On 26 January 2001, at 5:00 am in Mumbai, thousands of people came out on the streets despite all the efforts of the police, these people wanted to enter a special building by removing the barricades and jumping over the wall.
This special building was India’s favorite shopping destination Big Bazaar. That day, a mega sale called the cheapest day was going on in Big Bazaar and Kishore Biyani’s Big Bazaar earned 30₹ crores only in this one day but what happened in the next 20 years that every store of this Big Bazaar was locked.
The Early Story of Kishore Biyani’s:
In 1981, Kishore Biyani was in the final year of college and his father wanted that He wanted to join the family business but he did not want to limit himself by joining the family business. He wanted to build something very big in his life.
During this time, Kishore Biyani saw that one of his college friends was wearing fashionable trousers made of a very unique fiber. This was stone wash fabric and he saw a lot of potential in it.
He immediately bought 200 meters of stone-wash fabric from Jupiter Mill. and started selling it to garment manufacturers in the city in the next six months, he had done a business of lakhs of rupees and from here his entrepreneur Biyani is not only selling fabrics of his brand.
He had even opened his store to sell readymade trousers and named it Pantaloon. Two years later, and started a men’s wear company in which he started manufacturing trousers on his own and named his new trouser brand Pantaloons.
Pantaloons’ idea behind the name was to make the trousers world trendy and modern, so Pantaloons became Pantaloons and later the name of the company was also changed to Pantaloons Retail. The design of the trousers was quite futuristic
For example, one of his trousers had three buttons above the zipper and the trousers were quite a high waist Due to modern designs, Pantaloons trousers became very popular. By 1994, 72 franchises of pantaloons had opened in entire India, and along with trousers, they had also launched products like shirts, jeans, ties, and socks during the same time, Kishore
Biyani saw that the trend of large-format retailing was increasing in India. It is big retail stores like Shopper Tops are opening which are many times larger than a normal showroom in size, variety, and quantity. That is why he opened Atlas’ first large-format retail store in Kolkata
This store was 10,000 sq. ft. and was the biggest store in Kolkata at that time. He also brought the concept of visual merchandising into the store which the store’s colors, science, lighting, and look and feel are used to communicate with the customer and ultimately provide a pleasing shopping experience.
Also, this store launched men’s wear as well as women’s and child wear. Everyone felt that opening such a big shop for garments was a big mistake but on the very first day, there was so much crowd that everyone’s opinion was proved wrong.
By 1999, Pantaloon had opened 13 mega stores and now Kishore Biyani India’s fashion retailer had become a tycoon but he was not going to stop yet. He observed that customers spend only 8% of their total expenditure on clothing. If he wanted to capture 50% of his wallet share, he would have to diversify beyond clothes to other items. During this time, Kishore Biyani visited Saravana’s store in Chennai. It was a 25-year-old store with five floors. It had clothes, toys, jewelry, appliances, and groceries. Saravana’s model was to sell very high items with low-profit margins.
According to this store, it had sales of Rs 200 crores in a year. He studied the store deeply and took inspiration from this. he decided to start his hypermarket. and this hypermarket went on to become
Beginning of Big Bazaar:
Before starting a successful hypermarket Kishore Biyani did a deep study of India’s local markets. He observed that the psychology of an average Indian consumer was that the shops that look modern and high-fi are expensive.
Because of this, the average customer felt comfortable in shopping in local markets where both the shop and the shopkeeper were enough. Kishore was simple, that’s why Biyani named his hypermarket
Big Bazaar so that people can connect with him instantly by hearing the word bazaar. He designed the Big Bazaar stores in such a way that they look like a combination of multiple shops in one building, as is also the case in a market. He believed that a salesman should never look smarter than the customer
That’s why he hired such salesmen whom the common man could easily approach and kept the uniform of these salesmen very simple too.
For example, Big Bazaar salesmen never wore a tie. Finally, the main idea of Big Bazaar was that customers should get the best and cheapest products. Keeping this strategy in mind, in 2001, the first three Big Bazaar stores were opened in Kolkata, Bangalore, and Hyderabad. Just like Palace, these stores also became very successful. So successful that in the next few years, 100 Big Bazaar stores were opened all over India.
