The story of Big Bazaar is a story of unbridled entrepreneurship, the courage of conviction, and the unending zeal for change and innovation. It is also a testimony to the new face of retail in India where now, a plethora of hypermarkets, supermarkets, departmental stores, shopping malls, and discount stores compete with another. A typical Big Bazaar store is seen as a one-stop destination for products belonging to a wide range of categories including food products, lifestyle, fashion, furniture, electronics, leisure, and entertainment. The retail space of these stores in metros can range between 50,000 square feet and 160,000 square feet. Since its launch in 2001 in Kolkata, Bangalore, and Hyderabad, Big Bazaar stores have spread across 80 towns and cities across the country over the past decade. Not surprisingly, Big Bazaar has strong competition to other major retailers in the domestic market such as Reliance, Tata Group, RPGGroup, and AV Birla Group.
Zealous Entrepreneur
Kishore Biyani, the founder of Big Bazaar, is a man of many moods. While he is passionate about knowing the Indian consumer, he is also fascinated by cricket and movies. A born leader, he has always preferred to chart his own course on grounds of logic and intuition. He has been described as an iconoclast who has not ceased to “Redefine Rules and Retain values”. He has drawn his lessons in consumer behavior by staying in touch with what is happening on the shop floor. This has helped him make some of the most pragmatic decisions as an entrepreneur. Additionally, he has steadfastly clung to his belief in the unmatched potential of Indian market, the advent of mass consumerism in the country, and the need to design new business models to meet this growing demand.
Consumer is the King
Kishore Biyani believes that consumer is the king. Post-liberalization, the Indian economy has witnessed an upsurge in consumerism. Three crucial factors – the 3Cs have given momentum to this trend. According to KB, Confidence” has paved way for “Change” which in turn has enhanced “Consumption” levels. Sustained economic growth over the past few decades has increased per capita income in the country. Further, thanks to changing demographics, nearly half the population is in the working age category. Rising education and income levels have encouraged people to change their fortunes for the better, which in turn has led to increased consumption. Consequently, new business models which can scale up rapidly are needed. This has given rise to large format retail epitomized by Big Bazaar. The model seeks to cater luxury and lifestyle needs of higher income segments as well as to bring value for money to lower income sections. Not surpriisngly, Big Bazaar is seen as one-stop shopping destination by many people.
Checkered Past
Kishore Biyani started his innings in textile industry, the lessons from which were later applied in modern retail. He began as garment manufacturer by setting up Mnaz Wear Pvt. Ltd. in 1987. The company was later renamed Pantaloon Retail. After gaining fair insight into the textile business, Biyani began to build his own brands in the market for men’s wear. Bare Necessities came up in jeans segment while John Miller developed as premium shirts brand. In order to increase outreach, Biyani entered into franchise agreements with local retailers. While new outlets did well, sales at old stores began to decline due to poor control on franchise partners. It was at this juncture that Biyani decided to foray in retail. He began to design a model which could offer value for money to mass consumers. He based his hypermarket format - Big Bazaar, on Sarvana Stores in Chennai.
Key to Success
Today Big Bazaar accounts for almost a third of food and grocery products sales through modern retail in the country. It has succeeded largely due to its emphasis on consumer behavior and understanding the diversity of Indian consumers. Further, it is products driven where the focus is on the front end to serve the consumers well. Additionally, the business model is based on low margin and high turnover. The shops offer products from numerous categories spread across multiple floors. The overall ambience is to treat shopping as a family experience. Further, these stores are situated near transportation hubs to attract maximum customers.
Promising Prospects
Indian retail industry in India is projected to reach US$833 billion by 2013. It is expected to grow at a CAGR of 10% over the next five years. The future indeed looks promising for large format retail such as Big Bazaar. Over 100 such stores have come up within seven years of its launch in 2001. In 2010, Big Bazaar won CNBC’s Awaaz Consumer Awards for the third year in a row.
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—About our writer:
Priya likes to read books, write articles and play Scrabble. As a professional Analyst, she has writtenbrief reports on stocks and industries on a quartely basis. She is pursuing Fundamental Certification Program in Technical Writing from 'The Writers Block' (TWB), Bangalore.
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