shut-down-free

Future Group’s ecommerce venture Big Bazaar Direct will shut down after almost 3 years since launch in September 2013, reports Business Standard. “I have attempted e-commerce four times in my life. We opened and shut Future Bazaar (the group’s first e-commerce venture). We will close Big Bazaar Direct within a week,” Kishore Biyani CEO of Future Group was quoted as saying. However, the website seems to up and running active, without any message or notification about the shutdown as Biyani noted; it even accepts orders.

A Future Group source told MediaNama that the shut-down had already been initiated, and the company intends to officially announce this on their website soon. It will continue to accept orders until the shut-down is announced.

In its recently released FY16 annual report (pdf) the company had said that: “We are specifically focusing to achieve a larger share of consumption spending in our existing markets. We intend to increase our share in the consumer spending in India by launching new formats or by adding categories to our existing product range to cater to consumers across Indian society in various consumption spaces. Pursuant to the same, we have launched Big Bazaar Direct to reach out to the consumers that are not catered by physical stores and book orders on customized tablets.”

At launch in 2013, Big Bazaar Direct service operated via franchisee model and targeted 50,000 franchisees within a year’s time; users could request for franchises to visit their homes through a phone call or by making a request on the Big Bazaar website. These franchisees visit customers who browse through a catalogue of products on a tablet device; after placing an order and paying in cash to the franchisee, Big Bazaar delivers the order in 3-7 days. A year later in August 2014 Big Bazaar Direct entered the pure-play ecommerce by listing products online and allowing customers to pay online.

Still betting on ecommerce via partnerships

The Future group source told MediaNama that the company will continue their franchisee strategy with kirana stores, and focus on omni-channel for now, after phasing out online ecommerce. He says sellers wont be affected this way, since the omni-channel business will continue.

Biyani  told Business Standard that Future Group will focus on its existing omni-channel strategy, rather than only selling online. The Omni channel focus also found mention in the annual report:

“We are also in the initial phases of developing omni channel retailing which will enable us to sell our products on every platform such as physical stores, online retailing, assisted e-commerce platforms, on television or outdoor medium, or on mobile platforms”…”Even as the Company works towards introducing an omni-channel platform and the concept of digitally-enabled endless aisles at its stores, Big Bazaar today offers home delivery at multiple locations and a partnership with Amazon, now allows customers to order online. Customers also have the option to pay through Mobikwik mobile wallets at all Big Bazaar stores”.

In February this year, Big Bazaar Direct tied up with Oxigen to expand in the offline category. The tie up allowed Oxigen’s 200,000 retailers to sell goods listed on Big Bazaar Direct directly on Oxigen’s platform at physical stores. A similar deal was announced with mobile payments company Paytm in this month, wherein Big Bazaar merchandise will be listed online on Paytm’s platform for sale. At that time, Biyani explained why Big Bazaar is tying up with its competitor and even hinted on an exit:

“The unit economics of e-commerce has been the key bane for understanding the (ecommerce) business…In the last two years, we have been serious in understanding this business and how to engage with it… one has to make this business happen. The cost of acquiring a customer (in e-commerce) is more than 20%, cost of fulfilment is more than 20%, cost of running the operation is 8-10% totaling almost 50% as cost of operation. At this cost, you can’t sell any goods in this medium,” Biyani said while speaking to the Mint regarding its tie up with Paytm.

FabFurnish acquisition

In April, Future Group said that it will buy online furniture retailer FabFurnish for an undisclosed amount, which it did. The annual report mentions this, saying “The entire Home Town range is now available on www.fabfurnish.com, that was acquired by a group Company, and is also available on a number of other online retailers”