The making of India's retail king
Kishore Biyani could have stayed in his father's firm, continuing the family's safe way of doing business, but the risk-taker dreamt of other ventures. In less than three decades, he has gone from family employee to head of India's largest retail conglomerate. Armina Ligaya reports When Kishore Biyani speaks, people hang on his every word. In this case, it was 400 or so industry players who crammed shoulder-to-shoulder into a Mumbai conference hall at the recent India Retail Forum, eagerly listening for his advice. His company, Pantaloon Retail, has roughly 1,000 stores across the country and had 47 billion rupees (Dh3.75bn) in sales last year.
That success made Mr Biyani's question and answer session the forum's main attraction. His peers at the National Retail Federation crowned him retailer of the year. The Indian press has called him the king of retail. It wasn't always that way. When Mr Biyani went into business, few thought his venture would survive, he says. He wasn't backed by a family corporation, and peers dismissed him as a compulsive risk-taker.
"We were not allowed in retail functions," he says in an interview at one of his offices in Mumbai. "Brands never wanted to supply to us, banks never wanted to extend lending. The retailer association never wanted us to be part of that group." "But," he adds, "that's the fun." The small fabric business he founded in the 1980s is now one of India's biggest conglomerates and a pioneer in the country's still-maturing retail market.
Mr Biyani, 48, who grew up in Mumbai's Malabar Hill area, was not born into old money. But his middle-class family was anchored by a line of businessmen, starting with his grandfather, who moved to Mumbai from Nimbi, a village in Rajasthan, to open a wholesale shop selling dhotis and saris. When Mr Biyani visited Mumbai's Century Bazaar as a teenager, he saw retailing being conducted on an immense scale. He decided then that he would create something similar - but better, he says.
He studied commerce at HR College in Mumbai, but concedes that he was a poor student. "I had no ambitions of studying much," he says, laughing. "I think, luckily, I didn't study much. Fortunately, I didn't go to any business school or anything." Business school might be good for managers, he says, but not for entrepreneurs such as he. His approach, in college and now, is to rely on observation and gut instinct.
"I spent the better part of the day outside college with friends, wandering around new places and understanding and interpreting the real world." Towards the end of his college days, Mr Biyani began working with his father, brothers and two older cousins in the family business, Bansi Silk Mills, which traded fabrics. But Mr Biyani felt stifled by the company's conservative business culture. "Kishore would come to the office, and within two or three hours he would leave," said his father, Laxminarayan Biyani, in his son's autobiography, It Happened in India. "He neither liked our attitude nor our approach towards the business. While he wouldn't confront us directly, it showed on his face."
In the meantime, his parents introduced him to Sangita Rathi, and in November 1983, after a six-month courtship, they married. Mr Biyani's first venture on his own came about by a fluke. It was the early 1980s, and he noticed that his friends were wearing trousers made of "stonewashed" fabric, a popular material at the time. In the next six months, he found a local mill that made the fabric and sold a few hundred thousand rupees worth of the material to a few garment manufacturers and shops in the city - giving him his first profit and his first taste of entrepreneurial success.
He then launched his own brand of fabric for men's trousers. He called it WBB - white, brown and blue. When demand for the fabric was at its speak, Mr Biyani sold 30,000 to 40,000 metres of the material each month, later making trousers himself and selling them to retailers. In 1987, Mr Biyani started a new company, a garment manufacturer called Manz Wear Private Ltd. The garments were sold under the brand Pantaloon, which Mr Biyani chose because it had the trendy feel of an Italian fashion house but was close to the Urdu word for trousers, patloon, he says.
Manz Wear supplied a few apparel outlets, but Mr Biyani wanted to expand its scope. So, he established a network of franchise stores that sold only Pantaloon trousers. Pantaloon Shoppe opened in Goa in 1991, later expanding its men's apparel line. Mr Biyani turned to the stock market in 1992 to fuel his continued expansion, announcing an initial public offering of 60 per cent of its holding at the Mumbai, Delhi and Ahmadebad exchanges to raise 225,000 rupees.
