Future Group CEO Kishore Biyani is at it again. Known as as India’s Sam Walton, Biyani is in a process of turning his retail organisation into a consumer goods company which will even be engaged in distributing its own products.
Biyani said during a one-on-one interview with preeminent business journalist Govindraj Ethiraj at the India Retail Forum 2016.
“If you look at India’s growth story, we are merely a $3 trillion economy and if it is growing at 7 per cent every year, we are adding $200 million dollar every year and which is ultimately adding $1 trillion of economy every five years. Out of this $200 million of economy, $100 million is consumption economy and everyone wants to be the part of this consumption economy and growth. We envision to strengthen our position by manufacturing and distributing new products and entering new categories,” he said.
“Over the last few years, we have organised ourselves to turn into a very different company — from a retailer to a consumer goods company. We have been able to create multiple brands in the fashion side of the business. We are now creating lot of brands in the FMCG space and we are also looking at creating distribution for the brands we have made,” Biyani said at an IRF session.
Future Group, which currently has 45 own brands, including Jealous 21, Lee Copper, and Cover Story among others, in the fashion space. It is in process of coming up with more private label brands in the food and home category.
“With our own brands, we will be able to boost margins, improve revenues, and transition from being just a retailer to a consumer goods company,” he said.
“We are also investing in making a strong distribution of our own goods. They will be sold out everywhere, even out of Future Group’s store. Entering the consumer goods space is an interesting phase for us. We will be able to sell our products through any channel. Ultimately, we are de-risking our physical retail model in a way,” he added.
In the last two years, Future Group has made some big moves to expand its footprint. In 2014, it acquired 140 stores of the Bengaluru-based grocery chain Nilgiris. Last year, it invested in Bharti Retail’s Easyday, another chain of over 330 neighbourhood supermarkets. A third brand of supermarts that came under Kishore Biyani’s umbrella recently was KB’s Fairprice.
Earlier in August, Future Group was reportedly in talks to buy More, a chain of 500 supermarkets owned by Mumbai-based Aditya Birla Retail (ABR) that is focused on western India.
By 2021, Biyani plans to more than triple the company’s turnover from Rs 22,000 crore in 2015 to Rs 75,000 crore. He expects biscuits and soaps alone to earn him a sizeable Rs 20,000 crore by then.
The food and consumer goods business currently generates Rs 2,000 crore for the group.