On 26 January 2001, at 5:00 am, thousands of people came out on the streets of Mumbai. Despite all the efforts of the police, these people wanted to enter a particular building by removing the barricades and jumping over a wall. This particular building was India's favorite shopping destination, Big Bazaar.
That day, a mega sale called ‘Sabse Saste Din’ was going on in Big Bazaar, and Kishore Biyani's Big Bazaar earned ₹30 crores in just this one day. But what happened in the next 20 years that every store of Big Bazaar got closed down? Let's find out in this video.
The story begins in 1981. Kishor Biyani was in his final year of college and his father wanted him to join the family business. However, he did not want to limit himself by joining the family business.
He wanted to build something big in life. During this time, Kishore Biyani saw that one of his college friends was wearing fashionable trousers made of a very unique fiber. It was stone wash fabric and he saw a lot of potential in it.
He immediately bought 200 meters of stone-wash fabric from Jupiter Mills and started selling it to garment manufacturers in the city. In the next 6 months, he had done business worth lakhs and from here his entrepreneurship journey had started. By 1985, Kishore Biyani was not only selling fabric of his own brand but he also opened his own store to sell readymade trousers, and named it 'Patloon'.
After 2 years, he started a men's wear company by investing ₹7,00,000 in which he started manufacturing trousers himself and named his new trouser brand Pantaloon. His idea behind the name Pantaloon was to make the word 'Patloon' trendy and modern. Hence 'Patloon' became Pantaloon and later the name of the company was also changed to Pantaloon Retail.
The design of Pantaloon's trousers was quite futuristic like one of their trousers had three buttons above the zipper and the trousers were quite high-waisted. Due to such modern design, Pantaloon's trousers became quite popular. By 1994, Pantaloons had opened 72 franchise stores across India, and apart from trousers, they had also launched products like shirts, jeans, ties, and socks.
During this time, Kishore Biyani noticed that the trend of large-format retailing was increasing in India. Basically, big retail stores like Shoppers Stop were opening which were many times bigger than a normal showroom in size, variety, and quantity. So he also opened Pantaloons' first large-format retail store in Kolkata.
This store was 10,000 square feet and was the largest store in Kolkata at that time. He also brought the concept of visual merchandising in the store in which customer communication happens through colors, signs, lighting, and the look and feel of the store, and ultimately a pleasant shopping experience is given. Also, along with menswear, women's and children's wear were launched in this store.
Everyone thought that opening such a big store for garments was a big mistake but on the very first day, there was so much crowd that everyone's opinion was proved wrong. Seeing this early success, by 1999 Pantaloon had 13 mega stores, and now Kishore Biyani had become the fashion retail tycoon of India. But he was not going to stop now.
He saw that customers spend only 8% of their total expenditure i. e. their total wallet on clothing and if they have to capture 50% wallet share of the customer, then they will have to diversify in other items apart from clothing.
During this time Kishore Biyani visited the Saravana store in Chennai. This store was 25 years old, had 5 floors, and every item like clothes, toys, jewelry, appliances, and groceries was available there. Sarvana's model was to sell a lot with low profit margins.
According to Kishore Biyani's estimate, this one store had a sale of ₹200 crores in a year. He studied the store deeply and took inspiration from it and decided to start his own hypermarket, and this hypermarket later became Big Bazaar. Before establishing a successful hypermarket, Kishore Biyani studied the local markets of India in detail.
He observed that the psychology of the average Indian consumer was that shops that look modern and high-fi are expensive, due to which the average customer felt comfortable shopping in local markets where both the shops and the shopkeepers were very simple. That is why Kishore Biyani named his hypermarket Big Bazaar so that people could instantly connect with the word bazaar. He designed the Big Bazaar store in such a way that it looked like a combination of multiple shops in one building, just like in a market.
He also believed that a salesman should never look smarter than the customer, so he hired such salesmen who could be easily approached by a common man and the uniform of these salesmen was also kept very simple, for example, the salesmen of Big Bazaar never wore a tie. Finally, the main idea of Big Bazaar was that the customer should get the cheapest and the best products here. Keeping these strategies in mind, the first 3 stores of Big Bazaar opened in Kolkata, Bangalore, and Hyderabad in 2001.
