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Friday, September 07, 2007

Big Bazaar-Things you would like to Know

Recently I read the book “IT HAPPENED IN INDIA” by Kishore Biyani, the man who triggered retail revolution in India with shopping destinations like Pantaloon, Big Bazaar, Central etc. In this post I’m listing some key information extracted from this book, related to Big Bazaar in particular and retail industry in general that we as customers should know. [Book Review of IT Happened in India]
IT Happened in India by Kishore Biyani
Factors you should know about Big Bazaar:

1. The biggest customer for big bazaar till date is a farmer in Sangli whose bill amount was Rs. 1,37,367

2. If you use shopping malls as hang out places and do not buy anything there, you’re known as “mall rat” in retail parlance (pretty insulting uhh!)
3. “We ordered one lakh shirts at Rs 105 and sell them at Rs 149” this should give you an idea of operating margin they keep. (FYI: Later when these shirts were not getting sold the prices were brought down to Rs 129 and finally KB asks store manager to dispose them off at Rs 49!)

4. The inspiration to set up big bazaar came not from any foreign super market, but from a relatively small family run shop in Chennai, called “Saravana Stores”. This store is located very near to T Nagar bus depot. Pantaloon executives used to fly down to Chennai, spend lots of time in this store to understand its operation. The book also mentions a low cost eatery run by Saravana Stores which is very close to West Mambalam railway station in T Nagar. (I’ve visited both of these Saravana stores during January 2006-to give you an idea how cheap they are, these were: Noodles: Rs 12, Pizza: Rs 10, Chocobar: Rs 5, Poori (2): Rs. 6 etc. A jacket I bought for Rs. 312 and helmet for Rs 580 from Saravana stores are serving me excellently till date without any problem)

5. The first big bazaar store was set up in Kolkata and second and third were at Koramangala, Bangalore and Abids, Hyderabad (I’ve visited second and third one)

6. If you thought big bazaar outlets are crowded, they are intentionally designed to look that way. Target customer for Big bazaar are middle class people who find comfort in herd and tend to follow the crowd. (If everyone is buying here, it must be really good since so many people can’t be wrong. Let me also buy something). Ordinary people shy away from entering shops that look exclusive with expensive decoration with very few people around, thinking that such shops are very overpriced and not meant for them.

7. Soon you can expect sales people inside big bazaar outlets trying to sell you insurance, personal loan and other products and services, because Future Group (under which big bazaar operates) will be venturing out to launch several services in near future and they’ll be using their retail customer base as primary target to sell them.

8. Only apparels and clothing related items are sourced primarily from Pantaloon’s manufacturing units. Other products like plastics, groceries etc are either sourced from suppliers (called consolidators…Big bazaar primarily focuses on customer interface- the front end of the store while back end, sourcing supplies etc are managed by and large by consolidators) or certain vendors (say those who sell watches or spectacles) are rented a small space inside the malls. The book doesn’t state anything about quality control for these external products.

9. Big bazaar runs SAP(SAP AG (NYSE:SAP) is one of the leading ERP solution provider. ERP means enterprise resource planning- a software solution for various activities like inventory management, billing, supply chain management etc)
Related News: Satyam has the strongest SAP practice

10. How much an item gets sold depends also on how items are displayed within the store and lots of considerations go into it. From where the customer gets down from the vehicle, what items/offers he/she sees first, from which hand he picks up an item to take a closer look…all these factors influence the decision.

11. Big Bazaar store managers have considerable authority to take most of the decisions on the spot. If you have any issues, in all probability you should be able to get them resolved on the shop floor without having to escalate higher up.

12. Kishore Biyani has taken for rent retail space much more than what he originally needed. Because of this, they have enough floor space to accommodate their growth plans till 2011, saving on rent. Their competitors are fighting for space and paying a premium in terms of rent. Since rental forms significant part of operating expense, Big Bazaar is able to save considerably on this and pass the benefit to consumers.

As a retailer, their objective is to eat deeper into our wallet. As a consumer, we should be able to protect ourselves from over spending and stay within limits. Money saved is money earned.

Hope above information helps you.

Image sourced from www.mehtanirav.com | Big Bazaar on wikipedia |Locate Big Bazaar near to you|
Related post: Supermarket Supersavings-A word of Caution| TN Cooptex launched perfumed shirts | Rice Price Rise |

12 comments :

Shubham ~NeO~ said...

Hey nice blog bro !!! Wanna Xchange links ??? Catch my blog at www.techx.co.nr !!! Waiting for ur responce soon .. mail me at guptashubham123@gmail.com !!!

Sudipta Chatterjee said...

Very interesting and informative post, Shrinidhi! All it takes perhaps to start your own business and venture is courage, it seems.

Shubham NeO ©® said...
This comment has been removed by a blog administrator.
Shrinidhi Hande said...

Shubham,
I've linked you.

Sudipta, Yes. Courage is the key factor when you're trying something unconventional.

Vinay said...

Hey ShriNidhi, good one.

Can you comment more on the quality of the produts - may be categorising different products.

My spouse doesn't go too often to Big-Bazaar - but whenever goes with pre-defined list - comes back with huge bill...!! - out of which 40% includes not orginally included in the list. It would be great to know - how their suppl-chain-management works( though, to some extent u have have already specified...) Are products really worth the prices @ which they are offered ?

Shrinidhi Hande said...

Vinay,
I do not have specific details on the quality. Also it varies from shop to shop because supplier for each shop and each iten can be different since most of the items are sourced locally.

Since their focus is on quantity, turn around time is very less and margins being wafer thin, I suspect if they have any quality check in place. At times some can be really bad.

If you're buying low cost items for short term use, then it shouldn't be a problem buying there, since because of low cost you will be in a position to absorb the impact even if say 2 in 10 items prove to be of low quality.

About your spouce buying unintended items, that is because of tempting offers and marketing strategies they have. By offering low price for only select days they create an atmosphere "I may loose lots of benefits if I dont buy now"...

My principle: If I buy I may save 40-50%. If I dont buy I save full 100%

KEVIN said...

Thanx ,your blog helped me a lot for my Project.
Please keep posting such Blogs...

Shrinidhi Hande said...

Hello Kevin,

Glad to know it helped, can you explain how?

Hope you didn't do a copy paste job...

Nidhi

Ruchi said...

Interesting Posts, I was not aware about how it started.

Shrinidhi Hande said...

'it' in your comment refers to Big Bazaar I suppose.

healy said...

hay thank's for that . i realy need all these info .......... thank's

Riya Somani said...
This comment has been removed by a blog administrator.