InvestorQ : What are the few areas you feel that Kishor Biyani went wrong forcing him to sell the Future group to Reliance Industries?
Angel dcosta made post

What are the few areas you feel that Kishor Biyani went wrong forcing him to sell the Future group to Reliance Industries?

Answer
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Juvina Maggie answered.
3 weeks ago


To be fair, there were a number of areas where Kishor Biyani went wrong and worse still, did not take any course correction. Here are a few of them.

· He overestimated the willingness of people to spend in malls and underestimated the impact that online would have, especially when bandwidth became cheap.

· He overestimated the potential of the mall model, which was unviable in the first place as was evident from the numerous malls that were shutting down regularly.

· Biyani wrongly applied the Wal-Mart model. That is surprising for a man who fancied himself as the Indian equivalent of Sam Walton, the founder of Wal-Mart.

· Biyani’s model was more urban and mall driven whereas Wal-Mart had a business model that actually took the store as close to the customer as possible.

· Future malls remained a urban and quasi urban phenomenon whereas the model of Wal-Mart was more of a small town model extended to large areas with discounts.

· A big shortfall for the Future group was that they never thought of the ecosystem as a whole, but purely looked at ways and means of expanding sales.

· On other hand, Reliance focused on the front end sales as also on the back end procuring, inventory management, centralized order level system etc.

· In a way, Kishor Biyani embarked on a reckless expansion program without waiting for the business potential to actually manifest the results, which D-Mart did better.

· The big mistake was too much debt and the debt-driven aggression. The COVID pandemic just unravelled the risks.