Buy now, pay later at Kishore Biyani's Future Group retail outlets

Sources said the group wants to envelop customers by bringing them onto Future Pay, a captive payments app-cum-wallet launched in 2018 | Photo: Bloomberg
As part of Kishore Biyani's digital transformation strategy, Future Group is trying to make a fresh attempt at extending loans. The company is planning to give short-term credit facility, or loans, to its customers through a ‘digital’ non-banking financial services company (NBFC), two sources in the know of the plans, told Business Standard. 

This is not the first time the group is testing waters in the credit business. In 2007, the group set up Future Capital Holdings, which had a major play in wholesale loans and mortgages. But five years later, that business was sold to Warburg Pincus for Rs 800 crore as part of the group’s strategy to off-load non-core business. 

This time around, the company is riding on extensive data and analytics to extend credit, the people in the know said. The firm is creating a repository of consumer data, seeded from its retail touch points, for profiling, targeted marketing, and cross-selling. “Biyani’s vision is to focus on the 20 million customers that come to his stores, and drive Rs 100,000 worth of business from them every year,” a source in know of the group’s digital strategy said.

Initially, the NBFC, which is learnt to have got an approval from the Reserve Bank of India already, will offer up-front credit to customers walking into Future retail outlets. Only those customers who are on Future Pay app will be able to make cashless check-outs by scanning a QR-code. They can then pay the dues at the end of the month. “It’s a ‘buy now pay later’ facility,” said one of the persons cited above.

In the first leg of the roll out, expected soon, buyers will be offered credit. Later, working capital credit is likely to be extended to small vendors and suppliers, too, sources said.

Future Group did not respond to a request for comment.

Sources said the group wants to envelop customers by bringing them onto Future Pay, a captive payments app-cum-wallet launched in 2018.

Digital payments not only creates a hook for customers but brings in valuable data — spending pattern, preferences, age and so on — to the company as actionable insights, said Arvind Singhal, chairman, Technopak Advisors. 

“Retails businesses know very little about their customers. But we have seen online-first ventures creating successful businesses on the back of data,” said Singhal. “Offline retailers are now playing catch up.”

The group had hinted at a massive digital push when it unveiled Future Retail’s 2018-19 annual report. “A data-led digital platform is being built that world can emulate,” read a statement in the report. In June 2018, the group set up a unit called Tathastu, led by Vivek Biyani, to work on advanced technologies in retail innovation. Vivek, son of Kishore Biyani, is a director at Future Group and head, digital business initiatives. Tathastu is currently working on features like mobile point-of-sale, e-Bill, smart self-checkouts, chat bots, and virtual reality-enabled experiences, among others.

Future Group owns Big Bazaar, fbb, Central, Brand Factory, Easy Day, and a dozen brands in fashion and consumer-packaged goods categories. Its three listed entities — Future Retail, Future Consumer and Future Lifestyle Fashion — together posted Rs 63,500 crore revenue in 2018-19. 

Flipkart and Amazon, which operate PhonePe and Amazon Pay, respectively, crunch peta-bites of consumer data every day. This helps them in everything from inventory management to reducing delivery times and predicting what the customer will buy next.

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