Like Pantaloons, these stores became very successful. They were 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 much bigger than this.
He saw in research that an average customer visits a maximum of 4 to 5 shops in a shopping mall, after which he does not want to go to any other shop due to fatigue. That is why Kishore Biyani thought of a mall in which there are no walls between the shops. In this concept, the customer will get exposure to multiple products and brands at once and he will not have to go in and out of the store again and again.
Kishore also wanted to make this mall a destination mall, meaning a mall that would not just be a place for routine shopping but would itself be a major attraction of the city, and would offer visitors food, shopping, entertainment, and specialized attractions. He named his new mall concept Central. And in 2004, the first Central Mall was opened in Bangalore in a space of 1,20,000 square feet.
This mall had more than 300 brands of clothing, footwear, accessories, home furnishing, music, and books. Along with this, there were coffee shops, food courts, restaurants, and pubs. People could book tickets for movies, concerts, and even traveling here.
Central Mall soon became a major attraction of Bangalore, and seeing this, Central started expanding rapidly in many cities like Hyderabad, Pune, and Kolkata. In 2006, Kishore Biyani started an umbrella company named Future Group to effectively manage all his companies. With businesses like Pantaloons, Big Bazaar, and Central and revenues of thousands of crores, Future Group had become a giant in the Indian corporate space, and Kishore Biyani was the undisputed czar of the Indian retail industry.
But now a very big and long downfall was about to begin in his story. Kishor Biyani said that he would enter every such business where there is direct dealing between the business and the customer, and this philosophy of his led to his downfall. In 2005, he bought three apparel brands one after the other.
At the same time, he started diversifying in different areas, like in 2005 itself, he started ALL i. e. A Little Larger.
This brand used to sell plus-size clothes. Then he started Gold Bazaar inside Big Bazaar to sell gold. He started the Home Town brand for building and renovating houses.
In 2006, he started Depot to sell books. He even started kiosks called ‘Chamosa’ to sell tea and samosas. Basically, from the tea business to the business of building an entire house, Kishore Biyani was present everywhere.
But this was just the beginning. In 2007, he started Future Capital Holdings and entered financial services like wealth management and real estate broking. Along with this, he also entered the life insurance and general insurance industry by starting Future General Insurance Company.
From the outside, it seemed that Future Group's business empire had become very big and successful. But they had not done such a rapid expansion with their own money. For this expansion, they had taken a debt of thousands of crores.
He hoped that he would manage this debt based on strong sales. But then came the global financial crisis in 2008. Consumer spending decreased and Future Group's sales crashed.
Just to sustain the business, Kishore Biyani had to take more loans. By 2012, he had a debt of about ₹12,000 crores and it was becoming difficult for him to pay the interest on it. So Kishore Biyani had to sell Pantaloons for ₹1,600 crores with a heavy heart.
Along with this, Future Capital was also sold for ₹4,250 crores. Kishore Biyani's biggest problem was that he did not make any one of his businesses massively profitable before expanding into other businesses and did not maintain sufficient cash reserves to deal with a crisis. So he had to sell one of his businesses that was closest to his heart.
To avoid such situations in my life, I maintain a minimum 6-month emergency fund in fixed deposits, and for this, I have recently started using Stable Money. Normally, FDs offer an interest rate of only 6 to 7%. But through Stable Money, you can compare the interest rates of 200 plus Indian banks and you can get an interest rate of up to 9.
1%. This fact was an eye-opener for me. If you do FD through Stable Money, you do not have to open a savings account with any bank.
Secondly, your money goes directly to the bank, Stable Money does not store your money. Plus, you can withdraw your money anytime, and your money will be in your bank account in just one day. The best thing I liked is that all the banks in Stable Money are RBI registered, and your amount of up to ₹5 lakh is insured in every bank.
