Key Retailer Report
Future Group’s vision is to “Deliver Everything, Everywhere, Everytime to Every Indian Consumer in the most profitable manner.” The
group considers ‘Indian-ness’ as a core value and its corporate credo
is “Rewrite rules, Retain values”. The Managing Director, Kishore
Biyani is the unchallenged king of Indian retail.
The company’s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food
Bazaar, a supermarket chain that blends the look, touch and feel of
Indian bazaars with aspects of modern retail like choice, convenience
and quality and Central, a chain of seamless destination malls. Some
of its other formats include, Depot, Shoe Factory, Brand Factory,
Blue Sky, ALL, Top 10, Star and Sitara. The company also operates
an online portal, futurebazaar.com.
Home Solutions Retail (India) Ltd, a part of the Future Group, is India’s
fastest growing retailer of electronics, consumer durables, furniture
and home improvement products. Home Solutions Retail operates numerous lifestyle and value retail formats. Among its lifestyle retail formats are – eZone (high end consumer electronics specialty store),
collection i (luxury furniture & furnishings) and HomeTown (home improvement store). Its value retail formats are Electronics Bazaar (value
electronics), Furniture Bazaar (value furniture) and Got IT (knick knacks
& useful tools).
Websites: www.futuregroup.in; www.pantaloon.com
Contact Information (buying office)
Pantaloon Retail (India) Limited/ Future Group
Knowledge House
Shyam Nagar, Off Jogeshwari-Vikhroli Link Road
Jogeshwari East
Mumbai 400 060
India
Nikhil Chandra, Head-International Sourcing
Tel: +91-93 2303 5304
Fax: +91-22 6644 2201
Email: [email protected]
Ajay K. Pathak, Senior Manager-International Sourcing
Tel: +91-93 2289 4757
Fax: +91-22 6644 2201
Email: [email protected]
(Continued on next page)
(Contact Information continued)
Lyndon Pinto, Business Manager-International Sourcing
Tel: +91-93 2306 8042
Fax: +91-22 6644 2201
Email: [email protected]
Sandeep Poddar, Director
Tel: +91-98 2012 4186
Fax: +91-22 6644 2201
Email: [email protected]
Background Information
Year Established: 1997
Number of Stores: 1000+ doors throughout total company
Number of stores in key formats featuring housewares:
Big Bazaar (100), HomeTown (7), Electronics Bazaar (90), eZone (50)
Total Annual Corporate Sales: $1B (FY’07/’08),
Projection $1.7B (FY ‘08/’09)
Store Locations: Throughout India with concentration in metropolitan centers. They are
moving beyond Tier 1 Indian cities to smaller Tier 2 & 3 cities as well.
Average Store Size in key formats: Big Bazaar (15-50,000 ft2), HomeTown (125,000 ft2), eZone
(12,000 ft2, 30,000 ft2 megastores)
Housewares Percentage of Total Sales: 5-15%
The Future Retail Spread
Brand
Key Format
# of outlets
Big Baazar
Depot
Electronics Bazaar
eZone
Food Bazaar
Furniture Bazaar
Future Money
HomeTown
Indus League
KB’s Fair Price
Lee Cooper
Pantaloon
Planet Sports
Shoe Factory
Hypermarket chain
Books, music, gifts
Electronics
Electronics
Supermarket chain
Furniture stores
Consumer finance
Home furnishings/DIY
Clothing
Food Categories
Fashion for young
Fashion stores
Sports related goods, accessories
Footwear
100
112
90
50
136
85
150
7
102
102
31
45
54
17
The group also includes around 100 other specialty retail formats
Key Competition in Housewares Category: K Raheja Group (Shoppers’ Stop, HomeStop), Landmark Group
(Lifestyle, Home Central), Trent/Tata (Westside, Croma, Star India Bazaar). New ventures: Tata/Tesco, Bharti/Wal-Mart.
Target Consumer: The Future Group as a whole caters primarily to the lifestyle and value customers at several levels
of the marketplace. Big Bazaar targets the true middle and lower middle class at very sharp price points. Home Town
targets young, upwardly mobile individuals and families (upper middle class and above).
Stores and Products
Store Layout/Look/Feel: Big Bazaar has some of the
clutter and massed out appeal of the disorganized street
corner market. It is a hypermarket, but not in the Western sense. Assortments are displayed on high, vertical
fixtures, resembling a warehouse club more than a typical Western mass merchant. Since many Big Bazaars
are in urban locations and real estate is expensive in Indian cities, they often extend upward several vertical
floors rather than horizontally in terms of square
footage. HomeTown tends to look more like a Western
retailer. It is a cross between a Home Depot with many
DIY features and an IKEA with several furnished room
layouts. Electronics Bazaars are similar in look and feel
to electronics retailers throughout Asia and the West, but
tend to be a bit smaller in overall square footage, again
due to the real estate premium. Many smaller eZones
are upscale and located in malls, but the latest growth
has been in eZone megastores which are much larger
than the average.
