Biyani defied convention, proving innovation is the ultimate weapon. He wasn't just a businessman; he was a brand magician, weaving Pantaloons and Big Bazaar into the fabric of Indian shopping. His deep understanding of the evolving Indian consumer, their desires and changing habits, was his secret sauce. But the Indian business landscape is a battlefield, and Biyani's story lays bare the triumphs and challenges he faced. Whether you're an aspiring entrepreneur or simply fascinated by success stories, Biyani's tale offers invaluable lessons. Join me on the Galata Podcast to unlock the full retail revolution!
Tune in to the Galata Podcast as we unlock the fascinating story of Indian retail pioneer Kishore Biyani, through his insightful autobiography "This Happened in India." From humble beginnings to building retail empires like Pantaloons and Big Bazaar, Biyani's journey is a testament to innovation and understanding the Indian consumer.
Whether you're interested in business, retail, or simply the story of an inspiring individual, this episode is for you! Tune in and be prepared to be captivated by the story of "This Happened in India."
Bonus: Share your thoughts on the episode with us on social media! #GalataPodcast #KishoreBiyani #IndianRetail
List of books mentioned:
Want to buy paperbacks of them all? Here's Kishore Biyani's Book recommendation wish list
It Happened In India: The Story of Pantaloons, Big Bazaar, Central and the Great Indian Consumer
“I have also read my fair share of autobiographies written by foreign and Indian entrepreneurs. But no book strikes me more than Verghese Kurien's autobiography, I Too Had a Dream. Kurien's story is of a genuine Indian folk hero.
“ I couldn't help but get inspired by Sam Walton, the iconic founder of the chain. I have learned some of the most enduring lessons of business from a heavily underlined and dog-eared copy of the classic Made in America.”
“A book I would like to recommend to everyone is Stephen Covey's The 7 Habits of Highly Effective People. It provides a step-by-step framework for living and working, based on some fundamental principles or natural laws.”
“Paulo Coelho's The Alchemist and Richard Bach's Jonathan Livingstone Seagull have inspired many of us within the organisation and helped us achieve what others thought impossible”
“Another equally motivating book is Anthony Robbins' Awaken the Giant Within. It explores how every human being can live up to their true potential."
Further recommended readings:
“Among my favourites is Howard Schultz's Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time. Schultz proved that it is simplicity and passion coupled with a spirit of innovation that lies at the root of creating a great consumer experience. There are other equally fascinating books written on retailers like Bernie Marcus and Arthur Blank's How a Couple of Regular Guys Grew The Home Depot from Nothing to $30 billion; lngvar Kamprad's Leading By Design: The IKEA Story;and Marvin Traub's Like No Other Store; The Bloomingdale's Legend and Revolution in American Marketing.”
“Peters' books, A Passion for Excellence and Re-Imagine are both provocative and inspiring. The thought process with which we are today building our organisation is in fact quite similar to that of Tom Peters.”
0:00:
Hey, it's Puneeth, and this is Galata. I am attempting a new format for the next 10 episodes where I'll be taking an autobiography of an Indian founder and diving deep by studying, researching, doing everything that I do for a physically guest, but for the autobiography. And at the end of my reading, I'm gonna take all the highlights and notes, and I'm gonna make an episode out of it. This is the first of that kind without much ado. Let's dive into it. Born in a middle class trading family Kishore.
0:37:
Biyani started his career selling Stonewashed jeans to small shops in Mumbai. Years later, with the launch of Pantaloons, big Bazaar Food, Bazaar Central, and many more retail formats. He redefined the retailing business in India. Incidentally, Keur B'S objective is to capture every rupe in the wallet of every Indian consumer, wherever they are, an investment banker living in a South Mumbai locality, or a farmer in Ali.
1:07:
As large business houses enter the retail space. KishoreBiani is not just concentrating on retail, but aiming to capture the entire Indian consumption space from building shopping malls, developing consumer brands to selling insurance. He is getting into every business where a customer spends her money. Can he make it? It happened in India features, not just his words, but insights and anecdotes from people who joined his rollercoaster ride.
1:38:
Academies, former colleagues, investors, business partners, family members, and college batch mates. The forward of this book really baffled me because it's the daughter Ash Biani, and she wrote something that just captured the person in a very interesting way. As the idea to write this book emerged, I constantly questioned and argued with my father about the purpose of writing the book. So soon I felt that the story had only just begun, and there could be even greater times in the future to share it. But after much discussion, I now understand the relevance of communicating the story to the potential India of tomorrow. I realize that India needs role models who will make it believe that it can happen right here in this country. My generation needs figures that we do not epitomize, but relate and connect with.
2:32:
We need the story of ordinary people who have made extraordinary things happen during our times. This book is indeed very special. It is special not only because it is a story of my father, but also because it dares me and my generation to dream. It gives me the courage to aspire and believe that we can create and change things. This simple story of a dhar who learned while doing makes me believe that with conviction and self-belief, no dream is distant, and to conquer one's dream, one only needs passion. The musings presented here are no images of perfection. In fact, the experience of reading the book may leave you a little beil dirt, for example, that has always believed in the power of spending instead of saving.
3:20:
He strongly believes that the more you spend, the more you aspire and therefore on who. And the mantra, rewrite rules and retain values may puzzle you Further. I hope this book will probe perplex and provoke you. What a promise to make at the forwarder.
3:37:
The book jumps right in the middle at the Subin, which was popularized by Big Bazaar, and this was the brief he gave to his team. It reads, create a day without a season that truly belongs to us every year. The Republic Day was quite close, and it seemed to be ideal. I suggested the Catchphrase 26, code 26, and thus the target of 26 codes of sale in one single day was set a fe and a number not projected by any mathematical equation, but a number bonds simply out of a desire to unlock our minds and to do something truly extraordinary.
4:14:
That is how KishoreVidi usually thinks. There isn't much mathematical calculations behind it, but it just his idea of capturing the imagination of his team and the masters that will be, that'll really come across in this episode. This SIUs Asta then was actually based on a lot of thought that I admire, and here's a highlight that really brings this forward. There are a couple of emotions that determine shopping behavior.
4:39:
The most fundamental of them are greed, altruism, fear and envy. Greed drives the customer to purchase more than what he or she needs. A wide range of options, better products and lower prices generate that increased desire to purchase. Often a customer would consider it a good opportunity to buy more than what she needs and to gift others as well. Higher purchase is also driven by the fear that the current price offer may not be available for long, and so the product has to be purchased right away and envy sets in when one sees others buying and making the best out of a deal. Sub Asta then was successful because we were able to effectively capitalize on all of these emotions.
5:20:
The prices were great, but they were on offer only for a day. Customers noticed everyone else, friends, colleagues, neighbors, heading to Big Bazaar, and they didn't want the opportunity to pass by. With all these emotions working in complete harmony, the stage was set for a huge response. And beyond the thought process of these emotions that was used in the Stan was how he looks at the Indian audience. But before I tell the Indian audience the quote, a start of this chapter is fascinating.
5:52:
Sometimes we, a nation of billion people think like a nation of million people. Uh, AALA shared that code now he looks at the Indian population in a slightly different way. Uh, his way of looking at demographics as different. We divide India into three sets. India one, India two, and India. Three. These groups can be understood as the consuming class, the serving class, and the struggling class.
6:18:
Our study show that India one or the consuming class constitute only 14% of the country's population till recently. All modern detailed formats, including Big Bazaar, were attracting customers mostly from the segment. Most of these customers have a substantial disposable income and form, are part of what are usually called the upper middle class and low middle class. The idea of success ASIN was to expand from the consuming class to the serving class, which is fascinating.
6:47:
He goes deeper into this like India too. All the serving class includes people, like drivers household helps office lift, men was men. These are the people who make life easier and more comfortable for the consuming class or India one. For every India one, there are at least three. India twos making up almost 55% of the population. But India one doesn't care to pay. India. Two, two.
7:10:
Well, um,
7:36:
So, um, that is something that can't be tapped yet because the needs can't be really addressed by the existing business models. But India one, and especially India two, is something that we will go really deep in this book. In fact, this book is filled with insights about Indianness, like this one insight that just came up. Um, India too moves and finds a lot of comfort in crowds. They are not individualistic. There is a definite need for them to do new things, only if they see someone from their community doing it. So while he's designing aisles, he's gonna use this insight so beautifully.
8:11:
I can't wait to tell you that in a bit, but let's move ahead to the next bit. He makes a very valid point where in India, most of us are not prepared for the consumerism that is setting in this country. We really still, this book was written turns on, but we still underestimate how many people are going to fly, and that's why our airports get jammed. We underestimate how many people will speak on phones for how many billions of minutes. And then therefore, our cell phone networks are always congested. We are not prepared for the force of consumerism, which is unfolding.
8:42:
He talks about his way forward. Our growth will be based not on physical assets we have, but on the ideas and solutions that we generate to capture the imagination of the Indian consumer that sort of underlines all his efforts, capturing the imagination of Indian consumer, Ani or kb like everyone calls him in the company and especially in the book. And you will see more and more of his obsession with this as we trade forward. This is how he looks at India.
9:11:
What sets India apart is the diversity and uniqueness of the Indian market. On any given week somewhere, some of our countrymen are celebrating a festival about which most of us may not have a single flu. The rice we eat, the apparel that our women wear, the dialects we speak change every hundred kilometers in our country. There are also a lot of conflicting trends and paradoxes that are evident across the country. Logic and emotions, individuality and social feeling, poverty and affluence, life and lifestyle value and indulgence, and the past and the future simultaneously coexist in India. All these paradoxes converge to make India what it is.
9:53:
But how do you serve an India like this at scale is a question that I had while I was going in the book. And despite the paradoxes, there are two very strong trends that kii observes. Underlying these trends, I feel are two undercurrents that are sweeping through young India confidence and change. Confidence that lends itself to self-belief and a total lack of inhibitions to achieve any dream and a willingness to change or the desire to rise above one's origins.
10:27:
And it is a young generation of Indians who are playing a pivotal role in driving these trends. For example, he, he further elaborates, my parents were born in a nation that was about to gain independence. I was born in a nation that was experimenting with socialism. The new generation has grown up in a liberalized economy and has seen India winning in every arena, be it in business information technologies, sports or beauty pages. They have been witnessed to the era where India is emerging as a global powerhouse. The current generation, which is us, the current generation is therefore simultaneously more proud about being Indian and more modern when it comes to their lifestyles than their predecessors. In a sense, they are far more confident of their place in the world. This is a generation that feels that everything is within their reach and aspires for it.
11:16:
And this is true for everyone, whether they live in large metros or small towns. He has a three C theory that really encompasses this and goes like this, confidence and change, bringing in an unprecedented era of consumption. Three C theory, which is confidence and change, bringing in an unprecedented era of consumption. And that is why we see a humongous increase in consumption across the space.
11:44:
And what's important with KB and for us listeners, is something that I quote next, we have to understand, interpret, attract, and deliver to the Indian consumer in a way that takes into account the Indian context. The concept of Indianness has to be understood if one wants to attract the maximum number of consumers. When we started this company, we believed in this core value of Indianness. For us, Indianness is not about swsi, it is about believing in the Indian way of doing things. We wanted to understand and interpret India in a way that no one else had done. We wanted to rewrite the rules of catering to Indian consumers. Our stated objectives from day one was rewrite rules, retain values. Whew, let's dive deeper.
12:31:
When KishoreBiani started off, um, it's fascinating that a lot of people did not, um, appreciate or acknowledge it. In fact, it was encouraging to find that most people were dismissing us. It was a proof of the fact that we were doing things truly differently. I chose to become an entrepreneur because I wanted to do things my way, changing my belief and my way of working simply because that's what others wanted was never an option. So many of us, including me, want to build things on our own because, because I, I want to do things my way and I don't want to change based on others or what they perceive as good or bad or successful or not. Here's how one of the first early backers of Kishore was I-C-I-C-I ventures.
13:19:
And the minute managing director Renuka Ramnath describes him really succinctly. He's not like the traditional guy who's very articulate, comes into a meeting surrounded by three MBAs and makes slick PowerPoint presentation. This man will come dressed like a
13:52:
I think this is one of the reason why Renuka Ramnath from ICIC ventures backed KB very early on, and it's not really about the model or the result, but more because of the conviction they saw, they saw in KB way back in the early nineties when the first retail chain came up in Mumbai. We used to be a small trouser manufacturer. Uh, we had approached them to that point to stock our brands. Since they stocked mostly foreign labels in the, in those days, they flatly refused to keep our brands. I think that was the day we started to explore whether we could open our own retail chain. Many years later, the owners of this retail chain once again refused to give space to our store at a sprawling mall that they built in Mumbai. This incident further prompted us to explore the option of setting up a real estate fund that could invest in development of retail real estate. Again, doing things his own way.
14:46:
He loves being put down
15:01:
We believe it is the customer alone who decides whether we are successful or not. Neither we not our competitors or investors can decide our success from what we should sell and how to sell it to which formats are successful and which are not. Everything is decided only by customers. So the primary rule of a business is that the customer is always right. Any product, any format, any strategy that the customer disapproved of was changed or closed down Later.
15:30:
In this book, when I'm gonna talk about how he explored and he had a criteria for franchisees to be given out, he took this customer obsession to a whole different level that I'll tell you in a bit. Um, he's always open to suggestions. He is. He's somebody that really observes and is obsessed about observing and learning from people. And in fact, women have provided some of the best insights and inputs on building a retail business. Um, his wife and his daughters have been very pivotal in giving him open critical suggestions and feedbacks. Before I dive in, quick aside, this book is structured in a way in which Kishore is narrating along with it. A lot of other folks, um, stakeholders, team members, investors, family members that are constantly chiming in their perspectives and thoughts.
