Interview - pantaloon

Guess what? 3 million square feet of retail space spread across 25 cities where 12 crore Indians will shop this year!

This is Pantaloon Retail (India) Limited, (a Pantaloon Knowledge Group Company) - India’s face of organised retail business.

Presently, in to five lines of businesses – fashion and footwear, food, general merchandise, leisure & entertainment and home – the company operates multiple delivery formats : the fashion store format under the Pantaloons brand; the showcase seamless mall under the Central brand; the hypermarket discount store format under the Big Bazaar brand; the food & grocery retail format under the Food Bazaar brand, and apparel stores under Fashion Station.

The Company plans entry in telecommunications retail and other lines of businesses such as wellness and beauty as well as books and music, besides pantalooning a portal for e-retailing in the near future as another delivery format.

A retailer by karma and a nationalist by dharma, Managing Director of Pantaloon Retail (India) Limited, Kishore Biyani prides in being Indian and advocates ‘Indianness’ as the core value driving his company. He also stresses on the importance on continuous “Introspection” and is a firm believer in learning, unlearning and re-learning all the time. His passion is ‘observing’ and he enjoys watching Hindi drama and cinema. He is a compulsive reader.

Kishore Biyani shares his views on Pantaloon and the Indian retail sector on Face2face.

fibre2fashion:Where do you stand in the retailing sector?

Mr. Kishore Biyani India is still in the nascent stage of organized retailing and is constantly evolving. Pantaloon

Retail (I) Limited is a front runner in India’s modern retail space and we represent

fashion ,food, general merchandise and other lines of business, through multiple delivery formats, primarily catering to the lifestyle and value customers.

The company has stores in nearly 30 cities across the country, constituting over 2.7 million square feet of retail space. The company has also signed close to 10 million sq. ft. of retail space to be operational by end 2008, which represents 20-30 % of all modern retail space coming up in the next three years. Over 200 million footfalls are expected in our stores by 2006-07.

I believe that consumption will be the next big driver of India’s economic growth. Rising incomes and increased exposure to global products and global consumption patterns have changed the average Indian’s attitude towards consumption and savings. Consumption = Development. Increased and channelised consumption would lead to the development of the nation through improved and better infrastructure facilities, greater employment generation possibilities will emerge with increased consumption, leading to people wanting to spend more on themselves. This cycle is what will fuel the consumption boom in the country.

 

fibre2fashion:What are the other retailing/non-retailing areas you are looking at?

Mr. Kishore Biyani We are in the process of constant evolution and firmly believe in creating the present, with

the future in mind. We have only one vision-to capture the highest share of the consumers wallet.This is what has led us to believe that apart from our core strengths in fashion, food and general merchandise, we will operate through various formats in other lines of businesses; complete home solutions, leisure & entertainment, wellness, communications and financial products.

We also have two AMC’s. One that specializes in Property and the other is a ‘Consumer India Fund’. The property fund aims at sourcing high quality property at the lowest possible rates, while the consumer fund will look at providing our retail pipeline and expertise to national and regional brands, thereby enabling them with a wider coverage.

 

fibre2fashion:Who are your major competitors? What is your share in the market?

Mr. Kishore Biyani We operate in a competitive environment. For each line of business, we would face

competition from established national and regional companies. In the fashion segment, we probably face competition from Shoppers Stop, Trent and Lifestyle. The hypermarket business is relatively new, being just about three to four years old in the country. We face

competition from the likes of RPG (Spencer’s), Trent (Star India Bazaar) and with Shoppers Stop too indicating their entry into the hypermarket segment. In the Food business, we face competition from Subhiksha, Food World to name a few.

 

fibre2fashion:What is the market and mind share you are looking at in the next five years?

Mr. Kishore Biyani At Pantaloon we do not look at market shares. Though we have secured 30% of modern

retail space coming up in the next three years, our endeavour is to keep evolving with the young Indian consumer. As regards mind share, we want all our store formats to capture the imagination of the target customer.

 

fibre2fashion:What are the major trends retailers should expect this year?

Mr. Kishore Biyani In India, organized retail constitutes about 3% of total retail and is poised to reach 15-20% in

the next few years, which translates into a 40% CAGR. This indicates tremendous potential for the sector for the next few years.

The future will also see the pantaloon of several new concepts targeted at the Indian consumer.

Further, retail development will not just occur in Tier 1 cities, but will have far more significance in Tier 2 & 3 cities as well. The consumption drive would be fueled in smaller towns and cities.

There would be definite customer responsiveness towards Value Added products and services in the next few years. Since value retailing touches the mass of the population, and with organized retailing at about US $ 300 billion at present, value retailing has the scope to almost double.

 

fibre2fashion:Can you do meaningful transactions on the Internet?

Mr. Kishore Biyani I believe that inspite of online retailing being in its infancy in India, it could provide a

completely new dimension to retail.

There is a new and fast emerging population of customers called ‘Netizens’ who are spending more time in front of their PC’s. They are increasing by the day and are the ones

who prefer to transact and communicate over the internet.

We looked at this opportunity and hence our likely foray in the E-tailing space.

 

fibre2fashion:What do you include in your coverage area? What issues and trends bind them together?

Mr. Kishore Biyani All our lines of business are consumer centric and I believe that if we are to be in the larger

consumer space, we would need to keep changing, evolving and accordingly be flexible in our business plans. Consumers are the same everywhere; we are only bound by our social systems. Their desires, greeds and needs are similar. The value for money proposition is so ingrained in the Indian consumers mind that he needs to be shown true value all the time. Therefore, all our current and future businesses would necessarily have the common denominator as the consumer.

All our alliances and relationships with many company’s have been built, keeping the synergies of business and consumer offerings in mind.

 

fibre2fashion:How do you go about inspiring your employees to do their best?

Mr. Kishore Biyani The entrepreneurial culture and spirit prevails in the company, whereby the appetite for taking

risks is encouraged. We believe in learning while doing, and this what has helped us on our journey. We do not believe in any rigid organizational structure and instead prefer an organization design approach.

Our employees are completely empowered individuals who are encouraged to think out of the box, use scenario planning as a tool for quick decision making, adopt design management as an approach which requires an individual to use both sides of the brain while evaluating business propositions, etc.

