While it’s been a challenge to find the right partners in retail to scale up the operations, Kishore Biyani, Group CEO, Future Group seems to have tapped the right partner in Oxigen. Leaving no stone untouched in the business of reaching the customers, Big Bazaar Direct has tie-up with Oxigen to leverage its presence of 200,000 franchisees across 16,000 pincodes. On the occasion of announcement of tie-up Kishore Biyani, Group CEO, Future Group spoke to Indianretailer.com
What kind of synergies are you building with this partnership?
This tie-up is not for short period of time. Big Bazaar has been in business for a long time. When we met Pramod Saxena, we thought there is a lot of synergy which we can build together in terms of the network they have established of 200,000 franchisees and if these franchisees become our Big Bazaar Direct partner retailers, we can cover entire India.
For the last six months we have worked on synergising technology interface to scale up our reach and building up a business model, wherein all Oxigen franchisees get an opportunity to become our franchisees selling our products. With this partnership we will be able to touch 16, 000 more pincodes of this country, compared to leading e-commerce companies, which are only able to supply to around 6,500 pincodes.
It's an assisted e-commerce model which works even when internet is not available. This model resolves the issues of payment, delivery, goods return, confidence and product quality. Oxigen fits our needs best in the process of use of technology, partnership and acquiring agents to sell our goods. Through this partnership we are building sustainable and profitable model. It's a kind of two mature organisations coming together to deliver something.
How you will leverage on 200,000 retailers of Oxigen?
It’s all about how many of them become members of our programme. In the first round 275 retailers have already enrolled and we believe around 10,000 retailers will enroll with us in the coming time.
What investment you have done for this initiative?
We believe in brands and products that we have. In Big Bazzar Direct since last one and a half year we have invested on the product and supply chain to deliver goods to around 1000-2000 pincodes and developed the capabilities. Hence, to further enhance our warehouse and supply chain capabilities, we have bought 165 acre of land to set up food and logistic park in Mihan SEZ, Nagpur, Maharashtra.
Oxigen, in the last 11 years, has done many investments to build their network of 16,000 retailers. Both of us have invested in building up capabilities and this is the time to exploit that capabilities. If we come together, we can create profitable business venture.
What is a timeline you have set for returns?
I think it’s a journey. It depends upon the number of Oxigen franchisees services we get through and the amount of business they do. With the help of technology a good franchisee can do Rs 25 lakh of business a month.
We have grown from small to large format stores; we know what works and what doesn't. We are not a very heavily invested company which is giving money to the customers to buy our products. We have a price point that we can stick to.
You often talk of disruptive pricing so will you be offering promotional discounts?
We don't want to compete on prices. I think we have built extensive scale in the country and that benefit should go to the customers. Our product and quality are established. In e-commerce transactions, I have known people who get nylon bed-sheets, but I don’t understand how people can sleep on nylon bed-sheets.
How are you going to promote this initiative among customers and retailers?
There would be lot of activates from the front end from the Oxigen people. It’s all about talking to the retailers and customers in the languages that they understand.
What about your target of developing 20,000 Big Bazaar Direct franchisees?
We have 1000 franchisees of Big Bazzar Direct in the country. When we developed our concept of Big Bazaar Direct one and a half year back, we wanted to build more than 20,000 franchisees at that point of time. But we were struggling to build our network because the cost of acquiring franchisees is too expensive.
What will be your future tie-ups?
We are looking at reach and for that reach we need good partners with us and it’s not easy to find good partners. I think oxigen is an indigenous brand and we believe that Indian partners are very important. We have not been able to work with companies of international background as much as we are successful with companies with Indian faces.
In the coming days you will hear more such announcements from us. We are launching more than 31 brands in FMCG space and we have more than 40 fashion brands.