God forbid, at the time of a crisis, if you want to keep yourself and your family financially secure, then maintain an emergency fund today through Stable Money that is inflation-beating, secure, and easy to withdraw. Also, I came to know that this is the best time to open an FD because the interest rates are very high right now. Already 5,00,000 people trust Stable Money for their FD and you can too.
So right now open an FD through Stable Money from the link given below in the description or the pinned comment. Kishor Biyani thought that the money he got by selling Pantaloons and Future Capital Holdings would solve his problems. But then two very big competitors enter the story, Amazon and Flipkart.
In the last few years, both of them have shifted crores of consumers from offline shopping to online shopping. To compete with them, Kishore Biyani also started his own e-commerce website Big Bazaar Direct but it was too late by then. Amazon and Flipkart had already captured substantial market share and it was now impossible to compete with them.
Along with this, Big Bazaar Direct had many technical issues, customer experience problems, and inventory issues. Due to these reasons, Big Bazaar Direct proved to be a huge failure, and Future Group lost crores of rupees. But perhaps Kishore Biyani's biggest mistake was to compete with India's grocery shopkeepers.
In 2015, he acquired a small format grocery store chain called Easyday. At that time, Easyday had 190 stores, and Kishore wanted to open 10,000 stores by 2022 and replace Indian grocery shops. By 2018, 1,000 stores had already been opened.
To beat grocery stores, Kishore Biyani launched a membership plan called Easy Day Club in which by paying ₹1,000 a year, a customer could get a 10% discount from Easy Day on every purchase throughout the year. But his model failed completely. Firstly, the Indian customers did not want to pay in advance for the discounts they would get in the future.
Also, local grocery stores used to give 10-15% discounts without any subscription fee. Secondly, grocery shopkeepers always maintain a personalized relationship with the local population. They provide free home delivery and also give goods on credit.
But Easy Day was not able to match all these things. Finally, while the expenses of the grocery store on staff, rent, technology, etc. were negligible, Easy Day had to spend a lot on all these.
Hence, ultimately Easy Day started incurring huge losses and by 2020, many stores were closed. But the mistakes of Future Group did not end here. Kishore Biyani saw that other brands were earning profits worth crores by selling their products through his Big Bazaar and other stores.
They thought that if they launched their own brand products for the most selling items, they would benefit a lot. So they launched their own brand products in every category like snacks, home care, personal care, and staples. They planned to earn a revenue of 20,000 crores from these brands by 2022.
But almost all their brands flopped badly. They thought that just by keeping them on the shelf, their products would start selling. But the customer still wanted to buy the products of the same brands which they trusted for years.
Also, Future Group brands did not do anything different from the old established brands. They wanted to increase sales only based on discounts. Due to the discount, the customer tried the product once but did not make repeat purchases due to poor quality.
Due to all these mistakes, Future Group lost a lot of money and by March 2019, their debt had again increased to around ₹12,800 crore. But even after all this, Future Group was somehow surviving when something happened that shook Future Group to its core, COVID-19. Soon a nationwide lockdown was announced and Future Group's Big Bazaar, Central, and all other stores were shut overnight.
Their revenue crashed. The rent of the stores, salaries of the employees, and loan repayment got delayed. Due to non-payment of rent, the locations of Big Bazaar and other stores started getting snatched from Kishore Biyani, and these stores started shutting down.
Today, Reliance has opened its stores at around 800 of these locations. In 2022, the Bank of India sought insolvency proceedings on Future Group and to date, these proceedings are going on. Meaning even today Future Group's assets are being sold one by one to repay their debt.
There is no doubt that Kishore Biyani was a business genius. He created businesses like Pantaloons, Big Bazaar, and Central that revolutionized the Indian retail industry and also made him the retail king of India. But after this, he lost his focus and took loans worth thousands of crores to expand rapidly everywhere.
As soon as the market conditions worsened and the pandemic came, his business empire crumbled just like a sand castle. If you liked this video, then I would recommend you to watch this video next. Also, the link to Stable Money is below in the description and pinned comment.
