An Interview with Kisore Biyani-Head Future Group

In an interview with Chief Correspondent Syed Firdaus Ashraf, Biyani,the founder of the modern retail group Big Bazaar, has redefined theshopping for Indian consumers, gives his vision for the retail industryand his company's plans in the coming years.Why did you say in your speech that 2009 will be the definingmoment for Indian retailing industry?All the new malls that are in the anvil will be ready by then. We willalso have a retail policy in place and consumers too will be ready bythen, so we are ready for interesting times. We will see lifestyleretails, high-end retail. Every retailer will be in the market. So,2009 will be deciding factor for the retail market in India.Will the bubble burst?We have too many retail forums and too many malls have come up.The period to watch out for will be 2009 and it will be a testing timefor retailers, I feel. We will all know by then what the real demand isand what the real supply is in the market. In the meantime, thechallenge will be to find the right kind of people and trained peoplefor the industry.You mentioned in your speech at the India Retail Forumthat the rising realty rates in India will be a challengeto the retail industry. Can you explain the rationale?The consumer always saves money when there is inflation. He spendsless when things are expensive. Inflation affects the consumer'spsychology and people now tend to save money in such scenario andnot spend. It has been observed that when real estate prices keep goingup people tend to save and the consumption drops automatically.Why have you started credit card banking and how isthe response?It is only 45 days old and the response has been good. It is one of thefuture ways of the retail market and a learning business for us. Weare learning it. We have given loans to 500 customers so far. We arelearning while we are doing our business.What has the learning so far?(Laughs) The first applications are always those of fraudsters.What kind of potential do you foresee?There is a huge potential and we have just begun. We are creatingour checks and balances. In the last 45 days we have learnt a loton who is a trade-worthy customer and that is a business secret.You mentioned that there are two Indias today. The firstone are those people who have power to spend and thesecond one are those who are dependant on them likedrivers, cleaners and housemaids. Can you explain this?Today, only one India is growing. The people who have aspirationsand brains, they are the big consumers of retail market. This class isnot making the other India grow. Lot of people have to do a lot ofthings to change the scenario. One option is that those who havea good income will have to create an income for the India that isleft out. I call that group as the second India. They have to beprotected in a network and we need to give them a chance to growand become one of the consumers.You once said that social security system is bad in Indiaand that needs to be improved...Today, India's social security system is a family security system.People save money for bad days but if you compare that withdeveloped countries people spend money because they know thattheir government will look after them in bad days. They are notafraid of spending money in the developed countries. In the sameway we need to create a system in India where people should notfear to spend money and not bother about their insecurities.What can private players do in such situation?The only solution to this problem would be to raise income levels.If we do that, then everybody will have spending power.Do you think the real estate market has reached its peakand will crash?I cannot comment on it. I would however say that this is a game ofsupply and demand. Price correction will always be there in suchsituation.You said that you are approaching the Brazilian andMexican ways to develop retailing business. Can you explain?Every retail shop has domestic finance scheme in some cities ofBrazil and Mexico. We are also looking at that model. If you studytheir trend then you will find that there is 6 percent default andI feel it is okay because 7 percent default is the norm in creditcards too.What are the products that can be funded?Lot of products can be funded. We have started with some productsinitially but eventually the idea is to fund consumption as much as we can.Do you believe in customer brand loyalty?I believe there is something called emotional attachment to a brand.People do switch over their loyalty at times. I feel that these days,maintaining brand loyalty comes with a cost. I personally believethat the customer is like a nomad. He will go from one store toanother store. He will only come to you if you give him value.How did you crack the shopping woman's psyche so thatthey eventually end up spending in Big Bazaar shops?(Laughs) We keep women in mind. We work with them. We understandtheir emotions and therefore they end up spending in Big Bazaar