We have been recognized as the most preferred employer in the retail sector. We employ close to 10,000 people and recruit nearly 500 additional people every month. We follow the Balanced Score card approach; a very critical strategic tool while evaluating an individual’s performance.

 

fibre2fashion:What is it that you enjoy most about being in this line of business?

Mr. Kishore Biyani That in our business, customer decides your fate. To observe them shop and evolve excites

me. I firmly believe that consumption= development and retail will play a role in accelerating India’s economic growth, and that I want to play a role here. Besides, providing employment opportunities to hundreds also gives me satisfaction.

 

fibre2fashion:What was your biggest break in the retail business?

Mr. Kishore Biyani There have been pleasant and not so pleasant moments in my journey so far, but we have

learnt from our mistakes and celebrated our successes. I consider two or three moments as memorable to me. Firstly, the company’s entry into organized retailing with the first Pantaloon store at Gariahat, Kolkata.Secondly, the acceptance of Big Bazaar as a fashion value format by the Indian consumer, across India.The third possible break for us a company, was when we ventured into cities and towns like Sangli, Durgapur, Nasik and were surprised to see the rising consumerism there, which made me believe that retail is not just an urban phenomenon.

 

We express our sincere appreciation on behalf of Fibre2fashion for taking out your valuable time and thank you for expressing your views.

Published on : 27 Mar 2006

 Home > Face 2 Face

   Interview - pantaloon

Guess what? 3 million square feet of retail space spread across 25 cities where 12 crore Indians will shop this year!

This is Pantaloon Retail (India) Limited, (a Pantaloon Knowledge Group Company) - India’s face of

organised retail business.

Presently, in to five lines of businesses – fashion and footwear, food, general merchandise, leisure & entertainment and home – the company operates multiple delivery formats : the fashion store format under the Pantaloons brand; the showcase seamless mall under the Central brand; the hypermarket discount store format under the Big Bazaar brand; the food & grocery retail format under the Food Bazaar brand, and apparel stores under Fashion Station.

The Company plans entry in telecommunications retail and other lines of businesses such as wellness and beauty as well as books and music, besides pantalooning a portal for e-retailing in the near future as another delivery format.

A retailer by karma and a nationalist by dharma, Managing Director of Pantaloon Retail (India) Limited, Kishore Biyani prides in being Indian and advocates ‘Indianness’ as the core value driving his company. He also stresses on the importance on continuous “Introspection” and is a firm believer in learning, unlearning and re-learning all the time. His passion is ‘observing’ and he enjoys watching Hindi drama and cinema. He is a compulsive reader.

Kishore Biyani shares his views on Pantaloon and the Indian retail sector on Face2face.

fibre2fashion:Where do you stand in the retailing sector?

Mr. Kishore Biyani India is still in the nascent stage of organized retailing and is constantly evolving. Pantaloon

Retail (I) Limited is a front runner in India’s modern retail space and we represent fashion ,food, general merchandise and other lines of business, through multiple delivery formats, primarily catering to the lifestyle and value customers.

The company has stores in nearly 30 cities across the country, constituting over 2.7 million square feet of retail space. The company has also signed close to 10 million sq. ft. of retail space to be operational by end 2008, which represents 20-30 % of all modern retail space coming up in the next three years. Over 200 million footfalls are expected in our stores by 2006-07.

I believe that consumption will be the next big driver of India’s economic growth. Rising incomes and increased exposure to global products and global consumption patterns have changed the average Indian’s attitude towards consumption and savings. Consumption = Development. Increased and channelised consumption would lead to the development of the nation through improved and better infrastructure facilities, greater employment generation possibilities will emerge with increased consumption, leading to people wanting to spend more on themselves. This cycle is what will fuel the consumption boom in the country.

 

fibre2fashion:What are the other retailing/non-retailing areas you are looking at?

Mr. Kishore Biyani We are in the process of constant evolution and firmly believe in creating the present, with

the future in mind. We have only one vision-to capture the highest share of the consumers wallet.This is what has led us to believe that apart from our core strengths in fashion, food and general merchandise, we will operate through various formats in other lines of businesses; complete home solutions, leisure & entertainment, wellness, communications and financial products.

We also have two AMC’s. One that specializes in Property and the other is a ‘Consumer India Fund’. The property fund aims at sourcing high quality property at the lowest possible rates, while the consumer fund will look at providing our retail pipeline and expertise to national and regional brands, thereby enabling them with a wider coverage.

 

fibre2fashion:Who are your major competitors? What is your share in the market?

Mr. Kishore Biyani We operate in a competitive environment. For each line of business, we would face

competition from established national and regional companies. In the fashion segment, we probably face competition from Shoppers Stop, Trent and Lifestyle. The hypermarket business is relatively new, being just about three to four years old in the country. We face competition from the likes of RPG (Spencer’s), Trent (Star India Bazaar) and with Shoppers Stop too indicating their entry into the hypermarket segment. In the Food business, we face competition from Subhiksha, Food World to name a few.

 

fibre2fashion:What is the market and mind share you are looking at in the next five years?

Mr. Kishore Biyani At Pantaloon we do not look at market shares. Though we have secured 30% of modern

retail space coming up in the next three years, our endeavour is to keep evolving with the young Indian consumer. As regards mind share, we want all our store formats to capture the imagination of the target customer.

 

fibre2fashion:What are the major trends retailers should expect this year?

Mr. Kishore Biyani In India, organized retail constitutes about 3% of total retail and is poised to reach 15-20% in

the next few years, which translates into a 40% CAGR. This indicates tremendous potential for the sector for the next few years.

The future will also see the pantaloon of several new concepts targeted at the Indian consumer.

Further, retail development will not just occur in Tier 1 cities, but will have far more significance in Tier 2 & 3 cities as well. The consumption drive would be fueled in smaller towns and cities.

There would be definite customer responsiveness towards Value Added products and services in the next few years. Since value retailing touches the mass of the population, and with organized retailing at about US $ 300 billion at present, value retailing has the scope to almost double.

 

fibre2fashion:Can you do meaningful transactions on the Internet?