16:20:
And Kishore Biyani is also reflecting on it and expanding on what they have shared. So a lot of times I will mention specific people. I'll of course establish them for you to visualize and understand the entire, uh, story in a comprehensive way. But that is something I wanna, uh, I'll try tell you that there will be quotes from other people in this as well. This is about his obsession with customers. Hear this out till date, most of my Sundays are spent outside shopping malls, watching human behavior, watching people behave and interact with others and their surroundings is probably my second biggest passion. The first of course, being Hindi films.
16:59:
I have tried to make every one in my organization an observer of customer behavior. And now some of the best business ideas come from our colleagues at the shop floor. They are trained to study and understand customer needs. My job is to transform these observations into actionable ideas, and that is how obsessed KB is with observing customer behavior. Some part in the book, somebody tells that it is scary how deeply KB understands his customers. Uh, I'll, I think I've highlighted that
17:38:
Then. Um, here's somebody else telling how decisive KB is. Um, once he has taken a decision, he moves fast. Yet at the same time, he is always looking around for learning and is humble enough to seek it.
17:52:
And here's what an early investor and a professor from Mumbai Shivan and man Keker observed about kb, which again gives me insight about how he looks at the retail business. The key to success in the retail business in India was firstly getting the model right and then scaling up quickly before the competition began copying the model. When we met KB for the first time, he said, retail is like riding a bicycle uphill. If you stop pedaling, you will slide down clearly indicating that he understood the need to scale up fast. The opportunity that knocks at one's door doesn't remain there forever.
18:29:
KBS strategy has been aggressive, but he has always taken calculated risks Rather than playing mindless gambles, that strategy has paid off and put him way ahead of the competition. Now we get into the history of KB where it all started. How it went about it directly doesn't start chronologically. Um, it still jumps around, so bear with me.
18:54:
But the insights, the approach and the comprehensiveness is very evident. Pantaloon retail was incorporated inOctober, 1987. The company then had a different name, mostly man's wear, MANZ wear and could manufacture 200 trousers per day. InAugust, 1997, we forwarded into modern retail and with an initial investment of Rupees 30 LA and opened a Panta Loon's family store in Guha called Kata. Four years later in 2001, we opened the first big bizarre store.
19:25:
Subsequently, we launched a number of retail formats and got into different businesses in the consumption space. Early on, he talks about how he was impressed by Sam Walton, the founder of Walmart. He says it outright where I couldn't help but get inspired by Sam Walton, the iconic founder of the chain, which is Walmart. I have learned some of the most enduring lessons of business from a heavily underlined and dog-eared copy of the classic Made in America. Sam Walton was the original master of rewriting rules.
19:58:
He never followed the existing patterns of his time. He studied the market and developed a model that truly suited the American context. Taking my lessons from him, I couldn't have blankly copied the American model for the Indian context. I really assumed going into this book, oh wait, this must be a copy of Walmart in India. But it surprised me and took me completely in a different zone. When I got to know which store KB and his team obsessively studied, and I say obsessively studied, you will find it out in this episode, a store into India that they completely cut, copy, paste and scaled to unbelievable heights by, and it's not Walmart.
20:41:
We'll get into that as well. Um, while designing our big bizarre stores, the core idea what has been to merge the look and feel of the undies with modern retail features like quality, choice, and convenience. The Indian consumer needs an indigenous solution to her shopping needs that gives her the best value for money in an environment where she is comfort. Each and every store in India needs to be customized after taking into account the diverse culture tastes and preferences of every city or locality that we want to set up a store in. And that is why it can't, the Sam Walton's, uh, Walmart approach can be cut, copy and pasted. Um, you'll have to make it as localized as possible and still, um, the critiques, and this is, this is where I I'm telling you, the critiques will never go despite solving the model for a while.
21:31:
Here's what he says. I think we have achieved some amount of success in what we have done. Now, even many of our critiques perceive us to be a serious player in the business. The number of critics hasn't changed.
21:43:
Their questions have these days. I'm often asked whether I'm planning to sell off the company anytime soon. And my note is
21:53:
They will always be there. There's something about observing and exposing yourself to as many folks as possible, which KishoreBiani did. And here's, and here's another person mentioning that he has met the rich, the famous, the dumb, the co competitors competitor, the worldly, the unworldly, the gurus, the whole god damn world. He's open to meeting anybody who has something new to offer. What he really does is put himself in a position where he exposes himself to various people and ideate and cates and shapes and refines tests and challenges. What he is essentially looking for is people who can stimulate engage. And that's why I feel the more broadly you expose yourself to so many people, the more you get the time to ideate, to understand their perspectives and to incubate stuff in your own mind.
22:43:
And it refines and clarifies your thinking. Another point about critique. There are critiques who say that we have been lucky to have achieved whatever we have till now. My reply is yes, we have been lucky. We were fortunate enough to be in the right business at the right time in the right country. Yes, it is true that he was at the right time in the right country, in the right business, but it took him 15 years to get to that moment where he realized, oh wait,
23:18:
Here is where he really starts telling about his origin story. Um, he came from nimby, a nondescript village in Nabo district of Stan. That's where his grandfather and his roots are from. And I, I was surprised that NIMBY is just like 117 kilometers away from where my family roots are, uh, which is in Jatar. And this really connected me even more. 'cause most dand that I'm surrounded with, Marba dand are very limited in their thinking.
23:46:
And I think that is what Kishore breaks through and builds what all he builds. He talks about how in NIMBY and in Stan, there are so many faires that happen, um, lar that happen. And, and he came to realize later that commerce is never the reason. The atri of Indian bazaars. They are more of a social melan, more of a socializing space. It's never about commerce. Um, that's a very different perspective to look at meas, especially in Rajasthan. Um, I can describe you.
24:14:
The Meer, uh, held in the outskirts of the town of nimby. Of course, I remember watching camel races, cock fights, puppet shows, folk dances, tug of war, and a host of other activities. Cows, oxen, horses and camels were on sale as a sunset. Local folk musicians filled up that masa with melodies that would resound far and wide across the tranquil desert sands.
24:36:
As I would realize later, commerce is never the reason the attri of Indian bazaars, they are more of a social melan, more of a socializing space. So his grandfather, late Ani, he was the one who moved from NIMBY and came to Mumbai in a completely new environment. He set up a clothing shop and once he started building it up, he called all his six sons to help him in the business. And they were all permanently settled in about by 1950s in Mumbai. It took his grandfather about 15 years to move from NIMBY to Mumbai, and they saw through some really tough times in the business. And, um, he says that however, he had grown up in the deserts and wasn't one to give up easily. He started up a partnership concern and, um, procured and marketed polyester knitted shirts.
25:31:
And around the same time, he also got a big distributorship of Ashoka Industries, which is a textile company that is based out of Nepal. So you see the grandfather moves to Mumbai, AK clothing shop gets a distributorship, and that's where the six sons join in 9th of August, 1961 is when KishoreBiyani was born. Um, he was the second son of Sri Lakshmi and Biyani and ri Mahi Goda Biyani. And the thing is, the year he was born, he, according to his family, had the perfect kli. And my family members tell me that my horoscope was an extremely encouraging one, so they were quite sure I will be successful.
26:11:
Fortunately, or unfortunately, I haven't yet bothered to look at that horoscope
26:34:
The business is doing well and it is still a very, uh, big joint family. He grew up among 12 cousins and siblings, and most of them went to the same school. Uh, man of Mande High School. There are signs of him being a rebel from the early on. Um, from a fairly early age, I was completely against any religious practice or rituals and was quite open about it. The kid who had a perfect horoscope was soon turning into a black sheep of the family. I was always eager to get into an argument with my elders at the drop of a hat. This actually reminds a lot about me,
27:12:
Uh, here's what he says about Kishore. Even as a kid, he used to act and behave differently, much to the annoyance of some family elders. His room was filled with posters of cars and cricket stars, but that was still okay, which seems okay to me as well. What really troubled others was his inclination to question every social or religious practice followed by the family. Someone had to give him a sound explanation before he would do anything religious. A particular instance that I remember is that our family used to follow an old tradition of worshiping the Hindu goddesses who supposedly prevents the Reddi smallpox disease. The ritual involved eating only cold food for a certain number of days, and here was Kishore who would refuse to follow such a dicta. His questioning was simple.
27:56:
If the school textbooks say that smallpox has been fully eradicated, why still follow these rituals
28:43:
You'll see this pattern repeat over and over again throughout his journey. After he finished his schooling from Man of Mani High School, he went to HR College in Mumbai and suddenly he was exposed to a whole different world. He sort of had a cultural shock because of the diverse class, and he immediately made a very large group of friends and from varied backgrounds for a long time to come. Girls were quite scarce at HR college and he would be very hesi hesitant about interacting with them.
29:13:
In fact, he says the closest he is come to a significant relationship during his early days in college was a girl who lived 1200 kilometers away in K Katar, a pen friend who I always wanted to meet but haven't managed to tell date
29:41:
And there were about four close friends, close friends who would meet and they would discuss everything under the sun, movies, music, cricket, current affairs, and sometimes business as well, which is very common in, um, colleges, usually just basically chilling. He talks really interestingly about even at a young age, while he is still in college, um, there was this wave of ban that most of us do not know, at least those were are in the, in our twenties. We do not realize it. But there's a huge wave of dwe banani in the seventies and eighties. And this is what inspired a lot of them to get into business.
30:12:
And it showed it to KB as well. He would visit ob a hotel. Um, there'd be a summer cu summer, k, uh, I don't know how to say it, right, summer K restaurant that he would visit occasionally with his friends. And the reason was, the reason why I like to visit Obry Hotel was because I came to know that Banani came to the Ho's Health Club almost every other day.
30:31:
Even if I could get a glimpse of him, I would be overjoyed. Reliance in the early eighties had established itself strongly. I was quite fascinated by the company and its growth. I started reading about business during my college days in Dero. Banani was my first mental mentor, my personal role model, and he was one of the few businessmen he could relate to because he came from really modest background and still scaled through the pinnacle of business in India. Was and purely based on his own abilities was really inspiring. Not just to kb but to the entire generation.
31:06:
In the eighties, even during his college time, he had the pension to follow his own nose. Like he says, that he, he did not want to study science. It was not his cup of tea. He didn't want to study ca.
31:17:
That was also too, uh, exhaustive for him. Here's what he says about it. But I was willing to learn completely unrelated things that often surprised my batch mates. I learned typing, did a course in import and export of garments, and joined a program run by the Silk Manufacturers Association.
31:36:
Mira. At one point I almost decided to become a chartered accountant and even clear the preliminary exams, but then I figured that ca coursework was too specialized and not meant for me rather than a specialist. I wanted to be a generalist, a jack of all trades and master of some. He was really self-assured, even during college. And, uh, a friend tells this, really establishes it. Um, it could be, uh, a youngster's, uh, um, audacity to say that, oh, what is that? I can do much more better.
32:08:
But this is something that really resonated with me as well. Um, Sanjay Sheik. He was the batch mate of, uh, Kishore, and today he is married to Kor's cousin and is also a very close business associate. He says something about kb In his college days, Kishore never had a mentor as such. Um, this remains through throughout his life as well.
32:29:
Kisho never had a mentor as such, but the thought of starting his own business was there in his mind. Probably from the second year in college, he was clear that he didn't want to join the family business. He would talk about getting into the garment trade and doing something very different. He obviously hadn't dreamt of what he is today, but he definitely had a big picture in mind. He was a keen observer and a very good judge of human beings. Even in college, he would judge people and associate or dissociate himself from them accordingly. He wasn't particularly vocal about it, but he made it clear that he didn't like loud people. But basically he was an introvert and shy by nature, which have established so far with his pen friend in Calcutta.
33:10:
The attitude to challenge everything was evident even in those days. At that time, a retail outlet in Mumbai, Chirag then was the most popular shop to buy shirts from. They would sell a large number of shirts every, every month, and he would say, what's30,000? I can do better?
33:27:
He was always very self-assured, even in college. And two topics that really caught his attention was advertising and marketing. In fact, he says, advertising and marketing as subjects always fascinated me. I keenly studied advertisements, attended marketing seminars, and for a year did a course in the latter as well. Something that made a very big impression very early on, um, while he was still in college.
33:55:
And something I wanna mention is his first brush with retailing was when as a teenager he visited Century Bazaar in Central Mumbai, it is bigger and brighter than what is what it is today. It had low ceilings that made it seem crowded and everything was sold over the counter. From Al records to Apples, the sheer size of the place and variety of merchandise ga got etched in my mind. It was probably then that I decided to create something similar or even better than this. He was a very avid observer of trend. He had a nose for trend and one of one such trend was Disco Dania that he observed very early on this bit. That really shows me that he had the organizational wherewithal to pull something like this together.
34:42:
He was able to sniff a trend and then figure out a way, uh, to not only just mimic that trend and, um, capitalize on it, but to do it in a much more larger and grander sense. Dia health during the Festival of Dasra is a traditional Gujarati dance form. Young girls and boys dance in groups to the sound of folk music and world around in circles within a set area. We used to have a dia festival in our housing compound as well, but it was extremely monotonous and boring. So they had dia during the Sharah and their housing compound. Uh, it is extremely monotonous and boring.
35:16:
Rajesh Roshan at that time was my, was my favorite music composer. His music band used to play live music at a Dia Esteban in jhu In the first year of college, one of my friends took me there and I was completely taken aback by the scale of the event. There were more young people at one place than I'd ever seen, and they were dancing to live Bollywood music being played by the band. The entire atmosphere was quite electric, and we had an amazing time then and there.
