Introduction

 Big Bazaar is an Indian retail chain of hypermarkets, discount department stores,

and grocery  stores. It was founded by Kishore Biyani under his parent organisation Future
Group, which is  known for having prominence in Indian retail and fashion sectors. Big
Bazaar is also the parent chain of Food Bazaar, Fashion at Big Bazaar and eZone where at
locations it houses all under one roof, while it is sister chain of retail outlets like Brand
Factory, Home Town, Central, eZone, etc. 

 Founded in 2001, Big Bazaar is one of the oldest and largest hypermarket chains of India,
housing about 250+ stores in over 120 cities and towns across the country. 

 In 2020, Big Bazaar was acquired by Reliance Retail, the retail division of the Reliance
Industries, as part of a ₹24,713 crore ($3.36 billion) sale transaction of Future Group. The
acquisition is being disputed in Singapore courts by Amazon, which is citing a contract
agreement prohibiting deals with 'restricted list' of companies.
History of downfall
 Back in 2017, Kishore Biyani promised to spend ₹100 crores in a bid to roll out a new
ambitious retail strategy. The plan was to offer a 10% discount on all orders made in its
small-format stores Easyday, Nilgiris and Heritage fresh. And prospective customers could
avail this benefit if they subscribed to a special membership by paying a yearly fee of ₹999.
The hope was to eventually augment the buying journey with tech.

 The only problem, however, was that the company had to focus on new store expansion to
make the offering more attractive. After all, if you’re going to be a subscriber, you’d want
easy access to the store. So if Future Group had 30 Easyday stores spread across each city,
maybe it would be an attractive proposition. But they never got to that number. And when
the company fell short, they realised they had spent a lot of money they could no longer
recover. In fact, the Easyday store chain never broke even. It’s still a loss-making enterprise.

 And through it all, the company and its promoters amassed massive amounts of debt — a
loan burden totalling ₹30,000 crores . Meanwhile, Kishore Biyani had pledged most of his
shares as collateral to facilitate this borrowing program. When the shares lost value, he was
expected to top up the collateral with more funds. Funds he did not have access to. And with
COVID wreaking havoc, there was very little he could do except selling most of the business
to Reliance.
 Reasons for downfall
 OVER LEVERAGED AND NEAR FINANCIAL INSOLVENT
The cash-strapped group companies jointly owe around ₹19,000 crore to banks, besides the ₹6,000 crore dues to the
vendors. FRL alone owes ₹6,278 crore debt with 28 banks, including SBI, Union Bank, Bank of India, Bank of Baroda,
Axis Bank, and IDBI Bank, among others. There aren’t many assets that can be liquidated to recover the loans. The stores
are on rent and products are supplied by the vendors.

 AGGRESSIVE EXPANSION AND UNRELATED DIVERSIFICATION

At corporate level, the group focused aggressively on expansion. It was a dream of Kishore Biyani to have its Big Bazaar
store presence in every city of India and as a result Big Bazaar stores were opened even  in many cities/locations where it
was not viable. 

It was also engaged into related as well as  unrelated diversification thereby entering multiple businesses ranging from
insurance, logistics, etc.
INABILITY TO LEVERAGE ONLINE RETAILING 
Ø CEO OF FUTURE GROUPS MR.KISHORE BIYANI  was never a big supporter of
online retailing. Future groups had launched futurebazaar.com way back in 2007,but it did
not work for them and so in 2013, the group tried its luck once again with Big Bazaar Direct. 

Ø  He planned to use a franchisee-based model where prospective

vendors (including kirana shops, medical stores, and insurance agents) personally visited
customers and collected their orders using an electronic device.

Ø  Unfortunately, the model never took off and Biyani had to shutter operation in 2016 after
losing more money,  customers started  flocking to online stores provided by flipkart, amazon,
Big Basket etc. from offline stores  because of larger options to choose from, better price, more
convenience and better service.
 REVAMPING STRATEGIES

 Focus on the profitable sectors and close down loss making ventures. Close shops that are
cannibalizing sales from other branches of Big Bazaar.

  Bring in people experienced in ecommerce and stop implementing half baked ideas.

 Expand in ecommerce using dedicated warehouses / divisions. Focus on Tier 1 and 2 cities before
expanding further. Outsource delivery service and provide competitive discounts.

 Cut down on variety and use existing relations with big brands for exclusive stocks of products that
sell the most.

 Decreasing the fixed operating cost- by arranging goods efficiently in stores, it can store more goods
in limited area and by running stores in the outskirts of the city, it will have to pay low rent as big
bazaar pays heavy rent to malls. This will result in less operating cost and more profits.

 Keeping high inventory turnover- Currently, Big Bazaar's inventory turnover is very low in
comparison to its competitors because its sales are less in relation to its inventory. This can be done
by selling goods at a discount.

 Timely payment to suppliers should be made as this will result in receiving additional discount which
will be partly transferred to customers and result in increased flow of cash, revenue and income.
 GROUP MEMBERS
• Aditya Prem Santoshi
• Harsh Adukia
• Ishan Patel
• Jatin Kukreja
• Khushi Chandak
• Kirtan Lohiya
• Kkusum Jhamnani
• Lavesh Chichria
• Moosa Talha Al Kaseri
• Vishakha Rajani