Mr. Kishore Biyani I believe that inspite of online retailing being in its infancy in India, it could provide a

completely new dimension to retail.

There is a new and fast emerging population of customers called ‘Netizens’ who are spending more time in front of their PC’s. They are increasing by the day and are the ones who prefer to transact and communicate over the internet.

We looked at this opportunity and hence our likely foray in the E-tailing space.

 

fibre2fashion:What do you include in your coverage area? What issues and trends bind them together?

Mr. Kishore Biyani All our lines of business are consumer centric and I believe that if we are to be in the larger

consumer space, we would need to keep changing, evolving and accordingly be flexible in our business plans. Consumers are the same everywhere; we are only bound by our social systems. Their desires, greeds and needs are similar. The value for money proposition is so ingrained in the Indian consumers mind that he needs to be shown true value all the time. Therefore, all our current and future businesses would necessarily have the common denominator as the consumer.

All our alliances and relationships with many company’s have been built, keeping the

synergies of business and consumer offerings in mind.

 

fibre2fashion:How do you go about inspiring your employees to do their best?

Mr. Kishore Biyani The entrepreneurial culture and spirit prevails in the company, whereby the appetite for

taking risks is encouraged. We believe in learning while doing, and this what has helped us on our journey. We do not believe in any rigid organizational structure and instead prefer an organization design approach.

Our employees are completely empowered individuals who are encouraged to think out of the box, use scenario planning as a tool for quick decision making, adopt design management as an approach which requires an individual to use both sides of the brain while evaluating business propositions, etc.

We have been recognized as the most preferred employer in the retail sector. We employ close to 10,000 people and recruit nearly 500 additional people every month. We follow the Balanced Score card approach; a very critical strategic tool while evaluating an individual’s performance.

 

fibre2fashion:What is it that you enjoy most about being in this line of business?

Mr. Kishore Biyani That in our business, customer decides your fate. To observe them shop and evolve excites

me. I firmly believe that consumption= development and retail will play a role in accelerating India’s economic growth, and that I want to play a role here. Besides, providing employment opportunities to hundreds also gives me satisfaction.

 

fibre2fashion:What was your biggest break in the retail business?

Mr. Kishore Biyani There have been pleasant and not so pleasant moments in my journey so far, but we have

learnt from our mistakes and celebrated our successes. I consider two or three moments as memorable to me. Firstly, the company’s entry into organized retailing with the first Pantaloon store at Gariahat, Kolkata.Secondly, the acceptance of Big Bazaar as a fashion value format by the Indian consumer, across India.The third possible break for us a company, was when we ventured into cities and towns like Sangli, Durgapur, Nasik and were surprised to see the rising consumerism there, which

made me believe that retail is not just an urban phenomenon.

Kishore Biyani's Profile : 

Kishore Biyani is the Managing Director of Pantaloon Retail

(India) Limited and the Group Chief Executive Officer of

Future Group. He was born in August 1961.

Kishore is married to Sangita and has two daughters.

Kishore has won following awards and honors:

• 2006 Ernst & Young Entrepreneur of the Year award.

• 2006 Lakshmipat Singhania - IIM Lucknow Young Business Leader

award.

• 2006 CNBC First Generation Entrepreneur of the Year award.

Why Inflation rates are going high....I only want to say that why inflation rates are going high day by day. These tycoons are busy in expanding their business and making things goods. No doubt on them but the main reason is that take a simple example of Mobile bazaar or KB.what the cost comes to stand up this shop near about 80 K,But what the guys who are working in this branch are showing bill to company near about 1.5 Lakh ,which is near to double. Only because of higher managements they don’t know what the real cost are in market and without knowing any thing they pass the bills to company.

On the end of financial year when company collect the data that how much amount invested by company in mobile bazaar section its comes in Millions.

But with this what the company have to do increase some price in some other product to get fill the gap in Prises.

This is small example but think about all big organization. Even I have seen guys who are taking monthly expenses more then their salaries. Only coz on one has time to check and question them.

KB used to write in his book “Trust & Relationships.” But where is it.

And due to Inflation Rate High Is saw Kishor Ji giving statement on TV that he will request his all employees “ Ki aap log thora Baachat karyie”.

This is what the BACHAT.

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hitory of kishore biyaniKISHORE BIYANI - Chairman, Future Media

Kishore Biyani is the Group CEO of Future Group and the Managing Director of the group’s flagship company, Pantaloon Retail (India) Limited. He has led Pantaloon Retail’s emergence as the India’s leading retailer operating multiple retail formats that now caters to almost the entire consumption basket of a large section of Indian consumers.

Kishore Biyani led the company’s foray into organized retail with the opening up of the Pantaloons family store in 1997. This was followed in 2001 with the launch of Big Bazaar, a uniquely Indian hypermarket format that democratized shopping in India. It blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality. Subsequently, a number of other formats were launched by the company, including, Food Bazaar, Central, Home Town and online portal, futurebazaar.com.

The year, 2006 marked the evolution of Future Group, that brought together the multiple initiatives taken by group companies across the consumption space. Future Group operates multiple companies in the areas of retail, insurance, consumer credit, capital, mall and property management, consumer brands, logistics and retail media.

Future Group companies include, Indus League Clothing, Galaxy Entertainment, Future Capital Holdings, Future Media India Limited, Future Brands Limited, among others. The group’s joint venture partners include Italian insurance major, Generali, French womenswear retailer, ETAM group, US-based stationary products retailer, Staples Inc and UK-based Lee Cooper. It’s Indian joint venture partner include, Talwalkars, Liberty Shoes and Blue Foods.

Future Group’s vision is to, “deliver Everything, Everywhere, Every time to Every Indian Consumer in the most profitable manner.” One of the core values at Future Group is, ‘Indianess’ and its corporate credo is – Rewrite rules, Retain values.

Kishore Biyani was awarded the Lakshmipat Singhania-IIM Lucknow Young Business Leader Award by the Prime Minister, Dr. Manmohan

Singh in 2006 and the Ernst & Young Entrepreneur of the Year 2007 – Services. Pantaloon Retail was awarded the International Retailer of the Year 2007 by the world’s largest retail trade association, US-based National Retail Federeation (NRF). It was also the recipient of the Emerging Market Retailer of the Year at the World Retail Congress held in Barcelona in March 2007.

