How Big Bazaar’s online bet is keeping it afloat amid pandemic stress

Forum Gandhi Mumbai | Updated on July 15, 2021

Sadashiv Nayak, CEO, Big Bazaar

About 30-35% of our customers have moved online: CEO

While the second wave of the pandemic and the delay in getting approvals for the deal with Reliance Retail have impacted Future Group’s Big Bazaar, the company’s focus on online sales has kept the lights on for the cash-strapped retail company.

“Early trends show that close to 30-35 per cent of our customers have moved online. The frequency of buying has gone up to three times a month on the digital platform, compared to once in a month at our offline stores. About 20-30 per cent of customers online are our new shoppers,” Sadashiv Nayak, CEO, Big Bazaar, told BusinessLine.

Big Bazaar had earlier said that it targeted 50,000 daily orders online. Nayak said the target has been achieved and the company now aims at 70,000 orders daily over the next fortnight.

Pause on new stores

This comes even as Big Bazaar may miss quarterly sales targets due to the pandemic and the delay in the deal with Reliance Retail. The retail giant has paused new store openings because of uncertainty on reopening of malls. Big Bazaar was expecting to achieve pre-Covid level sales by Q2 of FY22. But Nayak said the company had not anticipated the intensity of the second wave of Covid-19. “Sales in April were good but May came strongly at us. Over 70 per cent of our stores are in malls, and malls are shut,” Nayak said.

In December, Nayak had said that Big Bazaar planned to open 16 stores in the next three quarters. Currently, the company has 285 stores.

The Kishore Biyani-owned Future Retail has been facing a cash crunch for over a year-and-a-half now. It is in the midst of litigation with Amazon over a distressed asset sale to Reliance Retail. The litigation is being heard in the Singapore International Arbitration Centre (SIAC) and the Supreme Court of India.

Awaiting clarity on deal

Even as the retail company is awaiting clarity on the fate of the Reliance deal, Big Bazaar has started innovative solutions like two-hours-delivery. According to sources, the company is expanding its digital team and has hired multiple tech executives.

The company has also reduced the inventory cycle churn from a month earlier, to a week now. This, according to Nayak, helped maintain the cash flow with minimal burn on perishables and other FMCGs.

“We used technology, data and changed the attitude of the team members so that the momentum doesn’t break. Though there were a few brands that wanted upfront money, we folded our hands and took those brands off our shelves. These were smaller regional brands, which didn’t affect our sales much,” he said.

In the near future, Nayak expects a significant chunk of sales coming from the online platform.

Published on July 14, 2021

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