Big Bazaar was started by Future group led by Kishore Biyani. In 2013, the company had started an online venture called 'Big Bazaar Direct' for which they had set up about 1000 franchises who would sell Big Bazaar products to customers with the help of a tab, without holding any stock. They were even planning to increase the number of franchises to 50,000. In order to get the franchisee, the interested party needed to pay a deposit of Rs 300,000 to the group. Big bazaar had also joined hands with a payment solutions company, Oxigen to expand its distribution
But as per latest news, Big Bazaar is planning to shut down Big Bazaar Direct sighting reasons that the business is unfeasible.
At an event organised by realty consultants JLL and UBM India, Biyani said, "I have attempted e-commerce four times in my life. We opened and shut Future Bazaar (the group’s first e-commerce venture). We will close Big Bazaar Direct within a week.”
The group wants to focus on physical retailing only, where it plans to add 3.5 million sq ft of space, the highest-ever addition by the group in a single year.
Earlier this year, Future group bought a home products site 'FabFurnish'. “We are trying to figure out a viable online model. With the acquisition of FabFurnish, we are learning what not to do in e-commerce,” Biyani said. He further added that the customer acquisition costs, fulfilment costs and other expenses in e-commerce add up to 50 per cent of overall business costs, making it unviable.
Furthermore, for every customer acquired in most of the transactions in e-commerce, Facebook and Google get Rs 800-1,400. However, he did not elaborate on this.
Speaking about the other e-commerce sites he said that their business models were unsustainable and not for a long-run. He added, “We are happy with old-fashioned retail business. There is profit in it. Our business model has arrived. Theirs is yet to arrive.”
Rajan Malhotra, President, Retail Strategy & Convergence, Future Group recently told Business Standard, “We are not against e-commerce firms. We are only against heavy subsidising of products to gain market share. It is a great medium to reach a new set of customers and new geographies. Many aspects of our omni-channel strategy are operational and some are yet to be operational.How we execute the plan is internal to the group.”
However, Big Bazaar does tie-up with other e-commerce sites for promotions. Recently, it had a tie-up with Snapdeal to promote its five day "Maha Bachat" sale. Also, it has a permanent tie-up with Paytm wherein Paytm users can make online purchases at Big Bazaar.