Kishore Biyani was born in August, 1961 and is married to Sangita and they have two daughters.

Kishore Biyani advocates ‘Indianness’ as the core value driving the group. The group’s corporate credo is ‘Rewrite Rules, Retain Values.’ He recently authored a book, ‘It Happened In India’ that captures his entrepreneurial journey and the growth of modern retailing in India. Considered to be a best-seller in its category, the book is now being translated in five regional languages.

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January 15, 2005Pantaloon's Kishore Biyani has become India's largest retailer, but still has several aces up his John Miller shirtsleeves.

In India's chaotic markets, Kishore Biyani is the unchallenged king of retail. He has the knack of catching rivals off-guard and striking where it hurts most.

And now that he's set himself the task of retaining control of the largest retail space in the country, he won't let anyone - suppliers or international promoters included - catch him slacking.

The latest to face the wrath of the 43-year-old is South African hypermarket Shoprite, which opened shop in Mumbai last month through a franchise agreement with local company Nirmal Lifestyle.

The hypermarket began retailing products from big boys Nestle [Get Quote], Unilever and Procter & Gamble at consumer discounts of 20-30 per cent, lower than even Biyani's purchase prices in his Big Bazaar and Food Bazaar stores.

Instead of chewing his nails, Biyani turned confrontationist, asking why the multinationals were offering Shoprite better prices, even withdrawing Nestle products from his stores when the company did not respond.

Two days later the Nestle products were back, but not before the company had clarified its stance. Says Biyani, "Shoprite is involved in predatory pricing. There are rules against this in every part of the world."

But as a result of his tough stance, the three MNCs have asked Shoprite to roll back the offers or face withdrawal of supplies, he says.

Pantaloon [Get Quote] Man

Unlike most people, Kishore Biyani makes no bones about his simplicity. He's the man you're most likely to ignore at the Pantaloon or Big Bazaar store, as he stands in a corner observing the way you shop. But make no mistake, what he may lack in sartorial style, he more than makes up through his observation powers.

You'll never catch him in a tie and jacket. He isn't a stickler for large cars, and has just graduated from driving a Honda City to a Honda Accord, though he's just as content driving around in a junior manager's Maruti [Get Quote] 800.

He is a strict vegetarian, and is currently off cheese and fried foods, but will otherwise eat anything that is green.

According to him, golf is a waste of time. Instead, he's addicted to a daily half-hour walk and does yoga twice a week.

He used to be a lawn tennis regular but gave it up citing lack of time. He can't understand the fuss about gyms and hasn't visited any.

Biyani loves films and has even produced some, but was never part of that industry. His personal preference is films by Guru Dutt, Yash Chopra and Sanjay Leela Bhansali.

He believes in taking quick decisions. The deal with Bennett, Coleman & Co was done in seven days flat. He has never met V Banga of Unilever in his life, and leaves the task of relationship building to his managers.

Instead he spends time with property developers - Sanjay Chandra of Unitech is a pal - merchant bankers and investment bankers.

Biyani's victory isn't unexpected. India's own Sam Walton (the legendary promoter of Walmart) is quick to seize any advantage. Which is why the denim manufacturer who quit the trade because "it wasn't creative enough" commands over 1.3 million sq ft of retail space.

But even size hasn't made a difference to Biyani's vaulting ambitions and he's on an even faster trajectory of growth. He's booked over 4.5 million sq ft of space across the country, and will utilise 3 million sq ft by this year's end in 23 Indian cities.

He will invest over Rs 200 crore (Rs 2 billion) to make this dream a reality. Says R S Roy, editorial director of the magazine Retail, which tracks the industry closely: "Mall developers have him in mind before they start constructing. His presence ensures footfalls and a premium for the mall."

Even Biyani concedes, "We have a store opening virtually every fortnight; I have lost count now of how many I have opened."

But don't let Biyani fool you. He keeps a close watch over his empire with the assistance of his two brothers, who are directors in the company.

He might have over 6,000 employees and 300 managers, but the buck stops only with him. Every time a store opens, managers have to rush daily reports for the first 45 days, and it isn't unusual for Biyani to be fixing any lacunae either over the phone or personally in the store.

Weekly targets are fixed and reviewed every Monday. The badshah of the bazaar jets between his stores across the country to "spend at least six or seven hours every week in the stores", he says. Even when he's in inspection mode, Biyani takes time off to cut more deals.

Last week he snapped up Indus League Clothing, a garments company in which he picked up 68 per cent equity for Rs 24 crore (Rs 240 million). The following day, he sold 4.98 per cent equity in flagship Pantaloon Retail to Bennett, Coleman & Co for Rs 70 crore (Rs 700 million)- a substantial premium on the prevailing price of the shares in the market.

Biyani hasn't always played in the big league. Having quit the family business, which supplied denim to Arvind Mills [Get Quote], in 1987, he collected Rs 7 lakh and set up a small plant that produced 200 trousers a day.

In the crowded market of readymades, Biyani learned his first lesson - to be heard, you need to shout louder than the rest. As a result, though the turnover for his Bare brand was only Rs 7 lakh in the first year, he spent Rs 16 lakh advertising it.

He also added John Miller shirts to his portfolio. This year, Pantaloon will spend Rs 85 crore (Rs 850 million) advertising its various store formats.

The shift from manufacturing to retail was the critical point in Biyani's career. Distribution costs were the reason brands were snuffed out in the market, so Biyani decided to rewrite the rules of the game.

In 1993, he experimented with a small store format, and Pantaloon Shoppe was launched in Panjim, Goa, "where we could make mistakes without anyone noticing them".

From the shoppe to the large store format in 1998 - this time in Kolkata ("If you can conquer Kolkata, you can conquer other markets too. Calcuttans, contrary to perception, have money and are loyal customers. They are emotional people and get emotionally attached to a brand.") - was a carefully crafted plot.

And he was proved right when the Kolkata Pantaloon store became a raging success and Biyani stepped on to the turf as a super retailer. 

Other professionals have wondered where Biyani picked up the tricks of the retailing trade. Some he learned from his own mistakes, he admits. Others he picked up from the big boys of international retail.

