Future Group Founder & CEO Kishore Biyani wants to take his pet theme of 'collaboration' to the next level for a greater share of the consumer's wallet.
The group, which owns big retail chains such as Pantaloon and Big Bazaar, will tie up with telephone operators to sell talk time at its outlets, buy stakes in food processing units and mills for backward integration of its foods business. The group will also launch a new commodity brand called 'Ekta'.
"Players in the industry need to understand that you can't do everything yourself, so collaboration is critical," Biyani said at the India Retail Forum here today. The new moves, said group officials, would go a long way in achieving the revenue target of Rs 25,000 crore (Rs 250 billion) in the next four years.
The group's plans to buy talk time in bulk from telephone operators and sell SIM cards and recharge vouchers in its stores are expected to be in place by early next year and co-branding options with mobile phone operators were being explored, Biyani said.
The Future Group runs over 1,100 stores in the country. Sources familiar with the developments said Future was in talks with Tata Tele Services for a franchisee agreement and was set to sign a deal soon. Biyani, however, denied this.
Future already has a tie-up with UAE-based Axiom Telecom to sell mobile phones and accessories in the country, for which it plans to set up 1,500 outlets. The group expected business of Rs 80 crore (Rs 800 million) a month after 24 months from selling talk time to shoppers, Biyani said.
In a backward integration move in its foods business, the group will buy equity in food processing units and mills in areas such as Indore and Nagpur, Biyani said. Currently, 30 to 35 per cent of its food and grocery revenues come from its private labels and the group believes this share could rise to 50 per cent in the next couple of years.
"We are looking at building capacities in the entire value chain. We have entered the fashion value chain there and now we are looking at farm produce in a similar way,'' Biyani said.
Nearly 80 per cent of apparel sold in Future group stores comes from units owned by the group in places such as Tarapore near Mumbai. The group was planning to replicate that in the food and grocery businesses, a group official said.
The group was leveraging the capacities of its rural retailing arm, Future Agrovet, to source fresh produce from farmers, he said.
The group's new commodity brand, Ekta, will cover for popular items such as gram flour (besan) and beaten rice (poha), among others, Biyani said. Initially, the brand will cover 35 products, going up to 100 products in the next couple of months.
Future is also planning to set up print shops in the country that will offer services to print visiting cards, wedding invitations and so on. Future Group has a stake in design firm Idiom. The group was also setting up a BPO to take care of the back-end needs of this venture, Biyani said.
Fund raising plans: Future Group's venture capital arm, Future Venture, plans a Rs 1,200 crore (Rs 12 billion) public issue by March 2010, Biyani said. The group is also looking at raising Rs 1,000 crore (Rs 10 billion) by selling its non-core retail assets in the country. Biyani, however, declined to name the assets that the group is planning to sell.
Image: Kishore Biyani