35:41:
I started wondering why couldn't we replicate this at our locality next year and make it even bigger event. A few months before the Shara, I got together some of my college friends, my cousins and some other boys from the locality and explained the whole idea to them. Not all were convinced, some wondered whether converting a traditional festival into a disco like event would work. I was sure that it would and decided to go ahead with it.
36:05:
We hired strobe lights and signal lights to create a lightning effect similar to one at the new desk coming up in town. A music band that played in some Hindi films was hired to belt out the latest Hindi movie. Numbers synthesizers and other electronic musical instruments replaced recorded folk music. And that added to the whole novelty value. I was quite sure that the event had to be bigger and quite different from what was going on till then. These were the late seventies and all these events weren't really common. Even in Mumbai, the invites to the event was called Passport, suggesting that it would be an experience no teenager could afford to miss.
36:42:
I was even able to rope in a couple of advertisers, mostly by Coke things, our uncles living in the same locality. We paid for the banners and that took care of the costs. When the day arrived, we were all taken aback by the turnout. Crowd management, though we hadn't heard of the term as yet, was a major issue at hand.
37:09:
It tested my organizational skills to the extreme, and I was quite satisfied with the way we had managed to bring in advertisers and sponsors. Looking back, I think this was the first popular trend that I picked on early and was able to capitalize on it. The event had struck a chord with many youngsters, and I was an instant celebrity within the residential area in my entire friend circle. So in the final year of his college, he starts working with his father and his five brothers and two elder cousins who've already joined the family business.
37:40:
And his experience is, well, let me read it for you. While still in college, I had decided that I wasn't going to continue in the family trade. I saw little reason in becoming the ninth member of the family to get involved in the same old routine. I realized I was not made to work in this kind of a business. They were mostly into the trading various kinds of fabrics.
38:01:
They all seemed to be more inclined to towards preserving the business the way it was. I trusted my own nose for business and felt the need to break away from it and start something on my own. What I also found very disagreeable in the business was the obsession with financial control. The business was following a modified version of parallel, which is, uh, a traditional form of accounting practiced mostly in the Marva community in India. It's like a single sheet that tells you where your business stands that day.
38:32:
Um, I disliked it from day one. The parallel systems allows one to micromanage, but it doesn't help one to grow the business. And if there are only accountants in each part of the business, where are the entrepreneurs going to come from? Which is actually a very deep perspective.
38:47:
I completely agree with them. I think today, um, most Mardi big businesses do not follow Parla system at all. While I studied the barlas, I realized even they have also passed on from following the Parla system. And most businesses, in fact, even in my Mardi family, we don't follow the Parla accounting. And here's, here's a very interesting observation about him at the office when he was there by KishoreShort's father.
39:12:
Um, and he quotes it brilliantly. Kishor would come to office and within two to three hours he would be irritated and leave. He neither liked our attitude nor our approach towards the business. While he wouldn't confront us directly, it showed on his face. He would ask, is this a business at all? It was a trading business, and we all were aware that the margins were too low to sustain. He suggested that we should set up large manufacturing facilities, but we didn't want to take large risks and were obviously quite hesitant about it. Again, accountants micromanaging and running businesses.
39:51:
40:28:
I borrowed it from him and showed it to some people I knew in the garment trade. A few weeks later approached Jupiter Mills, one of the larger government owned textile mills located in Mumbai. Some friend had suggested that they were planning to make stone wash fabric, and I placed an order for 200 meters of the cloth. Then I tried selling these to a few Garmin manufacturers and a few small shops. Some other traders too had started introducing this fabric in the Mumbai market.
40:51:
And much to my surprise, it became quite popular among the trendy college going crowd. In the next six months, I was able to sell a few lacks of rupees worth of stone wash fabric. That's how I made my first profit. By now, I was fully convinced that I could chart my own entrepreneurial course. In his words, he had tasted blood and he was confident that he could chart his own entrepreneurial course. Now remember, this is still 1982, 83, where he made a few laxs of profit in his first venture. So of course it gave him the confidence and the moolah to move forward in most Marva families at his time, even until late, um, right after college, uh, you get your degree and then you get, get
41:37:
Uh, which also happened in Kbs case as well. Uh, his parents introduced him to ti and after six months of courtship, they got married in 1983. And even at his wedding, sheer rebels nature that comes through because he didn't want to wear over decorated shevani that he was supposed to wear on the day of his marriage. So his, his friend, uh, Sanjay, uh, who I mentioned earlier, had to rush and get a regular clean white shevani. And that also he wore very grudgingly. Um, but then he acknowledges how for the next 23 years up till the publishing of this book, it's his wife who has lived with the maximum share of such tantrums.
42:17:
And yet over the years, she's really reinforced his belief, um, in himself and given him immense amount of suko and courage. What is suko? Um, suko is assistance and support in times of hardship and distress. So she gave him immense susur and courage. Um, she has taken all his erratic schedules in her stride and also accommodated what his friends call his finicky nature. And here's, uh, something about sanha, which, which is also very intriguing of her deciding to marry somebody who's this upfront.
42:49:
Now, uh, now before even the wedding, um, he had a reputation that preceded him. And if that wasn't enough, he was very vocal about his scenario. When he first met her, hear this out, his reputation of being a rebel preceded him. Even before I met him, many people cautioned me that he had a different outlook towards everything in life. We met each other and we were engaged in two days. I somehow found him interesting and good to talk.
43:16:
And frankly, I didn't care about anything else. I didn't want my husband to be traditional or like some of the regular marati boys who used to wear strange rings or funny dresses. I had grown up in an open environment and he suited me perfectly well. He wasn't in the habit of showing off. And whenever we met, he was just himself.
43:34:
But before marriage, hear this out, but before marriage, he did warn me, warn me that he was very different from all his relations. And he may move out of the joint family structure, which also means the joint family business. He may move out of the joint family structure. He wanted to do everything on his own. He didn't look for or expect support from any of his family members, even during the wearing ceremony.
44:00:
He had to be forced to perform all the customs and rituals right from the beginning. He didn't pay much heat to advise from family members only because they were family. In any case, few in the family could really grasp or make sense of him and his thought process. They all had merely resigned themselves to the fact that he was different. But no one really expected anything grand or spectacular from him. However, one positive thing was that while my father-in-law did not encourage him to pursue his own ideas, he did not prevent him from doing things on his own either. Wow, I need a san in my life who can
44:43:
But wow. Um, that's a pattern I have observed, uh, in so many founders, including Captain Gina that I'm gonna cover soon. And, um, Kumar ber, they have really, and even Ra Murthy, which I'll also be covering in the 10 episodes that I'm planning for this, with this kind of a format, they've really lucked out on getting a companion who's just o
45:24:
My father and uncles, much like most other entrepreneurs in India, were preservers. I consider myself to be both creator and destroyer. Preserving the status quo has never been my cup of tea. A continuous process of change and of growth has to be there in every business. If a business doesn't grow and evolve, it is not an enterprise at all. Now, Indians have a lot of entrepreneurs, probably the highest number of entrepreneurs in the whole world.
45:51:
The primary reason behind this, which is, um, Indian entrepreneurs not growing in scaling immensely, uh, despite being so, so large in numbers, I think, is that our family system works against entrepreneurship. Parents discourage their children from taking large risks or getting into uncertain territory. They constrict their vision and the ability to think expansively. From my own experience, my family reluctantly agreed to what I chose to do, but never encouraged any of us to think beyond our means. They were quite conservative, and I have found this kind of limitation even among other, so-called business communities of India, the Gujaratis, Parsi, CHES, et cetera. And I agree with him family, as much as it can be a launching pad, it is also, um, restricting. He did not really have a mentor throughout his life. For him, it was mostly the market, the customers and his obsessive studies.
46:45:
And he, he really outlines this. I did not have a mentor and most successful entrepreneurs don't necessarily have the luxury of having one. I created my own mental mentors, studied various subjects, and eagerly sought knowledge. I strongly believe that there is a hard and artist journey that one has to undertake alone. I was lucky that I understood very early on that I had to do everything on my own and that no one was going to help.
47:11:
Whew. That is my pursuit with this podcast as well. All of these are my mental mentors, and that is why I'm obsessively studying them and making podcasts with them. Sometimes I'm lucking out by getting them as guests and asking them questions they want to ask, but sometimes I'm not able to.
47:30:
And that is why I wanted to bridge it. I really connect with what he's talking about, his definition and approach to entrepreneurship. He says entrepreneurship is about thinking big, believing in your own ability and going ahead with huge risks, even if you're aware that some of the ventures may not be successful. It's also about making decisions, leadership and about making your colleagues believe in your dream. Building an enterprise is a dream, a vision, and in my case, it kept growing. Every time I reached a new milestone, the one crucial thing that helped me was my ability to think in terms of a mass customer base and focus on a single-minded pursuit of growth. I just couldn't think anything elitist.
48:15:
I have never understood people who spend a few lags on a pen or a watch, none of my businesses will ever cater to them. Instead, my biggest fear is getting into a situation where I lose touch with the public. I'm almost paranoid about it. Our business is entirely dependent on observing people, understanding their emotions and catering to their needs. It has been our imperative as a mass player.
48:39:
Despite stepping out of his family business, he really appreciates their classical shop setup of a dukan. Let me read that out for you. There's one thing that I found worth learning from our family business at our shop. In Alba de, we would sit on gadi like beds, thick mattresses supported by round pillows.
48:58:
One still finds them in the old business districts like Kaba de in Mumbai or Baha Baar in Kta. While it wasn't just the GDI that I liked, I admired the basic structure of the setup. The s on the, or the owners squatted on the GDI in a corner and was surrounded by the m which is the chief accountant and his deputies. The deputies could talk directly with the S whenever they wanted. Accounts were without vouchers on the statements itself, and the C could directly interact with his clients and customers. So this reinsured like a direct flow between, uh, flow of information, insights, and knowledge from the customer front to the C. And a lot of present day businesses have a lot of bureaucracy systems and things in place that that increase the gap for critical details, um, to go from the ground up to all the layers of the organization.
49:49:
And that is why he was very insistent on getting as few layers as possible between him and his customers. And I think in this book that I realized, he has got it down to three level, three layers. Um, the SAT and the Unim and the accountant, the customer is just two layers because they're just one step away from the Unim and, um, from the customers. Thes is just one step away.
50:10:
So it's almost like two layers. Uh, organizations that allow insights and information to flow freely will be the ones to come up with the best ideas. Significant delaying and creating a seamless organization is the only route to success. As of now, we have five layers of bands within our company. I don't see any reason why we can't do with just three. The information gathering layer, the knowledge creation layer and the strategy layer, reducing to two layers, like the state may not be possible, but an organization with three layers can be created, thus building a completely seamless organization.
50:42:
And that is going to be one of his primary objectives, um, in the next 10 years, hence of publishing this book. I like the concept of three layers. Just like there's like the information gathering layer, there is a knowledge creation layer and the strategy layer, which really epitomizes or simplifies entire business from like five layers to three layers. I find it fascinating and it also made me appreciate the setup that my dad and my uncles have and, uh, realize how simple their setup is and how nimble it is because of having just two layers.
51:16:
Thank you kb if you're listening,
51:41:
It took him 15 years of active looking to find. Over the next 15 years, I kept looking for a beachhead to realize my dream. For those 15 years before all of these started, he hopped, skipped and jumped or stumbled from one business to other. Um, I'll try to go into a few of them so you can understand what they were.
52:04:
And these were actually very trying times. Um, but he was very fortunate enough to have the support of two family members, his wife primarily, and uh, his younger brother Anil, who was also helping him in whatever he was doing. But these were very trying times still. He got his hands dirty. I like says, as much to the displeasure of my family and well, I got my hands dirty in multiple businesses all at the same time. Some of these businesses were moderately successful, but most of them had to be closed down after a few years.
52:34:
However, in some way or the other, each of these businesses contributed to my understanding of customers and formed the foundation of what is today our company. One of the first things that he started off was WBB, which, which is a brand of fabric for men's trousers. And W BBB stood for white, brown, and blue, which are the only three colors used for men's trousers, um, back in the day. So it was very smart and catchier name for a brand.
53:00:
However, his family did not agree for it. And, and here's Anil, uh, who's his younger brother telling you about this. Uh, around this time, Kisho did three dramatic things and these are dramatic, hear me out. The first was naming the brand.
53:13:
WBB. The traditional way was to name a product after the name of a God or a family member like Mojave Saris or um, Cy Silks. But he had no intention of that nature. He believed that the brand should relate to the products. Then he went ahead and decided to spend a few lack rupees on advertising. Again, something that most people felt felt was fullheartedly. He even hired an advertising agency for it. My uncles would often speak to my father and point out how even before he had showed any results, he had drawn up an expenditure plan that was scary. However, it was a third step that really took everyone by surprise.
53:51:
Oh my God. The family had 600 square meters of land in an industrial area in Anri, a northern suburb of Mumbai. Kishor had taken the initiative of constructing a two story building and we were planning to set up a couple of looms over there. One fine sunny morning, he went to the Kalba de office, picked up a typewriter, a chair and a table, hired a tempo. And along with Raju left for the Anri office. Raju is probably a help. At that time it was almost taboo for us living in Mulbar Hills to travel 25 kilometers to far away and ha for work.
54:28:
But now everyone was convinced that he had gone crazy
54:55:
Whoa, he had a nerve and I can really, I can feel that he really believes in the power of branding. And this comes across in the evident success of WBB. Power of branding also became evident with the success of WBB. The next step was how could we take the brand ahead and add some more value to our products and start to compete against the big boys in the business? Because at this point, um, he was already selling about 30 to40,000 meters of branded fabric every month.
