What do you do when you see an international competition rooting its mark to tap the retail landscape in your country?
The answer is: Jumping into the combat with all what you have and acquiring what you don’t!
Country’s retail baron, who is also known for ridiculing the eCommerce model, has at last excepted the metal of eCommerce and has decided to step in. Recently, Kishore Biyani-led Future Group has acquired an online shopping portal FabFurnish. With this acquisition Future Group plans to feud Swedish furniture retailer IKEA, which is about to mark its entry into Indian retail horizon in 2017.
Surely, Future Group acquiring FabFunish is news but, Kishore Biyani leveraging an online retail firm to take on IKEA is more than just news. Is this the future of retail in India? Does that mean both of India’s retail models (online and offline) will have to come together in order to fight against the international competition?
Recently, Kishore Biyani-led Future Group has acquired Rocket Internet-backed online furniture portal FabFurnish in an all cash deal summing somewhere around $3 million. This is Future Group’s first eCommerce possession and first exit of Rocket Internet in India. The brick-and-mortar retailer also owns a private label furniture and home furnishing brand named HomeTown. The private label brand has more than 40 operational stores across the country and with this acquisition Future Group plans to take HomeTown online for a larger and a better reach.
All FabFurnish employees have been retained as of now and Mahesh Shah, CEO, HomeTown will head the newly acquired unit. While talking to a media firm Kishore Biyani said that with this acquisition he plans to create a largest network of home furnishing retailing in the country. IKEA will take at least 2- 3 years to become a 1,000 cr company and they are already there, he added.
In the last 1 year, FabFurnish had seen some massive management-level reshuffles in its day-to-day running of the business, and has not been able to withstand against its peers such as Pepperfry and Urban Ladder.
This acquisition raises some prudent questions related to how Indian retail brands (both online and offline) manage to hold the pole position in the market that is restructuring. With some of the government’s moves such as Make in India, Startup India and the recent 100 per cent FDI in eCommerce, entry of International brands is for sure. This will obviously lead to bigger retail-war of sorts. So, now can we expect some similar online-offline collaborations in order to take on foreign competition? As today, companies are the new countries and countries are the new companies, is retail now all about the survival of the fittest?