Future Group poised for a second try at e-commerce

Electronics segment to go online in October; Big Bazaar will go online, too, by year-end

Future Group is planning to launch its e-commerce platform in a phased manner, beginning October. This will be the group’s second attempt to foray into the online retail space. A couple of years ago, it had tried to enter this segment but without success. Others such as Reliance Retail and Walmart (through wholesale) are also venturing into e-commerce.

“By October, the electronics category will be online, to be followed by sports. By the year-end, the entire Big Bazaar store will be online across India,” Kishore Biyani, chief executive of Future Group, told Business Standard. Hybris technology, a Europe-based company, is helping the group set up the portal, as well as in other information technology-related issues.

“Once we venture into e-commerce, we will reach across India, in all cities possible,” Biyani said. The group is already running an e-commerce pilot in Akola, Amravati and Bhilwara.

Initially, the services will be largely limited to non-perishable commodities in most cities. In select cities, however, perishable commodities such as fruit, vegetables and meat will be also be sold through the online channel.

The supply chain management for the e-commerce venture will be undertaken by Li & Fung, a Hong Kong-based firm that has a joint venture with Future.

The group also runs the ‘Big Bazaar Direct’ programme, which integrates traditional supply chains (kirana stores) with the Big Bazaar brand. Through this, kirana stores, or small and medium retailers, take orders on tablets from customers at their premises, as e-franchisees of Big Bazaar. The group is expected to have about 50,000 Big Bazaar Direct franchisees by the end of this year, generating an average business of about Rs 5 lakh a year from each franchisee. For the Future Group, despite the ambitious e-commerce plans to trigger growth, debt remains a concern. “We are planning divestments of about Rs 2,500 crore in the coming year for acquisition of new assets,” said Biyani, dismissing concern the debt, pegged at about Rs 6,000 crore, might hinder its e-commerce expansion plans. “In the coming year, the competition will not just be about Flipkart and Amazon. It will be also be about players such as Reliance, Tata, Birla and the Future Group competing for the top spot,” said Arvind Singhal, CMD, Technopak India.