Having diversified into many categories over the years with limited success in some of them, Future Group founder and CEO Kishore Biyani on Tuesday said it was a mistake and the company will now restrict itself to food, fashion and home furnishings verticals.
“We have made mistakes. We got into so many categories of business. Now I have decided not to move out of food, fashion and home. Earlier we were into multiple categories. We didn’t have that kind of bandwidth and we didn’t have that kind of resources and we have done too many things,” he said at the Retail Leadership Summit here. He also admitted that the retail major missed the opportunity in the online space.
“We missed the bus on internet commerce so we are getting into data driven commerce now (with its blended commerce model Tathastu),” he said adding that he didn’t have the money at that time to join the fray.
He was critical in his assessment of e-commerce valuations and said nobody understands the economics and the more losses one makes the more valuations they get.
Taking a dig at e-commerce giants such as Flipkart and Amazon, who continue to bleed, he said: “I don’t think I have invested more than ₹6,000-8,000 crore till date in the business.
“The cost of acquiring a customer in e-commerce is 11-20 per cent, the cost of discovery and doing a transaction is 8-10 per cent, the cost of fulfilment is another 11-20 per cent.
“I believe this model doesn’t work, especially in a country like India where 30 percent of fulfilment is internal debt and the margin that you operate on is very less,” he added.