"I read every book on Sam Walton, Macy's, Marks & Spencer and management gurus like Tom Peters whose book 'Reimagine' impressed me." Even now he reads a management book every fortnight - Stephen Covey, Robert Kaplan or James Collins.

But unusual as it might seem, he also made it a point to stay away from these stores. The reason: "By going to a Walmart or a Macy's, you could get overwhelmed into thinking that was the best model and stop learning," he says.

That might sound like stunted logic, but Biyani already knew from Sam Walton that you needed to be merchandise driven (to concentrate on the product and the price) so operational efficiencies could follow.

Macy's was useful for understanding the importance of size and large store formats. Marks & Spencer reinforced the importance of building in-house labels and the obsession with quality. He picked up the idea of "mind to market" (see box) from Spanish retail giant Zara.

To translate theory into practice, Biyani took a leaf out of Walmart's book and appointed category managers. "We have over 150 product categories and each

is looked after by a manager who is responsible for its growth and profit," says Biyani.

In-house labels constitute 8 per cent of the turnover of food items in his stores, something he wants to up to 20 per cent by end-2005.

Similarly, Pantaloon also has its own manufacturing facility for garments, and 15 per cent of his fashion and garments turnover comes from there.

But the underlying message in books on retail strategy was the one thing India had been wary of -  big is beautiful.

Biyani wasn't above picking up the gauntlet and launched Big Bazaar, a hypermarket in Mumbai as a gamble, financing it mostly through a loan (the share price was so low he could not have raised equity). To India's surprise, the format worked and the rest is history.

Detractors now attack him and say he is growing too fast. "He is leveraging his balance sheet to expand, and that could be a problem if some formats fail, and his margins are under pressure - his net profit as a percentage of sales is only 3 per cent," says a competitor.

Points out another Biyani watcher: "You cannot have two or three Big Bazaars or Pantaloons in one area, which is why he is desperate about getting new brands like Indus League."

Others rise to his defence. Says retail equity analyst Sanjay Dam: "He now has a size where some failures of format will not make a difference. That explains why Bennett, Coleman & Co was ready to pay a premium on his shares." 

Biyani remains unperturbed by most comments. He points out that he does not negotiate less than 60,000 sq ft of space, using it to leverage rentals that are 60-70 per cent lower than what others pay in the same mall.

The volumes, he says, have ensured that, as in Walmart, 50 per cent of the store products are bought directly from the manufacturers, passing on the middlemen's margins to the customer. Other rules have been learned through a process of trial and error.

He will not increase the share of food and groceries to more than 25 per cent of the turnover because "that is the percentage of their salary that families spend on food. And margins in food can be as low as 5-8 per cent compared to 40 per cent in fashion wear."

The larger challenge has been to understand the diversity in customer behaviour where even Hyderabad and Bangalore are as different as chalk and cheese.

"Hyderabad is conservative, male dominated, where customers like loud colours and shop in groups," he says.

"Bangalore is modern, where customers want subtle shades and shop on their own." In fact, Biyani has turned the study of community behaviour into a fine science through a specialised regional diversity tracking system.

He goes personally to people's homes, talks to local community leaders and spends weeks walking streets of bazaars to get a feel of what products should be stacked in a new store. 

Biyani's current project is improving inventory management - though he replenishes entire stocks for grocery 30 times a year, and garments six times annually, he is not satisfied.

Explains Biyani: "This will be the key differentiator between the winners and losers because it reduces working capital requirement and improves return on capital." And if Biyani gets it right, his retail juggernaut could well be unstoppable.

Kishore Biyani is on to another idea, and he isn't letting go of it because it could change the face of the retail business. The goal is simple: to dramatically scrunch the time it takes from when a product is conceived to the time it takes to get to the stores. His target: 45 days flat.

In the world of fashion, it takes four-six months for an approved idea to make it to the stores. Biyani says that forecasting trends has too many variables and the chances of getting customer needs wrong are high. In such cases stores are stuck with huge unsold inventories.

"The aim of 'mind to market' is to respond to the demand of the market rather than try to forecast it months in advance," he says.

Pantaloon has already started pilot projects. In October 2004, the company detected a demand for trendier trousers. The company launched Fashion "F" Trousers based on this tip-off in December.

To cater to the demand, all departments - design (he has hired fresh design graduates to work with him), production, category managers, marketing and fabrication - came together on the project plan.

The team created a range of fashion styles and jointly agreed upon the fabrics that would be used, and the various price points at which the products would be launched.

Says Biyani: "We were able to put these trousers on the shelves of our stores all over India in 40 days."

At margins of 65 per cent, the pick-up offered great returns. No wonder Biyani's already on to the next project - he won't tell us the product though - where the lead time will be a meagre 22 days. Only Spanish retailer Zara's 15-day lead time is faster.

kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the Group Chief Executive Officer of Future Group. He was born in August 1961.

Kishore is married to Sangita and has two daughters.

Kishore has won following awards and honors:• 2006 Ernst & Young Entrepreneur of the Year award.• 2006 Lakshmipat Singhania - IIM Lucknow Young Business Leader award.• 2006 CNBC First Generation Entrepreneur of the Year award.

NEWSMAKER: Kishore Biyani

King of retail works his way towards a bright Future

Siddharth Zarabi / New Delhi January 25, 2008, 3:34 IST

Not content with just being called the king of organised retail in India, 47-year-old Kishore Biyani decided to venture into the financial services segment in 2005 by promoting Future Capital Holdings Ltd (FCH) along with 37-year-old Sameer Sain, a former managing director at Goldman Sachs International.

The company has three primary lines of business — investment advisory services, retail financial services and research.

Last week, FCH's maiden public issue closed with a subscription of around 132 times over the float size of 6.42 million shares.

The issue, which is expected to raise between Rs 450 crore and Rs 490 crore, has done well, especially in the light of the bloodbath the Indian stock market has witnessed since.

For market watchers, Biyani is now a trusted name, and that is perhaps why

Future Capital, a company with a limited operating history and results, was able to garner so much investor interest.

A plausible answer may lie in Biyani demonstrating the ability to rope in and delegate work, something that was held against him a few years back.

