KISHORE BIYANI AND BIG BAZZAR

PRESENTED BY
SURBHI SHARMA SONIA WALIA SHELZA GUPTA VIKAS HOODA SAMEER NARANG SIDDHARTHA GUPTA

KISHORE BIYANI
Known as The Father of Retailing in India. Born on 1st August 1961. Married to Sangita Biyani. Currently living in Mumbai with their 2 daughters.

 A staunch believer in the groups corporate credo, Rewrite Rules, Retain Values, He recently authored the book, It Happened In India. Is the Group CEO of Future Group and Managing Director of Pantaloon Retail. His saga began with his family business in textiles which he joined after graduating in commerce. Launched first branded ready-made trousers brand IN 1972- PANTALOON through his company PANTALOON FASHIONS. PANTALOONS went public in 1992 with 60 exclusive shops.

 Later he started manufacturing garments under brandsJOHN MILLER and BARE. Despite good products and competitive pricing business seemed unviable due to high distribution costs and margins. This surged Kishore Biyani to open his own store in 1997 in Kolkata. Beating all odds store did a business of 100 million as compared to expected 70 million.

BIG BAZAAR- The Big Entry ISSE SASTA AUR ACHA KUCH NAHIN
Year 2001 saw Biyanis entry into the hypermarket concept with BIG BAZAAR. Big Bazaar required a lot of investment . It wasnt feasible to raise money from the market as share price was low- Rs 18. It would have led to dilution of equity Took a loan of Rs 1.2 billion First store at Mumbai pulled over 100,000 people.

MERCHANDISE MIX
Big Bazaar stocked about 1,30,000 items in over 20 product categories. The classification was done in terms of apparel and non apparel. In the first year, apparel accounted for 70% of the offtake. The price ranged from Rs.99 to Rs.799 Non apparel included plastic items, footwear, toys, luggage and stationary. It accounted for 30% of the off-take in the first year. Also launched Food Bazaar in the first year of operations.

STRATEGY
To offer value to the customers. As the store would offer a large mix of products at a discounted price, the name BIG BAZAAR was finalized. Price was basic value proposition at Big Bazaar.

BRANDS AT BIG BAZAAR

IMPORTANT FACTS
Indian Wall-Mart.
The biggest customer for Big Bazaar till date is a farmer in Sangli whose bill amount was Rs. 1,37,367 If you thought Big Bazaar outlets are crowded, they are intentionally designed to look that way. Big bazaar runs SAP(NYSE:SAP)is one of the leading ERP solution provider.

THE IDEA OF BIG BAZAAR

Kishore Biyani wanted to give Indian customers the feel of local market place-narrow lanes ,crowded market place an d customers bumping into each other. Big bazaar wears the look of intentional distinctive layout scheme designed by Biyani. He knew that Indians liked the hustle-bustle of the marketplace giving them the feeling that the goods being sold there are low priced.

POSITIONING
High service

Low price

High price

low service

PROMOTIONS
Display of small Holding in whole Big Bazaar. Saal Ke Sabse Saste 3 Din Future Card(3% Discount) Advertising(prints ads, TV ads, Radio) Brand Endorsement by M.S Dhoni Exchange Offer Weekend Discount JUNK Swap Offer-Bring anything old and take something new

GROWTH STORY

MAJOR CHALLENGE FOR BIG BAZAAR

Was to dispel the myth in the minds of the Indian consumers that big shopping stores charge more price compared to local kirana stores. Also started the campaign-HUM SASTA KHARIDTE HAIN TO SASTA BECHTE HAIN. The economies of scale enable big retailers to provide lower prices, discounts and promotional gifts at their stores.

SPACE LAYOUT
Earlier Kishore Biyani used to pay about Rs 75 million for 50,000 sq ft and generate an annual turnover of Rs 3.5 billion. Now for the same size he spends about Rs 40 million and generates a turnover of about 500-600 million. This may be partly attributed to mall-making frenzy in the country. Builders prefer to rent out their spaces to the outlets which can pull the crowds. Earler Biyani used to do the interiors for the space after acquiring it. But later builders were ready to provide fully-furnished stores to let him start the operations.

NEGOTIATING WITH MANUFACTURERS

Biyani often tied up with its manufacturers to bring down the selling price. Big Bazaar was able to engineer its own prices with its tie-ups with big manufacturers.

FOOD BAZAAR WITHIN BIG BAZAAR

Started in June 2002. Idea behind Food Bazaar was to focus on the farm to plate. Biyanis vision to have farm next to his stores. Food Bazaar at Ahmedabad has a full fledged diary having a capacity of 1000 litres a day and produces its own paneer and pasteurized milk. Biyani has created in-house labels for certain products .

SUPPLY CHAIN OF BIG BAZAAR

Big Bazaar used the traditional supply chain. Instead of exclusive supply chain to replenish its stores located all over the country. Biyani chose this traditional supply chain because creating an exclusive distribution system is highly capital intensive. Also because the distributors play a major role in the traditional supply chain by operating at wafer thin margins.

 This wafer thin margin were possible due to utilization of the family owned warehouses of the distributors. They involve their family members into the business. They were also ready to provide goods in small quantities by using inexpensive mode of transports like cycle rickshaw. With this there was a risk of facing shortages in scenarios where a particular product related promotional scheme is launched. Distributors mat not be able to handle this swamp of orders.

COMPETITION FROM NEW PLAYERS

New players like RELIANCE and WAL-MART. R.P.GOENKA ENTERPRISES and the K.RAHEGA GROUP have always been stiff rivals with outlets like Food World and Shoppers Stop respectively. Small players like FabMall India.

QUESTION
Using the traditional supply chain has worked for Biyani so far. Do you think it would work in the future as Reliance and Bharti-Walmart has chosen to follow the exclusive supply chain route for its stores?

 NO BIG BAZAAR WILL HAVE TO CHANGE TO EXCLUSIVE SUPPLY CHAIN FROM TRADITIONAL SUPPLY CHAIN. TRADITIONAL SUPPLY CHAIN HAS A SEQUENTIAL PROCESS, ANY GLITCH AT ANY STEP CAN DISRUPT THE WHOLE CHAIN. EXCLUSIVE SUPPLY CHAIN BEING FOLLOWED BY REALIANCE AND BHARTI-WAL MART CONSISTS OF MESH LIKE NETWORK IN WHICH EACH ENTITY IS CONNECTED TO EVERY OTHER ENTITY.