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KISHORE BIYANI AND BIG BAZZAR

PRESENTED BYSURBHI SHARMA VIKAS HOODASONIA WALIA SAMEER NARANGSHELZA GUPTA 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 group’s 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 brands- JOHN 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 Biyani’s entry into the hypermarket concept with BIG BAZAAR.

• Big Bazaar required a lot of investment .• It wasn’t 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 off-take.

• 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 service

Low price High price

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”.• Biyani’s 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.