For FCH, he has put together an experienced management team including Dhanpal Jhaveri, former director at Vedanta Resources, Sanjiv Gupta, former CEO of Coca Cola (India and Southwest Asia), Rakesh Makkar, former Citifinancial India CFO and Roopa Purushothaman, the co-author of the "Dreaming with BRICS" paper.

At the board level, Biyani has roped in heavyweights — former Sebi chairman GN Bajpai and leading chartered accountant Shailesh Haribhakti — as independent directors. Like the key managerial staff, both Bajpai and Haribhakti have been granted stock options.

Biyani is now looking at hiving off Big Bazaar, the hypermarket format, which accounts for a majority of the flagship revenues. That is another hint of how far this strict vegetarian with vaulting ambitions has come.

He may continue to watch things closely, but the sheer pace and size of the expansion means that Biyani is now thinking out of the box to keep growing and besting competition. That includes the world's largest retailer Wal-Mart, which is entering the Indian retail space with the Bharti group.

Having sold the issue on the possibility of future growth prospects in FCH, all eyes will be on Biyani to deliver on the promise of the "unique and differentiated business model" of the company.

For the masses, this should mean a future in which a visit to the neighbourhood mall is not just about groceries and clothes, but also about buying life insurance, home loans and transferring money. In that, Biyani will have competition, from the elder Ambani brother, Mukesh, whose Reliance Retail is also believed to be looking at this business.

KISHORE BIYANI The Sultan of RetailSaturday, November 17, 2007Ronita Torcato

At the Retail Leadership Summit held on the occasion of the first ever India International Retail Convention (IIRC) 2007 in September in Mumbai, Kishore Biyani, Chief Executive Officer of the Future Group and Managing Director of Pantaloon Retail (India) Limited, had everyone's ears. But some years ago, the

company was viewed with scepticism. Biyani rarely spoke at industry programmes. But in less than two years the dark horse proved everyone wrong. Today, he is the numero uno retailer in India.

Back then he would tell anyone who cared to listen that he was looking for a desi model of retailing, and equally importantly, that he preferred " to do the thinking around here". Unsurprisingly, both professional managers and investors avoided him. But that was then. Today, Kishore Biyani sings a different tune: "The entrepreneurial culture and spirit prevails in the company, whereby the appetite for taking risks is encouraged. We believe in learning while doing, and this is what has helped us on our journey. "

Though it is one of the least developed sectors, the retail industry in India accounts for 10% of the GDP. And Biyani can now boast of five lines of businesses - fashion and footwear, food, general merchandise, leisure & entertainment and home - operated in multiple delivery formats: the fashion store format is the Pantaloons brand (opened 1997 in Calcutta); the food & grocery retail outlets are Food Bazaars( 86 at last count) , and apparel stores are Fashion Stations, the showcase mall is the Central brand ( as of June this year there were four Centrals and five Brand Factory stores, a chain of all year- discount stores offering national and international fashion brands); the hypermarket discount store is Big Bazaar ( opened 2001, today there are 56 BB stores in 43 cities, plans are on the anvil for 60 stores in 2008.)

Now, well-known financial institutional investors like Goldman Sachs and Citigroup Global Markets have picked up stakes in his firm. But back in 2001, when the first Big Bazaar opened, Biyani was in need of hard cash for expansion plans, but had just Rs 4 crore of profits. The share price was measly (Rs 18), and Biyani would have had to part with a lot of equity - his family and he holds 40% in Pantaloon today.

Biyani took a Rs 120-crore loan that pushed his debt exposure to as high as 1.5. If Big Bazaar hadn't worked, he would have been ancient history with BIG debts.

But Biyani's gamble paid off; today, his Group has a retail footprint of 5.2 million sq.ft. in across 42 cities and has also signed some 10 million sq. ft. of retail space to be operational by end 2008, representing 20-30 % of all modern retail space coming up in the next three years.

Last year Biyani scored a triple hat trick. He was named the Ernst & Young Entrepreneur of the Year in the Services Sector, the Lakshmipat Singhania - IIM Lucknow Young Business Leader and the CNBC First Generation Entrepreneur of the Year. For Kishore Biyani, the sky's the limit. To quote from their corporate manifesto, "We, in Future Group, will not wait for the Future to unfold itself but create future scenarios in the consumer space and facilitate consumption because consumption is development."

 

Two years ago, no one took Kishore Biyani seriously. His company, Pantaloon Retail, was seen as a one-man show. Biyani himself was regarded as unpredictable, and not a long-term bet. Today, he is the biggest retailer in India. In two years, Kishore Biyani has bounced back to become India's largest retailer. Here's how the maverick ignored conventional wisdom on retailing, and won.

By M. Rajshekhar

The makeover of 26, Residency Road is almost complete. On this Thursday morning, Bangaloreans walking down this tree-lined avenue slow down to stare at the megalith that has replaced the old Victoria hotel. It's a sharp, new mall. The sort with escalators and huge grey metal flanks clamped to the walls outside.

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All around it, people are zipping around in what can only be termed as desperate hurry. Labourers are clearing the dirt from the cobblestones that surface the driveway. Nearby, a mason is relaying a slab at the fountain.

 

Truckloads of merchandise are arriving. Most onlookers take all this in, correctly conclude that the store is about to open, and walk on.

Other, more observant, watchers notice a somewhat nondescript man sitting on a ledge between the fountain and the steps that lead up to the mall. He doesn't seem to be doing much. Every few minutes, he pulls out a cellphone - one of three he carries - to ask about the latest election results, and how the stockmarkets are doing. For, on this Thursday morning, the final election results are being tallied, and it looks like the Congress might win after all. But there are more interesting sights that engage everyone's attention, and the man escapes most people's scrutiny.

That seems to be something of a running motif throughout Kishore Biyani's life. Ask people who India's largest retailer is, and chances are they will say B.S. Nagesh of Shoppers' Stop or RPG Retail's Raghu Pillai. And yet, it is Biyani who is the largest player in the Indian market today. This June, when he announces the 2003-04 results of his company Pantaloon Retail, his topline will be about Rs 650 crore. A clear Rs 100 crore more than RPG's, the second largest player in the Indian market. Shoppers' Stop is in third place with revenues of Rs 400 crore.

