Future Retail honcho Rakesh Biyani on Rs 1,500 cr going to customers as savings, Retail 3.0, GST, more
The retail sector is set to benefit from goods and services tax (GST) as cost efficiency increases, Rakesh Biyani, joint managing director at Future Retail, said. Already, sales are looking stronger for the retailer.
The retail sector is set to benefit from goods and services tax (GST) as cost efficiency increases, Rakesh Biyani, joint managing director at Future Retail, said. Already, sales are looking stronger for the retailer. In an interview with Anurag Shah of Zee Business, Biyani talks about the company’s vision, government policies, competition, among other things.
How was the last year, which saw GST rollout?
Overall, last year was a successful one in terms of growth. We did a lot of detailing over the past year with our partners to increase efficiency and capture it in our model to pass it on. The commitment of lowest price is being constantly upheld. Routine items are sold at a guaranteed lowest price. Almost Rs 1,500 crore of savings will be going back to customers from this initiative, which is just the beginning.
How long until GST brings total efficiency?
Efficiency is an ongoing project. I place my estimates at about 12-18 months in which we can extract more juice. I am sure after that too there will be various opportunities. Revising supply chain and warehousing strategies are a time-taking process. Companies like Future Supply Chain have been doing this for a fairly long time for many customers. Their business model is impressive, with a very large rollout of warehousing. I believe that the volume growth can be very large in the next few years, and it will all be passed on to the customers.
Do you think the new e-commerce policy will make things better?
The notifications that came in 2016 addressed the idea of a level-playing field to a great extent. This level-playing field exists if the spirit of that policy is implemented. Unfortunately, this spirit is not being maintained. That is where the real problem exists. When one looks at the complaints registered by the Mobile Manufacturing Association or the Online Vendors Association or the recent Income Tax orders that came out less than a week ago, raising questions over discounts - these are all reflective of the violation of the spirit. Channel orientation, brand orientation - these policies are nowhere in the world. At the end of the day, single-brand stores, multi-brand stores, e-commerce industries, online stores, they are doing only one job-trading. The brand and channels are irrelevant. I think we need to adopt a policy once and for all for the entire trade, simplifying the approach, thinking of it as one unit to be able to successfully counter everyone trying to come around the policies. Although, I would say that when it comes to investment in the industry, there will be no long-term solution until simplification is done.
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There are reports that a global retailer can buy a big share of an Indian e-commerce company. Will it impact your business?
India is full of opportunities. Consumption is only going to increase. There are going to be many more people who will want to get a share. Companies which have built good businesses overseas are going to be interested in investing and buying shares. At the same time, we are working very hard as an India-centric company to ensure understanding of various parts of the country and provide the right services.
How is the implementation of your long-term 3.0 strategy going?
Retail 3.0 is an omni-channel play integration of online and offline and is really about connecting commerce with the customer. It is an ongoing project. Quite a lot of work and effort is being put in to ensure that every single step we take has applications of Retail 3.0 incorporated in it.
Source: DNA Money