Future group has confirmed that it will be shutting down its online venture Big Bazaar Direct as it is finding the business unviable. This has been the Future group’s fourth online venture. Their previous online venture Future Bazaar had ended with a loss of approximately Rs 350 crores. The losses of Big Bazaar direct are yet to be ascertained.
Kishore Biyani, who founded the Future group with the flagship brand Pantaloons in 1997, has built the Future group into one of India’s largest retail powerhouse. It is collectively made up of Easy Day, Central, Brand Factory, Foodhall, Ezone, FBB, Big Bazaar, Nilgiris and Big Apple.
Kishore Biyani has always been highly critical of the manner in which the Indian e-commerce industry has operated. he believes that the business models being followed are not proven or tested and are absolutely unsustainable. He has always underscored the fact that e-commerce companies are many years away from breaking even, and making profits is something he believes will happen in the not so near future. He has highlighted that these companies cannot survive without investor capital and reiterates that no sound minded investor would want to keep throwing money in when profits are nowhere in the horizon. He is right in this context as fundraising is becoming difficult for e-commerce startups now.
Mr. Biyani has underscored that once the discounts are taken away from the online shopper, he will no longer be loyal to any particular website. The size of the online market is itself being questioned now. A recent report by Kotak securities pegs the number of online shoppers at roughly 4 crores, a number that is stable or shrinking, but surely not growing. It is for this reason that Mr. Biyani wants to focus on their core business of brick & mortar retailing by adding 3.5 million sq feet of retail space to its existing retail space of 18.5 million sq feet.