Posted by: John Elliott | October 31, 2007

Fast growth – plus losses – in retailing

Kishore Biyani, founder and chairman of the Future Group, which is India’s largest and most successful retailer told us at the Fortune Global Forum yesterday about how he avoids clashes with old traders who dominate India’s current farm-to-shop distribution system.

He invites local wholesale traders who specialize in various fruits and vegetables to bring their produce to his Food Bazaar supermarkets and sell it themselves. That seems to have prevented them mounting the sort of opposition to his Bazaar outlets that has grown against the Reliance Fresh stores of the Reliance Industries (RIL) group. But other speakers on a panel at the Forum agreed that this was not a model that could be generally applied. Other groups would want to have more control over their stores and will have to find different ways of handling traders, who fear they will lose their jobs as supermarkets expand.

The general mood of the Forum session on India’s booming retail business was positive, including the prospects for foreign direct investment (FDI), even though it was agreed that there is no prospect of the government allowing FDI in on a broad basis before the next general election.

Meanwhile, foreign firms can operate franchises and invest directly in single-brand shops and wholesale cash-and-carry businesses, subject to case-by-case government approval. One of the speakers, Mr H.B. Lee, regional CEO of Samsung Electronics, seemed happy with the 100 franchised Samsung outlets that his firm has opened across India.

Earlier, in another Forum session, Sunil Mittal, chairman of Bharti Enterprises which has a tie up with Wal-Mart (WMT) for wholesale stores and logistics, warned that rising land prices mean that new retailers might have to bear losses for up to four or five years. Arvind Singhal, chairman  of Technopak, a Delhi-based retail consultancy, forecast that big-company retail would grow from 3.8% now to 16.7% in 2012 and 26.3% in 2017, by which time sales would have more than doubled. So there is a lot to play for.


Responses

  1. Dear Mr. Biyani,
    this was the complaint i had lodged @ ur so called homesolutions dept. which has been till now not attended inspite of our repeated complaints some monkeys Manoj, Vinod & hema who never gave any solutions for ur Home Solutions. so u hv taken my money & cheated, u r only gvng frustrations to people, if these kind of cases cum to light im sure ur business will nt run for long & we consumers promise that.

    Kind attn : Mr. Irresponsible Managers

    this is for ur info tht the purchases v’hv made fm u paying completely receipt no. 4138 has not been fixed propely & the receipt no.4162 is yet not fixed. ur service is very very bad, u should hv named & above all tht they had told at the time of purchse some free gift of a safety locker for every purchase of Rs.50000/ but nothing seems to be working, if this is the case take ur things bk & give us our money back, else i’ll go to consumer court & this is ur last chance. I hope this mail is enough to show my frustrations for the kind of home solutions u give. U take all our money & still not give the service u claim to be giving, kishore biyani has hired & gruop of cheaters to run his business same is the case with big bazaar. I’ll also be sending a CC to him which he has mentioned his mail id.


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