But Kishore Biyani had plans to build something even bigger. He had seen in research that an average customer spends in a shopping mall. He found that an average customer spends in a shopping mall.
The Downfall of Big Bazar:
But then in 2008 came The Global Financial Crisis Consumer spending fell and Future Group’s sales crashed. Just to sustain the business Kishore Biyani had to take more debt by 2012, he had a debt of about 12000 crores and it was becoming difficult for him to even pay the interest on it.
That is why Kishore Biyani had to sell Patel for 1600 crores with a heavy heart and Future Capital was also sold for 4250 crores. Kishore Biyani’s biggest problem was that he did not make any one of his businesses massively profitable before expanding in other businesses and had to deal with a crisis He did not even maintain sufficient cash reserves for his business and that is why he had to sell a business which was closest to his heart.
Kishore Biyani thought that the money he got by selling Pantaloon and Future Capital would solve his problems But then the story enters two very big competitors amazon and Flipkart and now it was impossible to compete with them Along with this Big Bazaar Direct had many technical issues customer experience problems and inventory issues and due to these reasons, Big Bazaar Direct proved to be a huge failure and Future the group lost crores of rupees but Perhaps Kishore Biyani’s biggest mistake was to compete with the grocery stores of India.
Acquiring Easyday:
Kishore Biyani’s biggest mistake was to compete with the grocery stores of India In 2015, he acquired a small format grocery store chain called Easy Day at that time Easy Day had 190 stores and Kishore wanted to open 10000 stores by 2022, and replaced Indian grocery shops. By 2018, 1000 stores had already been opened To beat the grocery stores, Kishore Biyani launched a membership plan called Easy Day Club in which a customer could earn a full year by paying 1000 per year Easy Day could have taken a 10% discount on every purchase but their model failed miserably.
First of all, Indian customers do not want to pay in advance for future discounts, and also local grocery stores used to give 10-15% discounts without any subscription fees other grocery shopkeepers always build personalized relationships with the local population
They also give free home delivery and goods on credit but Easy Day could not match all these things finally where grocery stores staff, rent technology, etc. The expenses were negligible whereas Easy Day had to spend a lot on all of this That’s why Ultimately Easy Day started incurring huge losses and by 2020 many stores were shut down.
Launching Own Brands:
But Future Group’s mistakes don’t end here Kishore Biyani saw that his By Big Bazaar and other stores, other Brands are making crores of Profits by selling their products, he thought that
If he launches his brand products For the best-selling items He will benefit a lot That’s why he started his own brand products in every category like snacks Home care personal care and staples His Launched own brand products.
They planned to earn a revenue of 20000 crores from these brands by 2022 To earn 20000 crores in revenue but almost all their brands flopped badly they thought that just by keeping them on the shelf their products would start selling but customers still wanted to buy the same brands which they trusted for years.
Also, Future Group’s brands did not do anything different from the old established brands. They wanted to increase sales only based on discounts and because of the discounts customers tried the product once but due to poor quality did not repeat purchases.
Reasons for all these mistakes Future Group lost a lot of money and by March 2019, their debt had again increased to about 12800 crores Even after all this, Future Group was somehow Surviving.
Covid -19:
Then something happened Which shook Future Group to its core Covid-19: Soon the nation wide lockdown was announced and Future Group’s Big Bazaar Central and all other stores Shut down overnight, their revenue crashed.
The rent of the stores and the salary of the employees and the repayment of the debt got delayed due to non-payment, Big Bazaar and other stores’ location was in Kishore Biyani’s hands started snatching away from them and these stores started closing today out of these, about 800 locations in Reliance.
Bank of India sought insolvency proceedings on Future Group and these proceedings are still going on meaning even today Future Group’s assets are being sold one by one to pay off their debts There is no doubt that Kishore Biyani was a genius of business.
He created businesses like Pantaloon, Big Bazaar, and Central which revolutionized the Indian retail industry and also made him the retail king of India after this he lost his focus and rapidly closed down every place Took debt of thousands of crores to expand as soon as market conditions went bad and their business empire collapsed crumbled just like a sand castle.