Back in 2002, when Businessworld last wrote about him, the 'bania' from Mumbai was in much the same position as the Congress Party was before the elections. No one took him seriously. Biyani hung around the periphery of the retail industry, which was dominated by personalities like the suave Nagesh, unlike whom, he was taciturn to the point of being tongue-tied. He fidgeted constantly during formal meetings, which made the task of carrying out any serious conversation with him quite an ordeal. Little wonder, he seldom received invitations to speak at industry seminars.

No one quite liked him either, because the man strongly believed - and said so bluntly - that his peers in the retail business were mere copycats. "Most Indian retailers tend to blindly copy from Western models. I am looking for a pan-Indian model of retailing," he would say to anyone who cared to listen. His search for the ideal model also meant that he took colossal risks - something that scared away most financiers used to dealing with more conventional businessmen. On top of that, Biyani made no bones about the fact that he liked to run a one-man show. "I use people as hands and legs. I prefer to do the thinking around here," he once famously said. As a result, both professional managers and investors avoided him. And few people gave him any chance of succeeding.

Between then and now, a lot has changed. Biyani has moved centrestage. Today he has three highly successful retail formats: the Big Bazaar hypermarket; Food Bazaar, that straddles the food and grocery business; and his original Pantaloons apparel stores. The property opening in

Bangalore is his fourth model, a mall called Central. By the end of next year, he expects to have 30 Food Bazaars, 22 Big Bazaars, 21 Pantaloons and four Centrals. Right now, he has 13 Food Bazaars, 9 Big Bazaars (the 10th is opening next week in Nashik), 13 Pantaloons and one Central. Between them, Biyani's stores occupy 1.1 million sq. ft of retail space. By the end of next year, they will occupy 3 million sq. ft.

With the opening of Central, Biyani says his portfolio is complete. Even as his competitors like the Rahejas (who own Shoppers' Stop) embark on new formats (food and grocery), Biyani says that his appetite for experimentation is now sated. "I will no longer try out newer formats. My focus will be to consolidate our operations." Don't take him too literally, though. What he means is that he will continue betting on new opportunities ranging from gold to car accessories, but not on quite the same scale as, say, his first Big Bazaar or his first Food Bazaar. Instead, he will concentrate on ramping up each of his four main formats.

Drawn by his growth, in the last two years well-known financial institutional investors like Goldman Sachs and Citigroup Global Markets have picked up stakes in his firm. And when the stockmarkets looked buoyant just a few weeks before the poll results, the Pantaloon stock was among the best performing on the BSE. It quotes at Rs 311 today, up from Rs 51.25 a year ago. Things are going so well now that Biyani has stopped talking about selling out to foreign retailers when they come in.

"Things have really fallen into place in the last two years," he says. It is noon, and we are walking through the mall. Inside, the whole place is a mess. There are less than 30 hours to go before Bangalore's newest and largest mall opens for business. And, so far, nothing is in place. The escalators are not working. The shelves are still coming up. The merchandise is still coming in. The stuff which has come in hasn't been unpacked yet. Cardboard cartons, plastic sheets lie everywhere. And yet, there is something oddly relaxed about Biyani's demeanour. He wonders about the stockmarket. Why is it rising? Can Manmohan Singh be the next PM?

Perhaps Biyani is in an unusually good humour because he knows that the chaos will settle down soon enough. Just like it has with his entire business. A big factor, he says, was Big Bazaar Mumbai. The format was a huge gamble, says Bala Deshpande, who served as ICICI Venture's representative on the Pantaloon board. Around 2001, when the first Big Bazaar opened, Pantaloon's topline was Rs 180 crore. The company needed money to expand, but had just Rs 4 crore of profits. The share price was low (Rs 18), so it could not have raised much from the bourses. Biyani would also have had to part with a lot of equity - his family and he hold 40%

in Pantaloon today. Biyani took a Rs 120-crore loan that pushed his debt exposure to as high as 1.5. If Big Bazaar hadn't worked, he would have ended with huge debts and a loss.

But, as it turned out, the store clicked. In week one, the first Big Bazaar store pulled in over a lakh customers, and did a crore in turnover. By the end of the first year, Biyani had opened three more Big Bazaars. Riding on the hypermarket, Pantaloon saw its turnover of Rs 286 crore (2001-02) climb to Rs 445 crore (2002-03). Investors began to take notice. They also became more comfortable with the idea of him being a maverick. Says Biyani: "Investors look for growth. And there are not many growth stories in Indian retail. Most companies are growing very slowly."

 

It helped, also, that around the same time, Biyani began to pay a lot more attention to what the investors wanted. Says Deshpande: "As the new investors came in, they told him that he needed to delegate in order to grow." And so, he went on a hiring spree. Biyani pulled in the head of Globus, Ved Prakash Arya, to handle operations; Jaydeep Shetty from Inox to create new brands; Sanjeev Agrawal to handle marketing; Kush Medhora from Westside to look after new store rollouts; Ambrish Chheda came in to look after Food Bazaar and handle business development; Bina Mirchandani came in to look after the merchandising; V. Muralidharan came in from Lifestyle to head Central...

Persuading the professionals wasn't easy. Take Kush Medhora.

Ved Prakash Arya At Food Bazaar, Mumbai: Like the former head of Globus and current Pantaloons COO, many professionals are not averse to working with Biyani now

 

Initially, he didn't want to join. "I thought the company was unprofessional from the way the first few stores looked. I had also heard that the company was a one-man show." But during the job interview, Biyani told him he wanted to abdicate everything except strategic planning and the selection of new locations. That helped Medhora make up his mind.

There is probably another reason why Medhora joined. He enjoys the adrenaline rush. His job, opening new stores, keeps him on the road for 220 days in a year.

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Pantaloon Retail

Pantaloon Retail (India) Limited is India's leading retailer that operates multiple retail formats in both the value and lifestyle segment. Pantaloon has ushered a retail revolution in India and its founder Kishore Biyani is known as India's "King of Retail". Pantaloon's headquarter is in Mumbai. The company currently operates over 5 million square feet of retail space and has plans to increase it to 30 million sq. ft by 2011. Pantaloon has plans to open over 3000 new stores by 2010.

