Future Group CEO Kishore Biyani has decided that he is not going to invest or operate in ecommerce space for at least the next two years.
“It’s stupid to be in the online space. In lifestyle, the ecommerce industry revenue in India will be around INR 2,500 Cr and losses too will be of an equivalent amount. Mobile and electronics, too, do not make money online. Having burnt our fingers, we have decided to take a break of at least two years before even thinking anything remotely about online,” Kishore Biyani said.
As per reports, Future Group has witnessed a loss of around INR 250 Cr on FutureBazaar.com, Big Bazaar Direct, and Fab Furnish.
The statement comes two months after it decided to close the curtains on online furniture startup FabFurnish, which it acquired in April 2016 for $2.25 Mn to $3 Mn in all cash deal. It was reported that the acquisition did not work out for the group as planned and they will finally concentrate on one brand – HomeTown.
Last year, Future Group also shut down its B2C online retail venture Big Bazaar Direct after finding the business unviable. “I attempted ecommerce four times in my life. We started FutureBazaar way before Flipkart. We lost INR 300Cr-INR 350 Cr in business. Then, we created Big Bazaar Direct and we are officially closing it in next one week. We lost there as well,” Kishore Biyani had said at that time.
Kishore Biyani also said that they will also not invest or focus on the omnichannel business model for its offline stores at the moment.
In the past, Biyani has criticised Flipkart and other ecommerce firms in India for undercutting the market and selling products at below the cost price, saying that it would hurt other retail channels.
The firm now plans on focussing more on core categories such as fashion and food & grocery. “We will invest INR 300 Cr to set up 15 new Central stores this year to take the total store count to over 50. This will trigger our growth rate from this format to 40 per cent where the revenue is INR 3,500 Cr,” Biyani said.
Earlier in April, Kishore Biyani-led Future Group launched the Future C&D (consumer and digital) Lab in Bengaluru. The initiative is focussed on the consumer and digital space to bring in next generation innovations using artificial intelligence, big data analytics, blockchain, Internet of Things, robotics and allied technologies.
(The development was first reported by ET.)