55:25:
And, uh, he really did a good job at establishing WBB. Now with this short success, he goes ahead and decides because he was just selling fabric. And back then you'd buy fabric, you'd go to your tailor, get it measured, cut and stitched. And that's the model that was the norm. So having tasted success, um, where he was getting about 30 to40,000 meters of branded fabric every month, he decided to take it a step ahead. Um, so it took about 30 to 40 trousers stitched at and on, and showed it to some shop owners because he wanted to go ahead and start selling ready-made trousers, which was actually very bold. Um, but none of them seemed interested in doing business with a small company like ours.
56:08:
By the end of 1985, where the help of another friend of his is set up a 400 square feet shop at CR Tank near Bombay, central Railway Terminus, it sold men's trousers and we called it Paton. That was my first retail experience. Now he had to get into retail because no other shop was willing to take his ready-made trousers, classic founder mentality. He's either gonna go straight to the solution, he is gonna take the sideways.
56:34:
If you don't give him the sideways and go below your legs or between your legs, but he is going to go, you cannot stop this person. And while he was doing all of this, those 15 years of struggle, those trying times, I believe what his wife tells, um, is unbelievable. I, I think the power of having a partner that understands you and is behind you through and through is so important. It's really comes across here.
56:57:
Uh, UR
57:38:
Uh, he would go to the shop in the afternoon, come back all excited and spend the whole evening telling me how two or three trousers got sold that day. Selling readymade garments didn't make sense during those days, and no one took him seriously. Uh, even family members used to find it funny. Often people would come up to me and say, we are not Taylors.
57:58:
Why is he doing the Taylor's job? Fed up with such remarks. I would often nudge him and all he would say is,
58:20:
Whoa, Sanita, big kudos to you. After seeing a little success with the trousers he decides to take, he decides to get into manufacturing of trousers. He tries to set up the manufacturing facility, ropes in really important people, uh, despite being a small company. But then it fails because of union problems in and around that area.
58:39:
Despite having tasted success again, still, this teaches him a very crucial lesson that he was able to get somebody, uh, very important to join him leaving a big company, which was, so she saying. And what he learned from him was, um, the importance of making quick decisions. He taught me how to make decisions and execute them well. He was my mentor for some time to come, and we still maintain a very close relationship. Here's the first view of, so San gets when he meets Kani Now.
59:05:
So San is, um, the founder member on the board of Pantaloon Retail now, but back then, he was a chairman of national textile mills in South Ashra that owned about 35 textiles mills across the state, including Mumbai. And he got him to leave that and get into his, um, small company. And here's his first impression. My first impression of Kisho was of a young, timid, but honest boy. So Kisho must have been about25, 26 by now. He had all already briefed Krishna, who was, who was Krishna, was the one who used both of them on what he was looking for and hardly spoke himself.
59:42:
But when he finally did, he made lot of sense. He had a very clear vision of what he wanted to do. A ve a good understanding of textiles and was up to date with all the market information. The initial vibes were very positive. However, having been associated with large corporations throughout my career, it was difficult for me to imagine that I would be involved in such a small venture.
60:05:
But Kishore had done his homework well. The business plans and the profitability figures on paper look quite genuine and exciting. In retrospect, I find that he had visualized this as an opportunity much before anyone else had. Probably the same is true for his success in retail. Neither money nor success has transformed him. He still has the same simplicity. He has done a fantastic job. But what's more important is that he's a wonderful person. This is fascinating because getting somebody like that early on in your venture really reinforced, uh, KB that he's on the right track. The manufacturing facility called was called Dr.
60:39:
Synthetics. It had a very brief history, uh, but the experience of managing a manufacturing facility gave him a toehold to make an even larger leap, which we'll get into now. The first community started before which became Pathon, and then Pantaloon was Man's Wear Private Limited, which was incorporated in 12th ofOctober, 1987. He says, I was a little, little over 26 years old and my last five years had been spent understanding the textile industry.
61:06:
We started off as a garment manufacturer, launched a couple of brands, got into franchising in direct marketing, and 10 years later plunged into modern retail. During this time, the company's name changed from man's wear to Pantaloon fashion and subsequently to Pantaloon retail reflecting the changing nature of the business, classic creator and destroyer in motion. He started the company with a seed capital of seven lack rupees and an initial production capacity of about 200 trousers per day. And the trousers were sold under the brand name of Pan Pantaloon. And, uh, and he doesn't really remember what inspired him to come up with the name of Pantaloon. I can understand Paton's pant, uh, but Pantaloon is something that he doesn't know what inspired him for. He says it was a heavy dose of the Italian fashion magazines that I used to buy often.
61:53:
It almost sounded like the Urdu word for trousers.
62:21:
The main reason for that, of course, was the rupees 16 lack. We spent on advertising and brand building alone. My goodness, you starting with a capital of seven la rupees and you make a turnover of 30 lack rupees, but you end up spending 16 lacks on advertising and brand building. You spend, you end up getting a loss of eight lack rupees at the end of an year. So you've pretty much burnt all your seed capital and some more who, you know, he goes on to say, marketing advertising and the power of branding had always held a deep attraction.
62:55:
For me. I feel an advertisement captures the people behind the brand, their way of thinking. And what has gone into the making of the brand. I studied advertisements very closely and interpreted organizations based on the ads they carried. I wanted to position our company as a fashion house, and we spent
63:27:
63:56:
This is narrated by his brother, Anil Biani, younger brother. Um, kale Merchant used to work with us as a technical consultant and machinery indenting agent. He was aware that Kishore was looking for more advanced weaving machines. On a trip to Germany, he came across a distributor for these machines who was willing to sell 24 weaving machines of the latest technology. He called up Kishore and asked him to fly down to Germany, take a firsthand look at these machines and negotiate the prices. But Kishor didn't think twice and asked him to immediately place an order.
64:26:
He told KH that since his own understanding of technology was far less than that of Kale, it was better that he closed the deal as early as possible. Till date, whenever I met Kale, he reminds me of this incident. How can a person strike such a huge deal on the phone? He wonders A big picture with a hundred such machines was running in Kor's mind and a few acro that we could have saved from bargaining really didn't bother him.
64:56:
65:27:
And this is what happened. I suggested to him that we could set up a Panal alone franchise shop that would sell only our trousers. A franchisee network seemed to be an ideal way of ramping up our reach across the country. He willingly agreed to it.
65:40:
And our first franchises store opened in Goa in 1991. It was called Pantaloon Shop. And once that shop opened, I wanted to set a nationwide franchise network. And the next Pantaloon shops came up in Cochin, Erna and Kela kva and on the in Mumbai and on CG Road and a Chen Tea.
65:58:
While he was doing all of these expansion, he had secured a distributorship from Arvind Mills for the genes for the denims, and that was giving him sufficient revenue that helped balance the expense of this growth that he was having with Pantaloons. Now, but while he understood and developed the denim market for his own self through Pantaloon, it became very clear that he had to create his own brand. So he started Bare Necessities, which became one of the brands which Pantaloon carried, and he began scaling that up. So by the end of 1991, there were 22 of them across the country, or 22 his franchisee networks.
66:37:
And most of these were small shops located in popular shopping area. And soon they, they not only just focused on trousers, but they also expanded to shirts, trousers, sports, denim sports, and denim bear socks, ties and handkerchiefs. So you see these, they have expanded to about 22 stores by the end of 1991. And here came the challenge.
66:57:
They needed more capital to grow further. So the only way to raise funds was by approaching the stock market. The liberalization policy brought in by the new government in 1991 had boosted the stock markets. Not only was the sanex on a high, the primary market was seeing an unprecedented amount of activity. So in 1992, they announced an IPO In Mumbai de and m, the bar stock exchanges, there were different stock exchanges back then, like they are even right now.
67:23:
There were only two, but they were multiple back then. And they raised 225 black rupees during the initial public offer. They, they Ted 60% of their holding to raise2.25 cores, and it went well. They were able to raise it, and I always seized the opportunities that came my way. And raising money from the stock exchange was an opportunity I didn't want to let pass. There's a way of excitement.
67:46:
We saw this, the new liberated economy environment at the time, and capital was a major constraint for us. And a lot of entrepreneurs had begun to approach the primary markets in the early nineties. And investors on the other hand, were putting their stakes into every public offer being launched. But he also says, we didn't allow the stock market performance to affect our business plans. We continue to experiment and learn on the way. Of course, they had poor evaluations for a while, which obstructed them to raise further capital.
68:14:
And this is what I say, but then business isn't a cake and neither did we expect it to be one. His obsession with studying the fashion industry is palpable throughout the book from buying Italian magazines to carrying brochures, studying them incessantly. He would also drop by at the National Institute of Design and the Bath and, um, their Dr. Dali Kohi, who was the director of NID and the Bath was also board member director of Pantaloons Retail Look, observe. When he goes to people of resource and repute, he tries to incorporate them into his business in one way or the other. By making him directors or investors or, um, rearing fan customers or partners or stakeholders, he has a way to get them into his zone. Um, here's what Dar Lee Kohi had to say.
69:01:
He would drop in at our institute from time to time to know more about fabric, about design, and about how to build brands. He would observe the most innocuous things and discuss his vision and dreams passionately. He himself came from a rather middle income business background, and he understood the income disparities in India. Now, once, um, they became a listed company, there were Pantaloon shops in about 22 different cities and places. More and more inbound demands started coming in.
69:29:
And here's how his criteria were to qualify them. Hear this out with brands like Pantaloons Bear, which is Bear Necessities and John Miller. We started John Miller, another brand that they got in. We started getting a lot of inquiries from across the country asking for the franchise for Pantaloon Shop. Choosing the right partners was always a tricky affair, more than financial muscle. It was important to understand the values of the person we were going to partner with.
69:57:
I remember having a two-step screening test. I would visit the store of prospective franchisees a little before they were scheduled to open. The first objective was to check whether the store opens on time. Now here's where customer's, God comes in, hear this out.
70:12:
Then immediately after the shutters were pulled up, I would walk into the store. The first thing most shopkeepers in India do is perform a puja inside the shop. I was interested to know with how much importance the shopkeeper treats his customers. I would typically go in when he was about to start the puja and see whether he attended to me first, or made me wait till the puja got over for a shopkeeper. The customer should be his dt and it was very imperative that he was given the first priority. If they pass these two tests, I would then initiate discussion.
70:49:
Whoa, his two criteria on the way to test it is fucking phenomenal. What a way to filter through people. Whew,
71:19:
And, and one of his, um, uh, associates says, people used to laugh at his back saying that he's being foolish in spending this kind of money, but his focus was on building the brand, whatever it took. In fact, he says in a bit, to establish ourselves as a fashion house, we must have got almost every leading model of the digital model for our brands or endorse them. The Am Meza, Soman, John Abraham and Sose, among others model for our brands much before they became famous. We spotted them early on and maybe our brands proved lucky for them.
71:56:
At its height, there were 72 Pantaloon shops spread across more than 40 cities, um, including small towns like Hubli, kadak, Lon, Ru three Chi Rum, EPPO, which and Andal. And in 1994, they had a turnout of Piece nine Crow. And they had an ambitious target of touching a hundred crow mark within five years. And this is something that they announced openly in their annual report. I mean, this just shows this sheer ambition this man has, and it's just going to get better and better.
72:28:
Tear me out. There was a lull in their growth because a lot of these, uh, franchisee shop owners were finding out loopholes and exploiting them to make more money and eat into the margins that Pantaloon was making. And that is why to run a successful franchise model. One requires watertight agreements, strict control mechanism than some tough rules and regulations. So we understood with some relief that our slow growth wasn't because our products were not selling, but because the model wasn't working for us, things as simple as giving free alteration was being back charged without giving the alteration. And a lot of these loopholes, these small shop owners were, uh, misused, he says, but I was convinced that the organization had to take a giant leap piecemeal efforts wouldn't work in such a situation that he was trying to get all the shops to align. Somewhere around this time, um, is when he came up with the idea of the mega store.
73:20:
So hear this out. Sometime in mid 1996, we took the decision to explore how and where we could set up large format retail stores, uh, because a lot of large format retail stores were coming in India, and they tried to partner with a few of them, but it did not go through. And that's why they wanted to set up their own large format retail store. Um, for want of a better name, we started referring to it as the mega store. Whenever I would visit a city, I would look around for an ideal location for situating it among the cities where our brands were doing well, very well, where Hyderabad, Cal Qta, Chennai and Akur.
73:50:
One of our oldest and best running pantaloon shop was at Hy Bath's model town in Punta, in Kta. In Chennai, we had invested heavily in building our brands and we were reaping good dividends. I used to visit K Qatar very often and had checked out every market and shopping district in the city, along with my friend Hir Ari. I must have visited hundreds of outlets. One day on our way back to the airport, he mentioned a10,000 square feet property. Coming up at Guha, I immediately asked for the car to be turned around to head towards the location. We reached there by 8:00 PM The doors were closed and we found that it was being converted into a marriage hall.
74:25:
I felt very strongly that this was just the kind of setting I had been looking for. It was situated on one of the broadest roads of the city and was right in the middle of a throbbing shopping district. It had a good facade and the customer didn't have to climb steps to enter the shop. Hear this out, a flight of stairs right at the entrance, I felt alienated a certain set of customers from the store. Maybe they find it intimidating or elitist and get the feeling that it is not my kind of store. Whew, what amazing observation.
74:55:
However, the rich marble flooring and the ornate wooden doors that had been designed for a marriage hall were not suitable for the kind of store I was planning. And here's what the owner of the marriage hall thought when he saw, when he met Kishore. He wasn't convinced, but when he met him and the conversation they had and how it went ahead is fascinating in itself. Um, his name was Shams Hanukah.
