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Kishore Biyani has applied for a payment bank licence. A day after the announcement, the chief executive of the Future Group tells Digbijay Mishra about his passion for a full-grown consumer goods company and the business targets he has set for himself. Excerpts:
You have applied for a payment bank licence. How does it complement your business?
We have a customer acquisition cost. Then we have a consumer base of 30 million. We are operating in more than 130 towns. If we put these things together, we can use a lot of transactions. We need a product that is a prepaid card. Then there is money transfer. So these things will help a lot.
How do you see your chances of receiving the licence?
That is for the regulator to decide. Supermarkets are a category the Reserve Bank of India has recognised, and we are reasonably in the supermarket space.
Is IDFC buying a stake in your payment bank venture?
At the moment, we are on our own, but we can always pick a partner. Once we get a nod, there could be an alliance in some form. We have heard from many people who want to participate. We are a good bride, so we can find grooms easily.
How long have you been preparing for the payment bank?
We have been working on it for over a year. Even before the licences came up for distribution, we were looking for a card-based mechanism.
How is your deal with Amazon working out?
Pretty smooth. Fashion is there, and the rest will follow soon. As long as there is money, this discount model will continue, but they may have to shift to a different model once the money stops pouring.
Basically, we are selling to consumers. It does not matter where she is buying from, because at the end of the day, the consumer is going to buy from me. Ultimately, retail is selling products to the consumer.
How do you see the online business growing?
It should be about 10 per cent of the top line. What would be interesting to see is what happens when the heavy discounts are off. We are confident of clocking 10 per cent of total sales from e-tail till discounts are given.
Has your stand changed on big discounts?
When modern retail came, people thought kirana retail would be eroded, but that did not happen. Now, with e-commerce, people are saying modern retail will be hit, but I see people buying online where the reach of modern retail is negligible. Online retailing has its strengths and those need to be used.
What is on the cards for the Future Group after the Nilgiri acquisition?
We keep selling and buying, so that is always a possibility. We bought five (companies) and sold one in recent times. But there is nothing concrete now.
You want to become a consumer goods company. How is that shaping?
That is my big passion. We are starting to launch quite a few brands. We wanted a Rs 1,000-crore consumer goods business, and we have reached there. We have a vision of Rs 20,000-22,000 crore by 2015-16. Fashion will be close to Rs 8,000-9,000 crore.
