Kishore Biyani says 90% of startups are nonsense while shutting his startup down
Kishore Biyani seems like a hypocrite! Just a few weeks back i.e., on the first week of September, this year, Kishore Biyani had accused 90% of the startup companies to be nonsense because they have no meaning at all. He said that they were too small to create jobs and their only aim was to be acquired by a bigger corporation. He said that they do not create a new economy in any way and their aim of getting purchased by a bigger corporation needed to change. He stated that there were bright and talented people in these startups and that they should work on a bigger canvas and big ideas to reach another level altogether. “They are just building start-ups to sell them; there is no long-term goal. This is what needs to change.” But having said all this, he announced that Big Bazaar Direct (a venture of Future Group) will shut down in a week’s time. The core reasons being:
- Flipkart and other e-commerce companies in India had sold products below their cost price, hurting other retail channels.
- Poor management of franchisees and lack of good leadership and direction from the top management.
[Read news of Big Bazaar Direct Closing Down]
Here are the quotes of a few Big Bazaar Direct franchisees:
- “I did not receive any official notification from the company about the closure. Now we’ll have to wait and see what the company says about refunding our security deposit and other exit formalities. I don’t even remember the last time the company’s representative may have contacted me. I don’t even know who my local sales officer is. But, I got no complaints. The company needs to ponder about its business model as a whole and their way of operating to fulfill the same. There lies the gap. E commerce is not to be blamed. I wish them luck as a lot of sweat has been vested in for this venture.”
- “Apparently, even the middle management is caught unawares by this sudden development, which I understood when I spoke with someone in Future Retails.”
- “Due to inactive staff & bad direction from BBD management it has happened.
Secondly communication gap between management and franchisees is also one of the reasons.”
Kishore Biyani launched Big Bazaar Direct in 2013 with 1000 franchises, with a goal to get 50,000 franchisees by the year end. It was based on a franchisee model. The platform allowed customers to buy Big Bazaar products from their nearest retail outlet. It also partnered with Paytm and Oxigen to allow its users to buy Big Bazaar products through the Paytm marketplace and have it delivered to home. To this failure, Kishore Biyani quoted, “I attempted ecommerce four times in my life. We started FutureBazaar way before Flipkart. We lost Rs. 300-350 crore in business. Then, we created Big Bazaar Direct and we are officially closing it in next one week. We lost there as well.” The group now wants to focus on its core business which is physical retailing and plans to add another 3.5 million square feet to its existing 18.5 million square feet of retail space. Future Group operates a range of retail stores such as Big Bazaar, FBB, Foodhall, Central, Brand Factory, Ezone and EasyDay.
Our view on this scenario
Business environment is highly dynamic in nature and changes frequently as per customers’ tastes and demands. Success or failure can come to any company and every startup needs sound ideas, sound strategies, good leadership and experts on related fields to help the company keep its head above the water during troubled times. Without these qualities, any company is bound to fail as it happened with Big Bazaar Direct. One should always look to improve upon one’s own weaknesses and develop or have sound knowledge on the subject they are talking about before commenting on other people or groups or companies. Otherwise, the person who gives naive comments will become a laughing stock for the public as it happened with Big Bazaar Direct. Due to its closure, thousands of its employees will be laid off and Mr. Kishore Biyani talks about startups not being big enough to create jobs! Lol