The super shopkeeper
People who made a difference in 2003/KISHORE BIYANI
| In business terms, Biyani isn't even remotely close to Walton, but he has moved up in the last one year to become the king of the aisles in India's shopping malls. |
| And Biyani, the chief of Pantaloon, is just starting his journey down the aisle. His chains""Pantaloon, Big Bazaar and Food Bazaar""have grown massively in the last 12 months in terms of retail space and they are poised to double once again by June 2004. |
| In fact, Biyani seems geared for non-stop growth. Currently, his stores stretch over 350,000 sq ft and that will spread further to 700,000 sq ft by June next year. And it won't stop there: Biyani's ambitious target is to reach 1.5 million sq ft by June 2005. |
| That's only for starters. The company aims to double its turnover to over Rs 700 crore by the end of June 2004 and perform the same magic in the next financial year. And it plans to invest around Rs 75 crore in the next few months to turn the dream into reality. |
| Says Biyani confidently: "Our aim in the next two years is to both double turnover as well as retail space and have stores in every corner of the country. This year we have already invested Rs 50 crore." |
| Biyani is already setting up stores and hypermarkets in smaller cities like Nagpur, Bhubaneswar and Ahmedabad. What's more, he is also starting new product category stores""such as shoe shops. Initially, these are being opened as departments in one of his existing stores. If they succeed they will become independent brands. |
| For instance, Biyani has opened a "Footwear Bazaar" within Big Bazaar in Gurgaon. The aim is to learn the footwear business, ensure that it is profitable and then turn it into an independent store. |
| Similarly, cashing in on the Indian craze for jewellery, Biyani has set up "Gold Bazaar" in some stores. |
| It looks as if Biyani has got the retail formula right. The customers are flocking to his stores. This year on an average each store had 200,000 customers walking through its doors. In the next 12 months he expects the numbers to double with new retail stores coming up. |
| So what's the secret of this retailing success?. Biyani's answer is simple and modelled on what Sam Walton might have said: "Offer customers value in terms of price, quality and service and he will come to you." |
| That's more easily said than done. But Biyani follows a four-fold strategy to keep costs under control and pass on the margins to customers. |
| Firstly, he buys most products directly from manufacturers and avoids the middle man - saving between 5 per cent and 40 per cent . Secondly, wherever possible he manufactures it himself""so for instance as much as 70 per cent of Pantaloon's ready-to-wear products are manufactured by the company's garment unit. |
| Similar logic has made Biyani push for more in-house food labels in his grocery chain Food Bazaar. The reason says Biyani is that gross margins on in-house labels are 4 per cent to 5 per cent higher than products bought from others. |
| Three, he buys goods by paying cash upfront. Says the super retailer: |
| "By doing so I can demand a cash discount from the seller and he is willing to give it. This we pass on to customers." |
| Four, Biyani keeps a close watch to ensure stock turnaround so slow moving items are liquidated through sale offers. So, for instance, in food products the stock turn is as much as 40 to 50 times a year. |
| But can the Biyani juggernaut continue for years to come? The market is certainly optimistic and this shows in the fact that Pantaloon Retail's stock price has climbed by 418 per cent from Rs 52.25 on January 1 this year to Rs 270.80 on December 24. |