75:18:
Um, so Shams Hanukah is from Coal Kata, of course, and, and he's the landlord of the Pantaloons Outlet, uh, which you're talking about in Gar Kta. But he's also the owner of Al's store in the city. So he already has a textile store in the city. So he understands the business, he understands Pantaloon and how it is doing in the market.
75:38:
And here this out, we had purchased the property for setting up our own store, but due to some unfortunate circumstances in the family, we had to drop the idea. We were then planning to convert it into a marriage hall or rent it out to someone. It was at that point I was introduced to Mr. Biyani.
75:52:
At that time, pantaloon was a small brand and wasn't that well recognized. We were quite hesitant, but still initiated the dialogue. I then visited Mumbai with a draft agreement and met up with Mr. Biyani.
76:03:
During the discussion, I mentioned that we were planning to open a similar Raymond store in Cole Katas, Linsey Street, and had even met Raymond managing Raymond's managing director. He immediately asked why I preferred Raymond when I said that they enjoyed a lot of goodwill. He said, in five years, we will cross Raymond's turnover. I thought it was not possible, but I didn't argue with him.
76:24:
The discussion ended there, but I think he did manage to cross Raymond's textile turnover much before those five years. Somehow he had an in factious sense of ambition and a very positive attitude. I had written down some stiff terms and conditions, which maybe I'll get into in a bit, and you'll be like, whoa, these are really stiff conditions, all of which he willingly agreed to. Over the next couple of months, I waited for the store to open before giving him any feedback.
76:49:
And here here's some of the stiff, uh, conditions, which are, which are very unusual. Uh, this is what Kishoresays. He, however, agreed to give it to us on rent, albeit at a very high rate. It was also agreed that a certain percentage of our daily sales would go to his bank account just to make sure we didn't default on the rent. Whew.
77:06:
These were tough conditions. But what I got in bargain was a perfect spot to build my dream on. It was now in my own hands to script my success story. In fact, after the first day of opening up the store, there was so much cash
77:43:
And because of all of that, the crowd was crazy. And at the end of the first day, uh, our, and it was right around Durga Puja. So you can just imagine, um, at the end of the day, our store manager took the cash to a branch of the State Bank of India, located right next to the store. We had an account there, but the bank manager flatly, refused to accept the cash. He explained that it didn't have a person who would sit down and count so much money.
78:12:
Um,
78:53:
This being a public listed company. Had he opened the store in Mumbai or in popular areas like Delhi, uh, Bangalore, these would immediately be noticed. And if they would not work, they would, they would end up, uh, working against him. And that is why he says, uh, far away from the scrutiny of investors, competition and the media, we felt cold Qatar would be a good place to field test our new model. Not only did it allow us to experiment, but also give us the time to examine and correct our course if required. Ever since, for most new formats we launch, we bring them to Mumbai or Delhi only after they have been perfected in other city whom while he was building this fashion company, he was really insistent about making sure the designs were not something that's appropriate for page three, elitist, or he wanted it to represent like the local context.
79:43:
Um, rather than following trends set outside our country, fashion needs to flow from within our indigenous culture, customs and colors. And something that his perspective towards design, which is also gonna be a major part of this episode, is fascinating. And, uh, this is something early on that he's develops a sense sensibility of design. And one of the colleagues says to him, design was not just about products or aesthetics, but about touching the maximum number of people and making an emotional connect with them. Um, kb kept saying, look at our people, understand them and talk to them in their language.
80:19:
That's gonna be a constant maxim for him throughout his, uh, journey. Like the designer says, we knew the Versace, the Gucci style, but not Hindustan. Indian body, sizers skin color and lifestyles are significantly different from people in the West, for example. Uh, and this is a very interesting insight that will also come up in, uh, again, in a moment.
80:35:
And, uh, you're gonna see the impact of it. For instance, most designers do not consider the fact that most customers travel in trains and buses and not in air condition cars. So garments for Indian customers need to be designed, keeping specific Indian conditions in mind from the very beginning. And in this entire time in the entire retail space, probably he was the only one that was really betting on the future with Prakash Aria, who is the chief operating officer and member of the Board of Directors of Pantaloon Retail. But before he joined them in 2004, he served as the CEO of Globus, uh, for six years. And he, he points out something very fascinating that seemed to be the right way to approach this business at that stage.
81:14:
Remember the bicycling, uh, metaphor that he used, that he's bicycling uphill, and if he can doesn't constantly pate, it will slide down. Now retail requires a deep understanding of local tastes and preferences. As an indigenous retailer, we had a strong advantage over foreign retailers within India at this time. A lot of foreign retailers were flowing in. They had multiple joint ventures within India and with outside India, but they were not able to move fast enough. And the reason was this, within two years of launching, we had established a fairly Pan India presence with Pantaloons. By the end of 1999, there were 13 pantaloon outlets, including four in Hyah, two in Chennai, and one each in Kolkatta vi Nur, Bernet word, tan and Pune. These are the large format outlets. This is not, this is beyond the franchisees that we discussed. A while. Back on the day we opened the first Pantaloon store in Colta, our share price was6.2 rupees.
66 Kishore Biyani Part 2
0:00:
Let us assume that someone had invested through piece thousand in buying our stock on that day and had held onto those shares exactly nine years later. In 2006, the peace thousand investment would've been worth rupe to lack62,000. The investors have now given a thumbs up to our company's capabilities and plans, but in 1997, there wasn't a single investor who believed that this was profitable. Now, I did a back calculation. It turns out they had a CHR of 35% over the nine year period that he's referring to right now. But understand something, when he listed the company in about 1991 till 1999, it was just, or 1996, it was not moving much. So there is a way to frame this that makes it look really whoa, cool.
0:49:
But then there is also the overall broad picture. And the reason it did not move was because, um, they had to do lot of educating to investors on modern retail and how it has grown worldwide. Um, they were only among the two retailers that were listed on the stock exchange back then, uh, Indian Stock Exchange back then. In fact, a lot of foreign investors, in fact, a lot of foreign investors who had first handedly witnessed the retail boom back in America or uk, uh, or other parts of the world took notice of Big Bazaar earlier than Indian investors did, and a lot of them ended up backing him up. KB also understand, understands this. He says it is basic human nature that when someone homegrown is onto something, his own people are the last to recognize him. And that is why it is so important to have a wife or a younger brother or family members or friends who have and in and yourself, um, to have faith in. You.
1:40:
Always have faith in yourself and your plan because it is gonna take the longest for the people around you to take notice and recognize you. Here's Rish Ginger in the picture that I got really excited about because I respected Rakish Valla very differently after reading his perspective about Kishore and it just shows how differently ish Valla looks at businesses. Um, here, this anti excerpt out, which are about three paragraphs long, but whoa, this is deep. This is Rish Valla speaking.
2:08:
The markets anxiety emerged from a lack of appreciation of retailing as a business and of Kishore as a person. Now, Kishore as a person was not as popular. It was mis popular back then for a long time. Uh, you can understand why he was considered over ambitious, but they all missed the big picture as well as the bus. Kishore was aggressive in a field that was supposed to see a lot of growth in India. The stock market was concerned about the high debt equity ratio, but I found that it wasn't the debt that was high, it was just the equity base which was low.
2:39:
So we held him raise funds through private placements. I backed KishoreShort because he was very different from most entrepreneurs. First of all, he was very aggressive, and secondly, he wasn't money minded for him. Achievement meant doing what he thought, innovative, he understood customers well, and there was a lot of clarity in his thinking.
2:57:
I found this quality to be a key differentiator. He didn't drive himself by what revenues he was going to earn, but by what percentage of the customer's wallet he was going to attract. Instead of thinking of the profits he could make, he used to wonder about the number of footfalls he could aspire for. He was someone who always had his eyes on the big picture and willing to play the game for the long term. This is such a crystal clear and on point analysis of Kishore Biyani and he, and he was one of the early backers of, uh, Kishore Biyani. Another investor was I-C-I-C-I, and one of their, um, key decision makers add another perspective, um, where what most people missed out was that the company has never defaulted on a single loan to date. Every banker was willing to lend him, and that speaks a lot about the business.
3:46:
It needs to be traced back to the person. And his credibility for Urba growth was important. If he had waited for the cash flow to become substantial enough to fund the growth, he would have lost the lead, if not the market. In retrospect, I believe that it was also the honesty with which he conducted himself that helped him win the trust of investors in the long run. While he shared his big plans for the future, he was also very open about his constraints in the risks that were involved. So honesty is really important comes across throughout. In this book.
4:18:
This is where you find individuals who believe in you and your brand, uh, way more than anybody else does, comes across sometimes how you end up finding the right people when you're on the path. Um, this is Shivan Monk Cake Ker. Uh, he's a visiting professor of finance at Mumbai's, Jamal Al Baja Institute of Management Studies, and he is also an individual investor in the company. I'll just read this bit.
4:42:
Uh, it's fascinating. Our journey with Pantaloon began inMay, 2002 at Bangalore's TA residency. We were meeting a friend from the financial community at the Business lounge. We were talking mostly about some of the BPOs I visited since he casually mentioned to us that there is something called a big bazaar that has opened up in the city, which was worth checking out.
5:01:
Later in the evening, we set out to take a look at this new concept called Big Bazaar. When we entered the ground floor, it took barely three minutes for us to decide that this is the retailing model we had to own. The reason was simply the environment which greeted us an environment of chaos where people were literally freaking out in our quest for the right retail company to invest in. We had visited several stores, but they were all focused only on lifestyle retailing. India needed a value retailing model to revolutionize the Indian retail scene. Big Bazaar fitted the builtin.
5:32:
Here we found a customer who had driven in on Mercedes shopped as exactly as folks who had come on foot, and the store was packed. On a weekly evening later, our local friends told us stories about downing of shutters on weekends at Big Bazaar to avoid overcrowding, just to confirm that what we saw wasn't sheer coincidence. We made two more visits to the store and each time it was the same situation with respect to the crowds. After our third visit, we rushed back to our hotel room, called our broker, and asked him to buy 4% of the equity capital of Pantaloon. Over the next few days, we didn't do any of the typical things expected from finance professors.
6:08:
Brilliant salute that is analyze the balance sheet or meet the management. The simple reason for this was that the Big Bazaar outlet spoke much more. It screamed out that here was a guy who really understood retailing the Indian way. And in fact, when they both, uh, the father and Sandio met kb, it's fascinating how they reinforced his belief.
6:30:
Um, and I wanna read this one more paragraph for you. I returning back to Bombay. When we met KB in our first meeting itself, we told him that we had a 13 year investment horizon on Pantaloon. By which time we believed that Pantaloon would have one lack road market capitalization. KB laughed it off since on that day, pantaloons market cap was badly Ru Crow. But today, four years, hence, Kishore says anything is possible.
6:53:
We always tell him that we believed more in him than he did in himself.
7:17:
This is insane. Um, nearly 400 kilometers southeast of Mumbai in Western Ashra is the quaint little township of slee surrounded by sugar cane fields. The town is a trading center for turmeric, oil, seeds, sugar cane, and grapes. The town derives its name from Sali or Six Lanes in Marati.
7:35:
Some of its residents are farmers who own large tracts of land in the surrounding. Mohan Jadav is one such sugar cane farmer who lives in Alva, another 40 kilometers from Sali, 55 years old. Jadav lives in a joint family that has 1 27 members. He also happens to be our biggest customer till date.
7:55:
Hear this out. On a sunny Tuesday morning inMarch, 2006, he drove down to sang in his Bajaj Tracks pickup van, along with his wife, Sister-in-Law and nephews. The six of them visited our big buzz outlet in the town and indulged in some frenzied shopping activity, buying grocery utensils, shirts, doti, saris shoes, toys, and much more at the cash counter. His bill turned out to be 14 feet long
8:58:
One may find this strange today, but when the first shopping mall of Mumbai Crossroads opened, it only allowed visitors who had a credit card or a mobile phone such where the early days of modern retail in India from there to coming to this is unbelievable. Another very keen observation in Big Bazaar was, uh, the stairs was one that really blew me away. But another thing that made me go salute to his observation abilities was this. Here's what one of his early team members at Big Bazaar, um, told who was managing categories.
9:29:
Um, when we were designing the uniform for the staff, a lot of people said they should look smart and wear ties, white shirts, et cetera. Kizi was completely against it and said that the salesman should never look smarter than his customer. If the customer is grade five on the social ladder, let the salesman look grade four. The customer shouldn't get intimidated by the sales, but be comfortable while interacting with him. That was amazing. It was a clear and precise idea and it said a lot. And I don't think Khashoggi has, has himself ever worn a tie to work.
10:03:
Again, classic bu khar mindset on steroids.
11:21:
These are as popular as a special ladu and the miser parks on offer located somewhat close to the railway terminus. One can see holds of people getting in and coming out with shopping bags at any time of the day and any time of the year. It has around 120 people just to manage crowds, but one doesn't get the best customer experience in the store to many. Ana may be a shopper's nightmare, but there are a lot of customers who just love it and approve of it with their frequent foot walls. I would estimate that the single shop must be doing more than 200 kt of business each year.
11:58:
Woo-hoo. And this is early September two thousands people, and now begins his obsession with Sana stores for the next few months, first alone, and then with a small team. We dissected every aspect of Sana to develop our own hypermarket model. Serana disproved many of the accepted norms of modern retail. Unlike the hypermarket seen abroad, Serana showed that a store could operate on multiple floors. Also, it proved my belief that hypermarkets in India have to be situated within the city rather than in the suburbs as it is in abroad. It also has to be near a transportation hub because most Indians don't own cars.
12:37:
Next bag should be sealed at checkout so that people can enter and exit multiple times. Ana also confirmed much against the belief of many skeptics that utensils, jewelry, and fashion garments could be sold under the same roof at and I became apparent that Indians love to shop with their entire families. So the stores must cater to children and senior citizens as much as young couples, and of course, that Indians come dressed up for shopping as if it's a social location for them. Here's what an early employee who joined and was quickly moved to the big ba bizarre model tells about his experience.