Home/Housewares Categories and Pricing: Most
home and housewares categories are carried at Big Bazaar and HomeTown. The price points at Big Bazaar are very
low; everything is targeted at the value consumer. There is some packaging, but most is low end for small appliances
or wall cards for gadgets and flatware. Many products are simply massed out without packaging. HomeTown prices
are higher and packaging is more upscale. Large appliances and furniture items (which are mostly KD) are kept in the
stockroom and delivered to the purchaser upon payment at the cash registers.
Design and Quality: Most housewares products sold at Future Group stores are simple in design and fairly generic.
Consumers are just beginning to see fashion forward designs in the Indian market. In order to achieve value price
points, quality is also not yet on a high level, but is improving every season as Indian consumers have increasing disposable income and demand more sophisticated products.
Brands Sold: At Big Bazaar, there are a number of low end Indian brands, but most of the housewares product is unbranded. Some of it is sourced from low cost producing countries such as Bangladesh and China, but country of origin is not always clear. Big Bazaar is seeking to expand the private label program from 12-14% to 25% of total sales.
At HomeTown, brands such as Philips, Corelle and Luminarc have sizable displays. The original objective was to
evolve to 100% private label at HomeTown (like IKEA), but that goal has been adjusted until there are significantly
more stores.
In electronics, private label brands, Koryo and Sensei, have received a very positive response from consumers. 15%
of electronics revenues come from these private labels and are backed by after-sales service network at 52 centers
across 45 cities. The new eZone megastores carry 250 leading national and international brands.
One of Future Group’s divisions is Future Brands which is responsible for developing, managing, acquiring and dealing
in consumer-related brands. It is now focused on apparel brands, but looking at brands in home categories as well.
Key Marketing Tools and Promotions: Credit is a new concept in India. By incorporating a financing tool into their
retail outlets (Hometown has an in-store financing “shop”), Future Group encourages consumers to make larger purchases and to spend more. There are loyalty schemes which reward regular clients. Promotion is also done through
co-branded credit cards with ICICI bank.
Since price bargaining is traditional in India, off-price promotions are also a new concept and Future Group has led the
way with huge sale days, especially at Big Bazaar. The stores have large promotional budgets advertising widely in
the consumer press and on TV, but in India, low tech advertising (such as leaflet handouts and megaphone announcements on street corners) is still very effective.
Suppliers and Sourcing
Sourcing Strategies
- Global (offices in China and Hong Kong, trade shows in Asia and
Europe)
- Direct from factories in Asia
- Direct from vendors/product suppliers (still limited from Western
suppliers)
- Through distributors (eases logistics issues in India)
Supplier Expectations Regarding:
Products: Must meet expected (higher) quality standards for Western product. If Western product is manufactured in Asia, then it
must have significant design or functional advantage over product
which could be directly imported by Future Group. China as country
of origin still has negative connotations among Indian consumers,
especially among more upscale consumers.
Pricing: Branded Western product is not expected to be as low in
price as Indian manufactured product or direct imports from Asia, but sharp pricing and VALUE are expected.
Production and Re-orders: If product is direct shipped from Asian factories, it must have short-term options
for re-orders.
Sucess Factors and Expansion Plans & Expectations
India is the fastest growing retail market in the world and Pantaloon Retail/Future Group is the market leader. Analysts view the group’s prospects well since they are the “first mover”, and it will take some time before the entry of
Wal-Mart and Tesco into the market has a major effect. (India’s regulations do not allow for non-Indian, multi-brand
retailers unless tied to a joint venture with an Indian company. Wal-Mart has a relationship with Bharti and Tesco recently announced an association with Tata.)
However, Future Group, according its Chairman, Kishore Biyani, may be forced to postpone the long term target period of achieving $6 billion turnover by as much as six months. The economic slowdown in India, which is a consequence of the global economic collapse, will result in slower than earlier predicted growth of Indian economy in the
coming months. The era of 9 percent GDP growth is over and, according to current estimates, 2008 growth may
range between 6 and 7 percent. This, according to Biyani, will mean less money for spending in the hands of consumers.
Expansion Plans: Future Group had recently announced significant expansion of retail space in the next three to four
years. The group expects to more than double the space currently occupied by its various format from 11 million sq
ft to 26 million sq ft.
Home Solutions Retail India Ltd plans to achieve revenues of $1 billion by 2011 and has indicated plans of an initial
public offer (IPO). The Future Group is also working on the on management integration of Home Solutions Retail India
Ltd and Big Bazaar.
The profile created by:
Albing International Marketing
Robin K. Albing
Tel: +1 908 788 5411
Email: [email protected], [email protected]