Pantaloon's origin can be traced to 1987 when the company was incorporated as Manz Wear Private Limited. The company launched Pantaloons trouser, India's first formal trouser brand. In 1992, Pantaloon launched its IPO. In 1994, The Pantaloon Shoppe - exclusive menswear store in franchisee format was launched across the country. Pantaloon started distribution of distribution of branded garments through multi-brand retail outlets across the nation. In 2001, Big Bazaar, India's first

hypermarket chain was launched. In 2002, Food Bazaar, the supermarket chain was launched. In 2006, Future Capital Holdings, the company's financial arm launched real estate funds, "Kshitij" and "Horizon" and private equity fund "Indivision". The company is also planning forays into insurance and consumer credit.

Pantaloon Retail is the flagship company of Future Group. The lines of business of Future Group are:

E-commerce: Pantaloon's website Futurebazaar.com has revolutionized the e-commerce business in India. It offers a wide range of products at affordable prices. It has been named as Best Indian Website 2007 in the Shopping category by PC World.

Food: In food business, the group offers a host of options. Food Bazaar - a chain of large supermarkets; Brew Bar - a beer bar; café Bollywood - a national chain of eateries; Chamosa - a pan-Indian chain of snack counters, and Sports Bar - a bistro focused on the world of sports.

Fashion: The group offers a variety of options in fashion. Its brands include aLL, Blue Sky, Central, Etam, Fashion Station, Gini & Jony, Navaras, Pantaloons, and Top 10.

Home & Electronics: Options include: Collection i - a lifestyle furniture store; Electronics Bazaar - offers branded electronic goods and appliances; e-zone - trendiest electronics items; Furniture Bazaar - entire range of Home Furniture; Home Town - one stop destination for all the home needs.

Leisure & Entertainment: Options are: Bowling Co. - state-of-the-art premium family entertainment centre, offering multiple, novel and unique leisure and entertainment options; F 123 - offers a wide range of gaming options ranging from bowling and pool to redemption and interactive video games to bumper cars.

Wellness & Beauty: Options are: Health Village - a state-of-the art spa and yoga centre; Star & Sitara: Beauty salon for men and women; Tulsi - provides access to the best allopathic, ayurvedic and homeopathic medicinal products; Turmeric - offers beauty products like colour cosmetics, fragrances, herbal and specialty skin items, hair products and bath accessories.

Books & Music: Future Group's brand - "Depot" offers Books, CDs, and stationery items.

Major Achievements of Pantaloon Retail Chosen as International Retailer for the Year 2007 Chosen as Emerging Market Retailer of the Year 2007

Best Employers in India (Rank 14th) in the Hewitt Best Employers 2007 survey.

Best Managed Company in India (Mid-cap) for the year 2006. Won Images Retail Awards 2006 for Best Value Retail Store, Best Retail

Destination, and Best Food & Grocery Store.

Note: The above information was last updated on 21-07-2007

 

It Happened In India by Kishore Biyani Our PriceRs 99.00 *USD 1.93

Usually ships within 48 hours

Bind : PaperBack   Date of Publication : 2007 Publisher : Rupa   ISBN : 81-291-1137-3   *  Dollar prices are indicative only and calculated on the date of exchange

Description:

Blue-blooded entrepreneurs could not stand his cheek, conventional managers were baffled by his business logic, and his own colleagues were aghast at his recklessness. A maverick of the industry, Kishore Biyani followed his nose, cashed in on the latent opportunities of the booming Indian consumer market, and transformed the retailing business in India with the 'bania-company' that even hardcore punters at Dalal Street had been afraid to touch!

One of the most versatile entrepreneurs, Kishore Biyani has played many roles - a trader, a failed film maker, a dance festival organizer and an innovative retailer - on his way from being an iconoclast to being a leader in the pre-defined game of bulls and bears.

"It Happened in India" tracks the story of this irreverent entrepreneur, who wrote his very own success story based on the firm belief in exploring the Indian way of business, an uncanny insight into the mind of Indian consumer and a simple philosophy - Rewrite Rules, Retain Values.

Author Profile:

Born in a middle class trading family, Kishore Biyani started his career selling stonewash fabric to small shops in Mumbai. Years later, with the launch of Pantaloons, Big Bazaar, Food Bazaar, Central and many more retail formats, he redefined the retailing business in India. Customers who bought this book also bought:

 

Keywords:

Kishore Biyani, who three months ago was conferred “International Retailer of the Year” Award by the prestigeous US National Retail Federation (NRF), could truly be considered as the pioneer of multi-brand modern (organised) retail in India.

Born in a middle class marwari trading family, Kishore Biyani, began his career selling stonewash fabric to small shops in Mumbai. After having a brush with film making and festival organising, he went on to launch Pantaloons, the biggest listed retailer of the country, today.

Pantaloons is credited with launching many retail formats in value and lifestyle retailing under some of the best known retailing brand names in the country, including Big Bazaar, Food Bazaar, Central, e-zone, and Home Town.

While, most successful men and women write their biographies post their retirement, Kishore Biyani has gone ahead with writing his biography, “It Happened in India,” if one could say so, at the beginning of his retailing career.

“It happend in India” is the story of this maverick entrepreneur’s experiments with exploration of business the Indian way, his uncanny insight into the mind of Indian consumer and his simple philosophy of - Rewrite Rules, Retain Values.

As expected, the book even before being widely available, has become a success story in its own right. According to media reports, while 10,000 copies (largest ever for an Indian book) of the book have already been sold on the day of its launch, the publishers are also confident of selling the initial lot of 30,000 books in a few days. In another first in the history of publishing in India, this is the first indigenous book which has had a print run of 200,000 copies.

The book in a true Kishore Biyani style has been priced at Rs 99/- only for soft cover, while the hard cover price has been fixed at Rs. 495/-. The book, which has been co-authored with Dipayan Baishya, is currently available for sale in a few Big Bazaar and Depot stores in Mumbai and Pune and can also be ordered online at Futurebazaar.com.

Tags: Kishore Biyani (Future Group) · Brands/ Strategy