too, not many journalists were present.
Cut to the present. Kishore Biyani is no more an itinerant film producer. Touted as the king of Indian retail, Biyani has just finished a speech at the India Retail Forum. As I go up to request an interview, journalists are jostling for his quotes and sound bytes.
The change was evident even during his speech. Everyone in the audience were in rapt attention. Biyani, the CEO of the Future Group, was the most sought after person throughout the three-day event. He was like Moses spelling out the Ten Commandment to the other retail honchos.
In an interview with Chief Correspondent Syed Firdaus Ashraf, Biyani, the founder of the modern retail group Big Bazaar, has redefined the shopping for Indian consumers, gives his vision for the retail industry and his company's plans in the coming years.
Why did you say in your speech that 2009 will be the defining moment for Indian retailing industry?
All the new malls that are in the anvil will be ready by then. We will also have a retail policy in place and consumers too will be ready by then, so we are ready for interesting times. We will see lifestyle retails, high-end retail. Every retailer will be in the market. So, 2009 will be deciding factor for the retail market in India.
Will the bubble burst?
We have too many retail forums and too many malls have come up. The period to watch out for will be 2009 and it will be a testing time for retailers, I feel. We will all know by then what the real demand is and what the real supply is in the market. In the meantime, the challenge will be to find the right kind of people and trained people for the industry.
'Rising realty rates a big challenge'
The three-day India Retail Forum held in Mumbai recently saw a healthy crowd gathering everyday to gauge the state of India's retail business.
You mentioned in your speech at the India Retail Forum that the rising realty rates in India will be a challenge to the retail industry. Can you explain the rationale?
The consumer always saves money when there is inflation. He spends less when things are expensive. Inflation affects the consumer's psychology and people now tend to save money in such scenario and not spend. It has been observed that when real estate prices keep going up people tend to save and the consumption drops automatically.
Why have you started credit card banking and how is the response?
It is only 45 days old and the response has been good. It is one of the future ways of the retail market and a learning business for us. We are learning it. We have given loans to 500 customers so far. We are learning while we are doing our business.
What has the learning so far?
(Laughs) The first applications are always those of fraudsters.
What kind of potential do you foresee?
There is a huge potential and we have just begun. We are creating our checks and balances. In the last 45 days we have learnt a lot on who is a trade-worthy customer and that is a business secret.
'There are two Indias -- only one is growing'
A big bazar outlet in Mumbai.
You mentioned that there are two Indias today. The first one are those people who have power to spend and the second one are those who are dependant on them like drivers, cleaners and housemaids. Can you explain this?
Today, only one India is growing. The people who have aspirations and brains, they are the big consumers of retail market. This class is not making the other India grow. Lot of people have to do a lot of things to change the scenario. One option is that those who have a good income will have to create an income for the India that is left out. I call that group as the second India. They have to be protected in a network and we need to give them a chance to grow and become one of the consumers.
You once said that social security system is bad in India and that needs to be improved...
Today, India's social security system is a family security system. People save money for bad days but if you compare that with developed countries people spend money because they know that their government will look after them in bad days. They are not afraid of spending money in the developed countries. In the same way we need to create a system in India where people should not fear to spend money and not bother about their insecurities.
What can private players do in such situation?
The only solution to this problem would be to raise income levels. If we do that, then everybody will have spending power.
Do you think the real estate market has reached its peak and will crash?
I cannot comment on it. I would however say that this is a game of supply and demand. Price correction will always be there in such situation.
You said that you are approaching the Brazilian and Mexican ways to develop retailing business. Can you explain?
Every retail shop has domestic finance scheme in some cities of Brazil and Mexico. We are also looking at that model. If you study their trend then you will find that there is 6 percent default and I feel it is okay because 7 percent default is the norm in credit cards too.
'We keep women in mind'
Recently, Mumbai hosted India Retail Forum wherein business houses from across the country showcased their products.
What are the products that can be funded?
Lot of products can be funded. We have started with some products initially but eventually the idea is to fund consumption as much as we can.
Do you believe in customer brand loyalty?
I believe there is something called emotional attachment to a brand. People do switch over their loyalty at times. I feel that these days, maintaining brand loyalty comes with a cost. I personally believe that the customer is like a nomad. He will go from one store to another store. He will only come to you if you give him value.
How did you crack the shopping woman's psyche so that they eventually end up spending in Big Bazaar shops?
(Laughs) We keep women in mind. We work with them. We understand their emotions and therefore they end up spending in Big Bazaar.
Any plans for an IPO?
We have announced Future Capital Business and that will come up for IPO. The board has approved IPO and it will take its own process.
