A month after Future Group announced plans to shut down its B2C online retail venture Big Bazaar Direct, founder Kishore Biyani has again spoken about his disenchantment and scepticism for startups by stating that most startups miss the bigger picture and work with a ‘smaller canvas’.
Biyani was speaking at The Economist India Summit in Delhi.
He stated that most startups are too small to create jobs. According to a Business Standard report, Biyani said,
I think 90% of the startups have no meaning at all, they are nonsense. I think the canvas of a startup needs to be bigger.
Biyani also took a potshot at the huge number of startups doing aggregation, specifically those in the taxi aggregation space.
He said , “Let’s take the business of taxi aggregation, the revenues of these companies in four-five years would not be more than $525 Mn (INR 3,500 Cr). They are not creating a new economy any which way.” According to him, they just meet people’s need to commute from point A to point B.
Jibing on the fact that most startups are just consumed with the goal to sell themselves (through M&As) rather than having a long-term goal, Biyani commented that this attitude needs to change. Rather than focussing on raising funding and selling out to investors or businesses, startups need to work on a bigger canvas and bigger ideas. He added that “there is a scope of expansion of startups to another level altogether.”
This is not the first time that Biyani has expressed his scepticism for startups.
Last month, when the Future Group decided to close down its online retail venture Big Bazaar Direct, finding the business unviable, Biyani had stated,
I attempted ecommerce four times in my life. We started FutureBazaar way before Flipkart. We lost INR 300-350 Cr in business. Then, we created Big Bazaar Direct and we are officially closing it in the next one week. We lost there as well.
In the past, he had also criticised Flipkart and other ecommerce firms in India for undercutting the market and selling products below the cost price, saying that it would hurt other retail channels.
Despite the founder’s contrary statements, Future Group has not shied away from collaborating with startups. Recently, it partnered with Paytm and Oxigen to allow users to buy Big Bazaar products through the Paytm marketplace, and get them delivered at home.
Similarly, it is also trying to disrupt the home furniture space with its acquisition of FabFurish from Rocket Internet this year.
On this front, Biyani remains positive that while now might not be the right time to run an ecommerce business, they could be disruptors in the future. He said, “We have acquired Fab Furnish, we are trying to be a disruptor. One can always do that and we will do it more when the time is right. Today it is not viable to run an ecommerce business.”
Meanwhile, after burning its hands with Big Bazaar Direct, the group now wants to focus on its core – physical retailing – and plans to add another 3.5 Mn square feet to its existing 18.5 Mn square feet of retail space.
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