13:12:
Um, Sana gave the kick the passion and the understanding of what Indian retail is. We saw people shopping like mad people being hurried like sheep, and then we saw them exiting with huge shopping bags. This was the real public of India, and it proved the capability and capacity of the Indian consumer. We studied everything at Sarna.
13:34:
We would carry a pencil in a notebook and room inside the store. We studied their product mix, their price points, their merchants, and their initial merchandise matrix for Big Bazaar was a replica of that at Sana. I don't understand how Sana stores allowed them to do this, but fascinating. Yeah, people may say that we are inspired by the Walmarts of the world, which is what I thought going into the book, but it was at Sana that Big Bazaar was born. Everyone who joined the company during those days had to visit Chennai, seek homage at Sana, and then start working. Woo-hoo
14:19:
However, I have to also mention that they decided to do differently. We wanted to build a model that we could scale up and replicate fast. The margin structure and the organizational setup at Ana didn't allow it to open new stores nationally. It was essentially a family driven business and was being run much in the same year. Neighborhood Shop is. We also wanted customers to have a better shopping experience at Big Baar. And once they locked in and understood the Sara model, they went on a award footing.
14:46:
Hear this out, the first three Big Bazaar stores were launched within 22 days. It was also a showpiece of our speed and imagination at work. And there are details here that I wanna highlight. There's like a comparison between Hypermarkets in the West and Hypermarkets in India that needs to be developed. There are insights here that I wanna point out because for Indian shopping is entertainment. They come with their entire families and move around in groups.
15:09:
In such cases, aisles can be boring as a restrict space and can't be dramatized at Big Bazaar. We created multiple clusters or mini bazaars within every story. It was designed as an agglomeration of bazaars with different sections selling different categories. The U-shaped sections and islands proved to be more appropriate for the Indian context than long aisles from early on. We incorporated factors like these that we thought helpful for our customers into our store design because in the west or west hyper markets, most people shop alone in India, families go out for shopping and it's like a, it's like an event in itself. They dress up, they get together, all the generations kids, the grandkids, the grandparents, um, get together.
15:53:
So it had to be accommodated. And again, the first store, as luck would have it, would open in K Kata. Um, on at VIP Road in Cole Kata. So they opened three big bazaar stores, uh, VIP Road in Kolkatta. The first one, Abbots, Inaba and MLA in Bangalore. And all of these locations were very different from each other.
16:14:
And this is where I tell you about the white shirt. So the head of Big Bazaar, Raja Malhotra, she anecdote really my eyes to how differently KB Pinks and operates. Um, so because all these three stores were launched with a lot of galata in the, uh, respective cities, it brought in a lot of PR for them and hos of people. And so while hos of people and Footfalls came through the door, he wanted to ensure that when this demand was there, the supply should not fall short. So at one store, uh, here's what this one happened. The white shirt seemed to be a great idea and we ordered it in huge numbers, but we realized that this item, which we were so confident of wasn't selling at all. The reason slowly became clear.
16:58:
The customer who walks into big bazaar travels by trains and buses. Even when the price of a white shirt is low, the maintenance cost of these shirts is too high for him. As a result, he doesn't get interested in this item. People who wear white shirts can afford them for 4 99 or above and do not buy them at a hypermarket. So there was a complete mismatch between the product we were offering in the big bizarre customer.
17:22:
In fact, by the time the first review came in, the, uh, Rajan was completely confused on how to explain this. He tried everything, advertising, promotion, discounts, and it just wasn't selling. So that is when during the review, KB asked what he had done and he explained, um, how he had bought the shirt at 105 rupees and was now selling it for 1 29 Rupees. I told him about all the other things. I'm reading this now.
17:44:
I told him about all the other things we had tried and that none of them was yielding any result they had. I think about, yeah, they ordered one lack white shirts and offered it at 1 49 Rupees. So back to what he was saying, I explained that we had bought each shirt at the rate of 105 rupees and we're now selling it for one, for just 1 29 rupees. I told him about all the other things we had tried that none of them was yielding any result, he heard me out and then said, you are not trying hard enough.
18:10:
I was completely taken aback, but then he added, have you tried selling it at 49 Rupees? I know we will lose money, but we have made a mistake. Let's accept it and move on. That incident taught me quite a few things.
18:24:
Never fear making a mistake, but if you have made one, get out of it fast and never put bad money after good money, the white shirt became our hero. It symbolized the spirit of the organization. And here's the best part, it was also the day when all of us became entrepreneurs. We had been given the liberty to destroy capital, something that is the sole prerogative of the entrepreneur. Woo-hoo, the permission to destroy capital. Wow, what a line. I love it.
18:56:
And this again, highlights how he abdicates, um, decision making and then backs people up. Because there were so many stores, um, across these many formats across the country, Kishorebi Hanni had to develop something which is probably unique in Big Bazaar itself, uh, to understand and benefit from the diversity of Indian consumers. We therefore set up a diversity tracking cell that tracked local customs, festivals, habits and consumption patterns. We left it to the store manager to make a lot of decisions based on local taste and preferences and customize our offerings depending on what the customer in a particular region wanted. The chief reason why our hyper market model worked was that we decided to focus more on merchandise rather than on operations. And this was a lesson straight out of Sam Walton's book Made in America. Again, all of these books are listed in the show description. If you buy from them, you're helping, um, support me and the podcast.
19:56:
There's also a wishlist with all the books that he has listed out, including this book that you can buy at one click all paperbacks. Again, if you're buying it from there, you're supporting the podcast and me back to the quote, the book states, in retail, you are either operations driven, where your main thrust is towards reducing expenses and improving efficiency. All your merchandise driven, the ones that are truly merchandise driven can always work on improving operations, but the ones that are operations driven tend to level off and begin to deteriorate. To me, this was the biggest secret that Walton shared in his book.
20:29:
Now we come to the part where he is talking about branding and how he captures the imagination of the audience is says Suta or a a cha. Nowhere is it cheaper and better. Nothing captures the spirit of Big Bazaar better than this one liner. And this is what he wanted to be at the top of the consumer mind, um, in India because this was how he wanted Big Bazaar to be a brand that was really built on the foundation of simplicity and entrepreneurship. When he is talking about making it merchandise driven, what he did very interesting is that he completely laser focused himself and his entire team on the front end and the backend. He completely outsourced it to consolidators, to local businessmen because they understood the local taste. They had the network in place, and it also got the team at Big Bazaar to observe from close corridors and learn how these local businesses work and then take those insights and then later on develop the backend.
21:30:
Now he focused on front end because, uh, he firmly believed the retailer has to have the imagine of the customer and make her buy. I think Food Bazaar did that brilliantly. Um, food Bazaar was another model within Big Bazaar, which I'll get to in just a moment. Um, but before that, I'll tell you how it was structured. Food Bazaar deliberately kept the sourcing model very simple.
21:49:
It freed up management energy. As many external businessmen shared the burden of procuring, storing and transporting the goods, it became a platform for amalgamation and KB left a lot of value to be shared with these traders. He operated on a principle that it was not about slicing the current opportunity, but about growing it further. He was able to convince them that if collectively they were able to grow the opportunity of modern retail format provided there could actually be three winners, the customer, the vendor, and the company. And in the meantime that the category team was being built around Food Bazaar, which mostly included, uh, fresh fruits, vegetables, groceries. In the meantime, the category team was being built and they started picking up the specialized knowledge. Finally, the customer's going to come because of the brand Big Bazaar and Food Bazaar.
22:34:
Understanding what the customer wanted and adding it to the merchandise mix would obviously yield good results. And this became very fascinating because there were different stores that had like a live kitchen, a pickle bar, and some even had Chucky. I mean where
23:27:
He also has to ensure that the customers buy them by focusing on the customer. We kept our business model simple, agile and open to adaptation. I say we may be criticized for lack of systems and process, but local sourcing has helped us keep stocks on ourselves and cope with erratic and often unpredictable shifts in demand from customers. A centralized process may not necessarily work for a vast and diverse country like India. It isn't easy to forecast demand for each product or each store sitting in the head office or even the Zal offices. Our store managers enjoy a lot of freedom when it comes to deciding the merchandise and product mix at the store. Our hyper market model is based on the principle of building and strengthening the front end, creating demand through the front end and letting the supply follow again, focusing on the merchandise. When when we, when he was looking for marketing and advertising, he wanted to capture and trigger the imagination of the masses. And that led him to find people that actually taught in the local language and spoke local language versus the ones that were available in these ad agencies.
24:30:
And here's how he found the right person. Um, there are only a handful of professionals in advertising agencies who understand, speak and think in the language of the common people. Most marketing and advertising professionals are educated in convent schools in large metros. Um, listen to Western music, watch foreign movies and speak and think in English. If you're listening to this podcast, you probably fall in this.
24:50:
Um, so for us, uh, on the, on the other hand, I was sure that I wanted to communicate Big Bazaar with one liners in the local language. And this is where he came across somebody who is relatively unknown advertising professional, but who hardly appeared in any GLO glossy supplements and magazines, which were devoted to tracking the advertising industry. But he had to, has created a lot of successful campaigns in the local language. And here's where he came up with these really cool one-liners because he, um, and he says this so beautifully, um, the good thing about Gopi Kure is that he still things in Marati and Hindi and not in English.
25:28:
So for us, he used a popular Hindi phrase, Kaju and extended it to a long list of similar comparisons from Ru, uh, which means Hisa hil fish at the price of
26:03:
My personal favorite is Han Ba Kaju. So his obsession with Mars led him from retail to cricket. But in the early two thousands, cricket was becoming very expensive and cricket stars and the properties around them had become very expensive for KB to afford. So he went to the next avenue, which is even more bigger, which is Bollywood. So over a few years he produced two movies.
26:28:
One was Naja, the other is Ham Up. And his reasoning was very intriguing because I believe that the only communication medium that comes very close to capturing the imagination of every Indian is popular films, and Philips have always fascinated me, the characters, the drama, the sound effects and the stunts, the songs and the dance sequences all come together in a film to make a billion people in our country escape their reality for three hours. Yet in many ways, movies reflect what is going on in the popular consciousness in the best possible manner. So he wanted to utilize films as a vehicle to bring about, um, different parts of his brands into the minds of a billion people. And he tried it using two movies. Both of them did not perform well.
27:13:
However, he got two very interesting insights. One among them is this southern turn of fate happens only in the film world. Few people outside the film industry realize this, but films are probably the fastest moving consumer goods one can put in as much effort, as much passion, as much capital, and as many people into a film production. But how the film performs is decided on a single day, probably within a couple of hours. So looking at films as an FMCG, good is something that only KB can do.
27:43:
Another thing that entire process of making these two films being even included to in a few songs was that, uh, the movie taught me that the most important thing is to never get to attach to any idea project or concept. One has to dispassionately evaluate every business decision and realize that not all initiatives are going to be successful. It is important to accept failure and to distance oneself from an ideal project if it doesn't work. So it wasn't a complete failure, but the amount of effort put in time energy put into these two films was not worth the ROI that was expected. Um, however, they were still very successful in getting merchandisers around these movies to be sold in the stores and also to present different aspects of Big Bazaar pantaloons within the movies.
28:30:
So those are really interesting experiments. I really like this one statement that comes in this book again and again, which is really drilled into this episode as well. I based everything on one philosophy, rewrite rules, retain values, chase your dreams, but don't compromise on your belief system. So, so rewrite rules, retain values is like a maxim that KB has stuck to through and through. And I, I wanna double click on his values because they're unusual.
28:58:
So once all of this is growing and it's eventually gonna be the future group that we know today as, um, the core values have more or less remain the same. The core values being Indianness, which have discussed extensively leadership, um, respect and humility, introspection, openness, valuing and nurturing relationships, simplicity and positivity, adaptability and flow. I think we'll talk more about leadership and flow in a bit because he has very different perspectives with both of these, um, that are worth discussing. Even though we do not make movies anymore.
29:33:
Hindi films play a crucial role in our business. They help us understand trends and changing customer preferences, and that includes identifying which modern detail formats will be successful in which cities and which communities. It is fascinating because they wanna see what movies are successful in what communities, and then decide what kind of a format would be relevant for them, which is a very asymmetric inference, um, or a data point that doesn't seem relevant from the top, but makes sense for them. Here's Kishore's perspective about hiring because he really does business at the speed of thought.
30:05:
Once the entire group was growing, he had to get in senior management to reign different aspects and parts of the group to the next level. And he had a very strong and staunch perspectives against MBAs. And here's what he told. Um, Kishor knew he had to bring a qual, bring a quality senior management team, but was a bit hesitant about the kind of people he wanted. He would say, I don't want the fancy MBA types, they don't fit into our organization because they are too proud of the fact that.
30:33:
So boot pancake, bed, DJ per product,
31:11:
Um, so here's how it is. So Aman Singh, uh, was brought in and he was hired for the role of chief executive of the value fashion and furnishing division of Pantaloons retail. A lot of jargon, but um, here's how he was hired. Um, meeting KB for an interview can be an unnerving experience. I had been warned by the person who introduced us not to get worried. If he doesn't look into my eyes when he is speaking or if he doesn't seem to be paying much attention to me, believe me, had that person not want me, I would never ever have joined. Pantalone KB by nature is a restless person and it is easily evident from even during a meeting.
31:48:
He will look at his computer screen fidget with his mobile, take a few calls, and it can be troubling for someone not used to it. And if that is not enough, instead of asking me anything, this is during the interview. And even if that is not enough, instead of asking me anything, he wanted me to ask him questions. Yes, tell me.