As well as funding fit-outs to stores, he also spent on lavish marketing, and by 1994, the Pantaloon franchise chain had a turnover of 9 million rupees. But profits didn't keep up. "We had made the mistake of spreading ourselves too thin," he wrote in his autobiography. "We were present across the length and breadth of the country, and that posed a logistical nightmare." The executive staff could not visit each store to monitor the quality of service, which deteriorated in some of the older shops. Some of the franchisees, who worked on a commission basis, were more concerned about immediate profits rather than serving the customer well.
In 1996, Mr Biyani began exploring the concept of converting Pantaloon into large-format retail stores of his own. He stumbled upon a 10,000-square-foot property at Gariahat, in Kolkata. It was a revolutionary idea, because at the time, the biggest stores in the city were no more than 4,000 sq ft. Mr Biyani convinced the reluctant property owners to rent him the space, and in August 1997, the first Pantaloons department store was unveiled to the public. Mr Biyani wasn't satisfied. The next year, he began working on Big Bazaar, a hypermarket with a dose of chaos - stores that were crowded, noisy and a bit messy - on purpose, he says.
"I think the familiarity of an Indian bazaar is something we wanted to create in a modern environment," he says. The first Big Bazaar opened in Kolkata in 2001. Within 22 days, he opened two more. Now there are 100 throughout India serving about 2 million customers a week. Part of Mr Biyani's success, he wrote in his book, is attributable to luck - being in the right business at the right time, in the right country. His business grew with the rise of the Indian middle class, which now had money to spend and embraced consumerism heartily.
That was when his peers started to respect him, he says. "People started noticing the work which we were doing." It is hard to ignore Mr Biyani's company now. Pantaloon Retail stores occupy more than 12 million sq ft of retail space in 71 cities across India and employ 30,000 people. Mr Biyani has also expanded into other fields, including media and insurance, all of which fall under the umbrella of the Future Group.
And there may be bigger things in the works. Last month, Mr Biyani met with Lars Olofsson, the chief executive of Carrefour, the world's second-largest retailer after Walmart. The pair visited a couple of Big Bazaar outlets in Delhi, according to reports, but Mr Biyani would not comment on the meeting. Mr Biyani's office is, appropriately, located in Mumbai's first mall. Inside, the decor is minimal. Eight framed pictures on the wall provide him with inspiration. They include Mother Teresa ("Give until it hurts") and Sam Walton, the founder of Wal-Mart ("Walmart became Walmart because ordinary people got together to do extraordinary things").
Mr Biyani, too, is not given to frills. He dresses simply; on this day he wears a simple blue-grey shirt. And he is a man of few words, although he is direct and at times blunt. Raj Kaith, the head of the E-zone unit in Sobo Central mall, now owned by Future Group, says Mr Biyani's appearance can be deceiving. "He dresses so simply," says Mr Kaith. "If he was standing around, you wouldn't think that he is the chairman of Future Group. I think that's what's so great about him. He is just a simple guy who knows his business inside out."
Mr Kaith says he often sees Mr Biyani standing in the mall atrium watching his customers. "I see him observing people and their attitude," he says. "He has a sixth sense of what customers want." Mr Biyani says he does everything he can to gauge the pulse of the Indian consumer. Lately, he has been watching Big Boss, the Indian version of the television series Big Brother. "We have to engage in anything that is popular," he says. "If someone tells me that television serial is doing well, we have to watch it. We have to observe the trend, because everything can impact the business for us."
The economic downturn meant Pantaloon had to postpone the opening of as many as 30 stores. The company also reduced the size of some of its other locations. "We will do better this year because of what we have learned," Mr Biyani says. "How to be more efficient. How to be more productive." One area in which Mr Biyani has not found success is Bollywood. In 2002, he helped to underwrite the film Na Tum Jaano Na Hum, in which, naturally, the parents of the heroine used to own a chain of retail stores.
"It's another communication medium to the consumers," he says. "The idea was to glorify modern retail in some form, through cinema." Critics panned the film, and it bombed at the box office. Mr Biyani's second Bollywood effort was the 2003 film Chura Liya Hai Tumne, which had a less dominant retail theme. He learned that you should "never get attached to something you have made", he says. "Whatever you create, the audience will decide whether you are right or wrong."
Still, he doesn't regard his unsuccessful venture into filmmaking as a mistake. "It's a learning process. It's a journey." @Email:email@example.com
Updated: October 15, 2009 04:00 AM