To start with
Who is Kishore Biyani – Born in 1961 to a business family, was average student and was more interested in the practical aspects of learning, which were not available in the academic setting. From his childhood, he showed interest in organizational skills , be it local dandiya festival or selling stonewash trousers. If you are a student and you see a person wearing a stonewash trouser , immediately you would enquire the outlet / source of the garment. Kishore Biyani was interested in the business side of the garments. He would immediately source the cloth, order the stonewash trousers from a local factory and sell them at a profit. He never wanted to enter the family business as it looked like the family members were preservers than entrepreneurs. They were obsessed about financial status that it looked like accountants were running the show. He considers himself as creator and destroyer of businesses rather than preserver of businesses.
Failures – Imperative for success
After the stonewash success, Kishoreji tried his hand at various businesses and most of them ended up as disasters. Started Dhruv Synthetics, a manufacturing plant which had a brief history only gave an immense knowledge to Kishoreji. I keep debating with my friend about the need to do such ventures as it would give valuable experience. There are umpteen number of gaps that indian consumers would ideally want to to taken care of. If every entrepreneur goes ahead and tries to work on these gaps, may be 9 out 10 will end in a disaster but the 1 which will be a hit will more than compensate for everything. Kishoreji also tried his hands in the export business, movie making business and all ended up in a disaster. He could have buckled and gone back to the family business. But he didnt . His focus on building a business which would appeal to a large customer base made him search and explore one business after another,
First Startup Success
Manz wear was the first company which showed potential and immediate profit in the first year of its operation itself. It was started with a initial capital of 7 lakh, made a sales revenue of 32 lakh but reported a loss of 8 lakhs. This was primarily due to the heavy advertising expenditure of 16 lakh. The focus on Kishoreji’s branding efforts is really commendable. When you have failed at so many businesses, how many of the entrepreneurs would spend 50% of your sales revenue on advertising. But that was how Manzwear aka Pantaloon Retail worked. and it worked damn well. There was always a Plan B for Kishoreji as a distributor of denim garments. At various points of his career, he depended on the cash flow from the distribution business when his startups didn’t work well. Pantaloon Stores were positioned as destination stores through out the country where one could get an array of garments.
Meanwhile, there was a lot of competition coming in from Shopperstop, Globus, etc were entering the market. Hence pantaloon wanted a different format for its business. The franchise model was not suited for the retail environment and thus Pantaloon decided to go all by itself. This first mover advantage coupled with renting the real estate space gave them an edge. Managing to keep the retail cost to <5% of total sales was Kishoreji’s strategy and he pretty much managed it with out any problem.
The start of Big Bazaar proved to be the inflection point for the group. The whole concept looks like "the walmart of India". However the similarities end there. Retail has always been a local knowledge intensive business and Kishoreji’s experience and smartness was visible to everyone. There are many interesting aspects of Bigbazaar that one comes across :
- Sabse sasta din Jan 26 – Parallel to the thanksgiving day in US. In 2007. Big bazaar made 125 crores of business from its 43 locations on sabse sasta din offer
- Shamelessly copied instore operations from saravana stores in chennai.I guess the strategy being, if something works and will work for you, dont think twice before copying
- In store appearance to reflect indian shopping experience – mandis and U type product placement rather than long aisles
- Use Fake 100 rupee note for promotion
- Use vernacular catch lines rather than hinglish type of oneliners
- Paint the city of calcutta with so many hoardings that people sometimes think that Kishoreji belonged to kolkata
- Backup plan and prototyping of various customer formats
- Exchange offers
Lessons one can learn from Kishoreji
- Simplicity , Humility and Willingness to learn are the three assets of an entrepreneur
- Follow cultural changes in the society , Follow people’s spending , traveling and entertainment patterns
- Value relationships than anything else
- Confidence and Change are Driving Indian Consumption and Indian Consumption will only head one way – North
- Abdicate rather than Delegate is the leadership mantra followed by Kishoreji, where by abdication would give rise to micro entrepreneurship in the enterprise
- With organized retail slated to reach 235 Billion in 2015, Sky is the limit for Kishore Biyani,
- Focus on Branding, Marketing and Advertising
- Take Quick decisions
- Micro entrepreneurship in an enterprise is the key
- Dont bargain with people. See to it that they quote one price and you say YES / NO
- Emphasis on Design Management
- Storytelling skills are very important in today’s creative economy
Overall a fascinating read of one of the successful retail raja’s of the country.