32:05:
That's always his first sentence. When I inquired about my job profile, he said, we create jobs for particular people. We will create your job as per your profile. We find the people first and then find the job. We find the people first and then find the job who, what a different way to look at hiring. Um, here's another one.
32:26:
Uh, this is Sanjay Jo who was brought in, um, to head human resource for Patone retail. When I met him in his room, I expected him to ask me a set of questions. Instead he started off with saying, tell me what you want to know. And then he stopped. I found that very strange as that wasn't how an interview was supposed to happen yet.
32:44:
I asked him a couple of questions on business, his outlook, et cetera. Finally asked him why people in the company call him kgi. He asked me to explain what was wrong with kgi. I replied that nothing may be wrong, but just that I found it strange. He then asked me what I call my elders in my family.
32:59:
I said, well, we do add a G. So he said, yes, it is the Indian way of calling someone with respect. I argued saying that it sounds like say G, which is very valid. He said, yes it does, but you can call me anything else you want. I'm okay with that.
33:13:
I was surprised and asked him, isn't that carrying it too far? He disagreed on our meeting ended there. It was very unconvincing and it took a fair amount of time and a few more meetings to convince myself that it was worth joining this organization. Later on.
33:26:
He is of course a convert and um, here's what he share shares. For instance, we were having this discussion on what to offer as incentives to our store staff during the valley. I was throwing up usual solutions like giving them cash rewards or gifting them some bags, t-shirts, et cetera. But he had a completely different idea.
33:43:
He said, it's simple. What do we Indians like to do on the valley? Paint our house
34:11:
There's recognition, self-esteem, pride amongst family members and social recognition. It was a genuine way of earning the loyalty of our shop floor employees. And the idea was born out of the Indian way of doing things. Jumping off to real estate because that's also going to be a big aspect of um, any retail store. He had a very clear formula and an approach to negotiation with real estate and real estate developers, which is legendary in its own way.
34:36:
And I'll tell you that right now. But first, ideally real estate costs should be less than 5% of the total sales of a store. In order to provide maximum benefit to customers at the current rates, it can be as high as 15 to 20%. This was once other competitors started entering the market and then the demand for um, retail space just shot up. But Kerry was lucky because he had already started booking lots of spaces around the country, uh, much ahead of time. Real estate and retail retail locations and Bollywood was something I had um, hinted to earlier.
35:10:
And here's a classic example. For example, Bollywood and retail locations may seem to be completely unrelated on the surface, yet studying box office collections of different movies provides interesting clues on which format will be ideal for a particular town or location. Whether a movie like Gutter or di did better can give a retailer an idea of the demographic profile tastes and preferences and how open people are to change here. A very interesting, um, gap when he was booking real estate spaces across the country.
35:41:
The fact was that, um, in India, uh, let me, let me just read this out 'cause it's very easy to understand. Uh, retail is an entrepreneur led business. This is again, a perspective from somebody else, uh, from the real estate sector that worked with, uh, Kishore Retail is an entrepreneur led business, but in India, most retail companies are professionally run and often they are not able to take fast decisions. The professional CEO first goes to consultants or market research agencies to validate his choice and then goes to his owners for approval. Donors often do not know the ground reality and the professions and not empower to take decisions and, and do not take bold steps.
36:15:
Compare this with Avis, what Kishor does. Therefore, while most of the retailers were for instance, booking40,000 square feet at a particular locality or town, Kishore would go ahead and book one lax square feet in a moving real estate market. He's the one who therefore got the lowest prices and has been able to sign on more locations than anyone else by getting in early. He has a far lower real estate cost structure and commands a la much larger share of the retail real estate that is coming up. If this wasn't enough, here's what Atul Ru had to tell.
36:44:
Um, Atul Ru is is the director of Phoenix Mills Limited, the promoters of High Street Phoenix, uh, Mumbai, which is a mall. So I first met kgi when High Street Phoenix was being developed in 2001. By then I had come to expect that CEOs would come with a team of six to 10 people, including some consultant discussions. Typically started with them telling us what all was wrong with the property so that they could beat us down on the price. Kgi on the other hand, came in alone at nine 30 in the morning.
37:11:
This just gets more interesting. I took him to the site and within 10 minutes he said, I will take it. It was a refreshing change from what I was encountering with other retailers. He had a very positive outlook and there was an immediate wipe between us. In hindsight, it seems it didn't come over to see the property. Knowing him, he must have checked it before he had come over to understand whether a relationship could be built between us. I think a lot of kgi decisions are based on whether he thinks a relationship can be built. Wow, what an insight.
37:40:
Our commercial agreement was finalized in two and a half minutes on a commercial flight. He had invited me to check the second big bazaar that was coming up in Hyderabad. On our way back on the flight, I suggested a price and he said yes to it and the deal was done. I had made up my mind at what price I will do the transaction. I quoted that figure, I didn't quote a higher figure, and he knew it was a deal figure and it was over.
38:01:
Even today, most real estate developers don't quote an inflated figure. They know that Kgi isn't going to bargain. He is either going to say a yes or a no. I think many of the parameters that he put into that transaction became the benchmark for a lot of other deals as well.
38:15:
Kgi has often played the role of Ament. To me, he was quite insistent that High Street Phoenix should be developed as an inclusive environment where every citizen of Mumbai can come to relax, unwind, and celebrate. Along with her family, he insists that, that we do not charge for car parking, bring in both large and small retailers and he has asked us to not throw the stray dogs out of the compound. His ability to do collect deals are very interesting, where he really trusts them and then either says a yes or a no.
38:42:
There is no negotiation. Here's another instance of his negotiation and relationships, uh, building abilities when it comes to real estate. Um, here's a quote from Uch Puri, uh, who's the managing director of Trammell Crow Garage. It's a leading international property consultancy firm.
38:59:
The first time I met Kishor, he said that he does a real estate transaction only when a bell rings in his head. I had no idea what he meant by a bell has to ring. There'd be properties that we thought were good, but if the bell didn't ring, he would walk away within a couple of minutes. What made the bell ring? I haven't yet been able to decipher, but I did figure out over time that he's very sharp in identifying whether a property will be suitable for attracting customers.
39:21:
The famous Bell, however, has become a popular anecdote in our company. Um, here's a very quick instance that just shines. This one such early Belling instance was about the High Street Phoenix property in Mumbai. We were working on behalf of developers and I wasn't sure whether Kisho would like the property. It was a textile mill land that was being converted into a mall. There were hunt min all around it and lower peril in 2001 wasn't the most preferred location for any retailer. Kisho was planning to launch Big Bazaar in Mumbai and we had approached him with the hope that he would agree to be the first tenant at Phoenix.
39:53:
I felt that if at all he decided to take this property, it was quite obvious that he would choose the area facing the main road, which is very obvious inference. Kishor not only agreed to open the first big Bazaar store over there, he even took a contrarian call on the location he chose within the compound. Something he saw made him opt for an area inside the mill over a more visible and road facing one. He looked at how a customer would come in, where the car park will be located, where she will get down, and which will be the first or after the car park. And his choice was proved right when the mall became operational.
40:26:
Thereafter, we realized that the way Kishore judges a property is very different from the rest. He doesn't go by what anyone else says. He applies his own vision. Kishore can crystal gaze and see what it will be three to five years, hence, and the benefit of his fast decision making had reverberated throughout the industry. Uh, wherein thanks to Kieu, our retailers are now forced to take fast decisions when it comes to choosing a particular property. Earlier, it used to take a long time for retailers to decide on a property, often a month or two, but Kishore mostly takes a call on a property on the first visit itself, therefore others are now forced to decide on properties within two or three days. That is a fascinating impact around the turn of the century with Pantaloons and Big Bazaar moving forward.
41:09:
There's a new concept that Kishore taught off, which was called a central mall. Um, our experience showed that a customer visiting a mall typically walks into four or five stores. That includes a large store and a few smaller brand showrooms. After that, fatigue sets in and he or she is unwilling to walk into any more stores at the mall.
41:27:
So we asked ourselves what would happen if we remove the walls between the different stores in a mall. In that case, a customer would be exposed to multiple brands at the same time without the necessity of walking in and out of different stores and along with shopping, we would also provide her with other entertainment options. Customers could then enjoy a seamless shopping. And this really renewed the conference, a lot of folks within the company, and it played a larger role in shaping the modern retail space within the country. And this was called the Central Mall.
41:56:
Why? Because they wanted to make it the central node or the entertainment place, um, whichever city they went into. They wanted it to be like the hotspot or the hub where families went to for entertainment. They wanted to create a, it was called a destination mall to attract customers from all nooks and corners of the city.
42:14:
And as they were leading the entire retail space in India, they took it upon themselves, um, to proactively build this kind of a destination mall. It was called Central Mall. So the first Central Mall was started here in Bangalore. It was a destination mall because the landmark was MG Road. Uh, it doesn't exist anymore, but it was started at MG Road, uh, where there was Ho Victoria. They took over that space and made it into a central mall. And there were a lot of features that established it as a focal point for the city, like the Central Square located outside the mall building has been made available for art, exhibition, cultural performances, shows and product launches.
42:52:
And 2005, there was like a vintage car rally that start from this place. And it also had India's first in-House radio station called Radio Central. And it captured all the glory that they wanted, um, in a single destination. And the tagline was, shop, eat and celebrate.
43:09:
Um, I really like this. Um, it's a fascinating thing that they were able to evolve to and after the Bangalore Central came, the Hyderabad Central, and then it just kept growing from there. Apart from our established romance like Big Bazaar Pantaloons, the Food Bazaar and Central, which I've discussed with you, we have created two dozen formats that capture every need and aspiration of consumers. We now operate across 10 lines of business, food, fashion and footwear, home solutions and consumer electronics, books and music, health wellness and beauty, general merchandise communication products, eTailing, leisure and entertainment and financial products. In most of these businesses, we operate at least two distinct formats. One for the value segment and the other for the lifestyle segment. The vision for us is to deliver everything everywhere to every Indian customer in the most profitable manner. Just reading that makes me feel so overwhelming.
44:04:
But then understand something, um, uh, they've been developed keeping in mind the hardware and semi-urban customers. Remember India one and India too. But there is still a huge population, which is the rural India that is about 55% of the total private consumption, and there's no retailer who's been able to tap into that. So there are multiple ideas in this book about how they went ahead, uh, how they wanted to go ahead and tap into that population as well. But I wanna circle back and focus on a constant question, which is how can we get an even larger share of the customer's wallet? The key to success in retailing is in getting customers to come back to your store again and again with Pantaleon. You made a small beginning, then came big, bizarre Food.
44:46:
Bazaar and Central, followed by many other formats that cater to almost every requirement of our customers. Yet the question needed to be asked once again, how to induce more consumption. They observed every single gap and tried to create a vertical or a business that could serve the customer and that led to multiple other businesses being launched. Um, so what he tells something about brand that, uh, makes a lot of sense to me.
45:15:
Um, brands are a product of imagination. A brand is an idea, and if translated properly, it can fire a customer's imagination. I love that a brand is an idea and if translated properly, it can fire a customer's imagination. Therefore, each brand needs to be developed on a fresh canvas. The Indian market is grossly under branded and there is a lot of opportunity to conceive and create new brands that cater to the Indian aspirations.
45:41:
Looking at all of these formats, these multiple brands, really led me to ask a question to myself, Hey, what is the core competency of Kii? Is he spreading himself too thin? Is it too many things for him to handle and juggle? And that is where this entire chapter on core competency was here, but I I didn't understand it fully yet. I haven't grasped it completely, but I wanna read it out for you. Um, hopefully you'll grasp it better and let me know and explain to me better. Uh, I'm often asked, what is our core competency?
46:11:
Some companies make only cars, some make only steering wheels and some make only ball bearings and most of them do a good job out of it. But how does a retailer sell insurance? Run restaurants manage private equity funds and charge brands for airing their advertisements on LCD screens within his store? All of these are done by our future group.
46:29:
The notion of an organization having a core competency in manufacturing a particular product is a legacy of the last century. It must have fitted in. Well at the time. Henry Ford spoke about model ty, which
46:47:
It is a different world today where ideas and imagination drive organizations to success. The Indian economy today provides numerous opportunities to, in almost every business, the notion of core competency therefore can no longer be defined in terms of a single product or service. It has to be defined in terms of knowledge, ideas, and intangible assets. Who, that's a very interesting D marker.
47:10:
So here, here's how, where he answers it. Our core competency lies in understanding and delivering to Indian consumers. We won't make steel, neither will we build cars or set up large petrochemical complexes, but wherever there is a direct customer interface, we will try to capture some value in some form. Over the years, we have gained significant insights about the mind of the Indian consumer, a deep understanding of their emotions, needs and aspirations, and how we can connect with each one of them.
47:37:
With this strong knowledge base, we think we are in the best position to capitalize the incredible consumption opportunities. So his insights into Indian consumer is his core competency, is what I understand. So far, the bedrock of all the businesses built by KishoreBiyani is built on relationships and this is what he thinks about it. I think the emphasis on building and nurturing relationships is a very Indian way of doing business. Unlike in the West, our society is based on values like humility and sharing. We are good at building relationships. It is something that comes naturally to us. And this is where an puri comes in again.
48:13:
Uh, who's the consultant with all his real estate deals. He says he doesn't like getting into a protracted negotiation. Instead, he wants to build a long-term relationship. Even if the person quotes a slightly higher figure, he accepts it much to the surprise of others, including his own employees. Once when I questioned his magnanimity, he explained, if I'm going to develop short-term relationships, most of my time will be spent on meeting new people and starting afresh with them. Of course, if the price is unreasonable, he immediately walks off without getting into any discussion.
