Future Group to flex its discount muscle to take on e-retailers

Future Group’s Big Bazaar will see an aggressive discounting scheme in the first eight days of every month. The strategy has been formulated to take on the likes of online retailers and help in increasing customer base and help them stop from migrating online, The Economic Times reported on Monday.

 

The Monthly Bachat Bazaar will be a fixture for every month of the current fiscal. Incentives like cash bonuses and vouchers worth Rs 2,000 against a purchase of Rs 2,500, for instance, will be given. Such instruments can be redeemable for the rest of the month, ensuring repeated footfalls during the lean period too, the company claims.

 

The motive behind the move, apart from swelling its business, is to take on online retailers and grocery stores that have disrupted revenues of brick-and-mortar stores. It is also seeking to reposition itself into something that looks like a startup, the publication reported.

 

Apart from online grocery stores, merchandise e-retailers have also introduced these services. Amazon India, for instance, introduced Kirana Now, while Flipkart is using its logistics arm to deliver goods from the neighbourhood stores, the report added.

 

Consistently sceptic

 

Biyani has been very vocal for his criticism of online retailers, especially on pricing issues.

 

The industrialist stated that online fashion model will not click as it does not sound appealing to him. "The cost of doing business in online fashion retail is not profitable...In the online model, the minimum cost of acquiring a customer is 20% of total sales, but for us, it 2-2.5% of total sales. So, there is no comparison between the two models", he told Mint.

 

Biyani had earlier hit out at online retailers for under-cutting the market and selling goods at below the cost price.

 

“The euphoria should last for 6-18 months. Then it will be over. You can't live in the euphoria and reality will set in," he had said in 2014.

 

In fact, after the government last month issued guidelines on overseas investment in online marketplaces, he welcomed the decision and said that the move will prevent e-commerce firms from controlling prices and selling below cost.


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