48:45:
But this belief in building relationships has given him an edge. In most real estate deals, the market quotes can show a different price than what it quotes to other retailers. In this case, developers quote a realistic price because they know if they quote an absurd figure, he will not get into a negotiation at all. At the same time, since he is not someone who brings down the price to the last ruby, he is often the first retailer at developer approaches within new property. That is fascinating edge to have By not being
49:19:
While we are at relationships, those who work with him have a nuanced perspective because they're much more closer to him. And this is the other side of relationships. Once you end up growing, this is again by another colleague of his that shares. Uh, the best part about working with kgi is that he can recognize a good idea and he will get it done.
49:38:
The moment you show it to him, there will be absolutely no waste of time. He can be really rude and completely rubbish an idea, or he can come up with something like, this is the best design idea in the world. He speaks in these superlatives and once he gets excited about something, he's completely taken up by it. It is a childlike quality and his impatience and restlessness ensures that things move.
49:59:
Initially, I used to be taken aback by strong responses. Over time, I realized that with so much work, he didn't really have the time to indulge someone. He isn't a person who gets into any kind of sweet talk. He is frank and upfront with his opinions and has his own way of winning people over. Now we get into the Pantaloon way where he really evolves into respecting design and builds design into every single aspect of the organization.
50:26:
And, and here is how he defines design. Design is a user-focused, prototype based development tool that can make our organization adapt to the fast changing external environment. Building a design-led organization requires creativity, a deep understanding and empathy of human behavior. It also requires the skills to synthesize different and often conflicting trends and ideas. Now, the reason why he took up two design thinking and a design led organization is because of, so it suits Kishore and his way of approaching business and building businesses because it's not structured with policies, procedures, and planning to the last detail like his other contemporaries approach to business.
51:10:
But it's much more fluid, has the discipline and still gives you the freedom to institutionalize. Creativity and design is a lot about prototyping and that has pretty much been the default route that Kishorehas taken With all these formats, uh, he is more on prototyping by him. Prototyping has played an extremely crucial role in everything we have. Attempted most outsiders admire or dislike us.
51:32:
For one basic thing, the frequency with which we launched new businesses or develop new formats. Few realize that behind these risks were two simple rules that we followed. One was to always have a backup plan ready. Most of the time we did not know whether an initiative would succeed, but if things went wrong, we knew we could cut our losses fast and move on the backup plan. The other rule was prototyping.
51:55:
Every initiative, every concept or format we launched always went to the prototype phase. We built it on a small scale and opened it to a customer interface. We then watched and learned from how customers reacted to it before we scaled it up. Any initiative at the organization, however big or small, it must follow these two rules.
52:13:
Again, protecting the downside and failing as little as possible. And the second is to prototype. Design thinking is inherently a prototyping process. Once a promising idea has been spotted, one can build on it with drawings, models, stories, or even a film that would describe a product system or service.
52:29:
The aim during this phase is to elicit feedback before it is taken outside the organization and exposed to a small set of customers. These models are not expected to be perfect. Instead they need to go through constant adjustment and improvements based on suggestions and feedback. When one rapidly prototypes in this way, one actually begins to build the strategy.
52:48:
This process then allows an organization to unlock one of its most valuable assets, people's intuition. So essentially design is about creation and destruction. A good designer constantly in a way creates and then destroys to create something even better. Once again, design led organization thinking has really brought together all of his approaches in a way that makes sense to the larger audience. And I really like the prototyping idea 'cause it's reflected once he starts the first big bazaar store away from the market, away from the competitors and experiments, defines prototypes and then scales it up everywhere. Does the same with ca, central Mall and all the other formats. It really talks about how he's able to cap the downside and also prototype in the smallest and the best way possible, get the feedback, tweak things, and then move forward.
53:40:
This is like the classic MVP before MVP became a thing. He later builds an entire organization by merging two design firms that they have worked with constantly in parallel and creates something called as idiom in Bangalore, which is very fascinating. I don't wanna get into the details of it, but it is fascinating to make one organization, which is the entire future group with all the formats being the trigger point for ideas, concepts, prototypes, and then creating another organization, backing them up, supporting them, giving, being their anchor client and then giving them these ideas so they independently incubate them, look at it from objective wise, test it out, refine it, and then bringing it back into the bigger organization, the mothership, and then scaling it. I find that idea fascinating and I think um, he really has a way to get the best people to dream big, especially in India sometimes by making them envious, sometimes by bringing in, by poking their ego or sometimes just showing them a bigger vision. Whatever it takes, he has a way and a knack to get people together and to get them working. And today EDM is doing really well.
54:43:
It's one of the largest design firms in the country. Another concept that, um, KB is really institutionalized a scenario planning, which is also part of design thinking. So scenario planning builds upon the original entrepreneurial power of creative foresight. We build on hypothetical market scenarios and create our plans of action. We look at how the external environment may change, what disruptive technologies may emerge, how customers are going to evolve, what can be the changes in policy and regulations and what kind of competition will develop. Having identified these, we look at how we can react or influence each or any of the factors.
55:19:
The next step is to design our strategy in a way that helps us create positive future scenarios. This is a classic way to anticipate what's going to come next and then to jump first be the pioneer there. In simple terms, it is just having a nose for opportunities. The other tools like storytelling that also is delved into in this book and utilizing other fictional stories or made up stories to really communicate specific aspects of a policy or a procedure throughout the organization.
55:50:
Here are the values that I want to read. It's part of a two pager document at the group and it goes like this. It's all in the genes is something we often say when we describe a person. And if organizations are living breeding entities, then they too have their own genes. These genes are embedded in the organizational design. It's people, the human dynamics, it's incentives and the way people who work within the organization. Since individual behaviors determine an organization's success over time, we recently thought it was time to understand what our organizational genes are, how these have developed as reach where we are and how these will move us to a common objective.
56:27:
We spent a good amount of time introspecting about what makes our organization the way it is and we came up with the following the pantaloon genes. We like being simple and we like simplicity in our ideas. Simple ideas help us accomplish big tasks and overcome challenges. Speed is the sense of everything we do.
56:44:
We do plan and use numbers and data to make informed decisions, but we do not get into exaggerated planning or overanalyze things. We do not like to slow down or stop. We like to learn while we execute and to learn. We have to take risks. We may make mistakes in the process, but as we keep learning from our mistakes, we never repeat them. We like thrift, we don't like extravaganza, we don't like to flaw on fancy cars or gadgets.
57:09:
We want to lower costs for our customers and we do it by continuously bringing down our own cost of operation, planning in advance and tapping cost efficient resource. We believe that customers are always right. Customers are the reason we are in business and we learn the most from them. We actively watch them and try to understand their articulated as well as unarticulated needs and we like to offer them products and services even before they express their need.
57:35:
We like to think in terms of the majority of people. We do not like to be exclusivist in our approach towards customers. We also like to take into account the diversity in our country and design our customer interface according to local tastes and preferences. We take pride in our core values of Indianness. We believe India is emerging as a different country. It is, it is a different era and it needs ideas that are uniquely Indian. We believe India will show the world how great things can be achieved differently and we like to be the thought leaders in driving this change. We believe in ourselves, we believe in our organization's ability to think differently and, and there will achieve what many others think impossible. We like to foster a culture of innovation. We like to use both sides of the brain, the creative as well as the analytical side. We do not like to blame others or external factors.
58:23:
When faced with roadblocks, we like to introspect and find out whether the problem is with our organizational design, our human dynamics or our processes. Our efficiency depends on our persistent will to improve. We like to think positively in every situation. We like to believe that there is always a promise hidden behind each dure scenario. We want to take advantage of every situation.
58:47:
We believe that the future will always be brighter than today. We like building a nurturing relationships with everyone who comes in touch with us. We like to grow with our partners. We like to grow with the society and community we operate in. We love to rewrite rules even as we retain our values.
59:02:
He is, he's very particular about his personal life and I really admire that he uses the time of the value to retrospect as a business person every the value. I look around myself to find out whether every family member of mine is content and happy. Uh, I visualize each one's situation, put myself in their shoes and see if I would also have felt good in their place. To me it is also time for my own appraisal and in his own private daily routine. He keeps it really simple. I leave my home by nine in the morning and when I'm in Mumbai, I'm always back home before nine in the evening.
59:33:
Socializing and partying is not my cup of tea. And if you realize he also works on Sundays and he works when he travels as well. I have a highlight around that where his daughters are bitching about him
60:17:
Such presumptions can be extremely disturbing at times. Uh, he has this
60:44:
60:59:
I call this the time pass theory. I'm an entrepreneur, I work to build a business and organization, but what I'm essentially doing is trying to spend the time I have in this lifetime. Every morning when I'm busy getting ready to leave for work or some meeting, I'm doing it not because I have to do it, I'm doing it because I will not have much else to do through the day. We all get busy in our profession so that we can enjoy the time we spend at work and perform something that we think is productive. Some people choose teaching as a profession. Some people choose to be sailors, some choose to be professional writers. And through this work life of ours, we like to create our own world. We make our own definitions of success and failures of victories and defeats and we use these not only to judge our own selves, but also to judge others without ever realizing that what we all are doing is basically digging holes and filling them up.
61:47:
Yet I have seen so many people take their lives too seriously not realizing that what they are essentially doing in this world is time pass
62:34:
It's failure is part the course and that is why the small paragraph makes so much sense. Most people, however, are unable to acknowledge their oversights or mistakes. I feel it is crucial for an individual to be prepared to laugh at himself, recognizing that one has made a mistake even in a small way and learning from it. It is the first step towards success. Obsolete failure actually happens when one stops trying to do new things. It's about total lack of conviction in one's own ideas and aspirations and it's about giving up. And I don't think I will ever reach the state of absolute failure because I'm not a person who gives up at least not without waging award.
63:14:
Remember, he's come from the deserts, he won't give up easily. Now he talks about the mental mentors he has had uh, in the form of books. In the early chapters of the book I had discussed how it is not easy to find mentors or role models to pursue one's dreams. I did not have any real role models or mentors, but it was from reading books, magazines, and newspapers that I form my own mental role models learned about business and shaped my outlook towards life. In fact, most of the ideas expressed in this book are in many ways influenced by what I've read in all these years. This book will be incomplete if I did not also talk about some of the books that have influenced me. Now, before I tell you about the books that have influenced me, all these books that he has listed in the book are listed in the show description. So a good way to support me and the podcast is if you use the links in the show description to buy the books from Amazon.
64:01:
There's also a wishlist that has all the books and you can buy it at a single click that also helps support the podcast. So on retail, a book that has had the maximum impact on the way we do business is of course Sam Walton's Made in America. However, there are very few books on retail I haven't read, which means it's pretty much read every single book available on retail. And amongst his favorites is Harvard.
64:27:
She pour your heart into it how Starbucks built a company one cup at a time. There's also Arthur Blanks, how a couple of regular guys grew the Home Depot from nothing to $30 billion. There's also, um, leading by design the Ikea story. There's also Marvin TROs like no other store, the Bloomingdale's legend and Revolution in American marketing. While these are all western books, he also mentions Indian books, which I wanna read out for you one specific that really stands out for him.
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I've also read my fair share of autobiographies written by foreign and Indian entrepreneurs, but no book strikes me more than Perge Koreans autobiography. I too had a Dream. Korean story is of a genuine Indian folk hero. He proves that if one has the conviction ability to unleash the power of ordinary Indians, one can turn any dream into reality in terms of its sheer relevance in the current Indian context. The book easily stands out in comparison with what I have read on Indian businesses throughout the book. Korean reiterates that the biggest asset of India is its people and states. We have glorious examples in our country of what our people can achieve and have achieved by working together.
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Korean isn't shy of pointing out the disturbing truth. The truth of India is that we have no respect for Indians, for Indian efforts and for Indian successes. It is sad that all the issues that Korean faced, the opportunistic attitude of multinationals, lack of public leadership, bureaucratic bottlenecks continue to be the biggest challenges India faces. However, what this book proves is that even after 50 years since the Chira Cooperative Union was formed, the basic tenets of success pretty much remain the same trust in people belief in oneself and pride in one's country. I love that and I'm happy to share that the next episode in this 10 part series will be covering the book on Varghese Korean, which is I too had a dream.
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So stay tuned for that. A few more books mentioned are futurist writer Alvin Toffler Triology. Future Shock are the Third Wave and Power Shift. There's also Stephen Covey, the Seven Habits of Highly Effective People and there is the Alchemist by of course Paulo Kello, Richard Box, Jonathan Livingstone Siegel, which was actually used as a metaphor throughout the company to communicate a specific message. There's also Anthony Robbins awakened the giant within. They all are books that he has stuck to and all of them are listed in the short description.
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Now. This last few bits reiterates his perspectives of looking at entrepreneurs as Bra, Vishnu and Shiva or the creator, preserver and destroyer. Every organization needs a Brahma, a Vishnu, and a Shiva, a creator, a preserver and a destroyer. For an organization to grow and keep pace with the changing reality, it needs these tensions simultaneously.
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What happens with many organizations is that after they attain a certain size, the preservers take over and stagnation sets in. I consider myself to be a creator and destroyer first. I never really had much of the preserver instinct in me to begin with. Every three years we have destroyed our existing organizational design.
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Let me illustrate how we created new things out of this destruction. We started off as a garment manufacturer and subsequently launched a few brands. The business at that time was focused on the fashion segment and for a brief period we called ourselves Pantaloon Fashion House. The next step was to establish our own retail chain for our fashion products. And slowly thereafter, we built multiple retail businesses. Reaching out directly to consumers required a thorough understanding of different customer segments. For us, gathering this knowledge was the prime focus.
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It would prove to be the biggest weapon at our disposal In an environment where everything else was temporary and transient. Our quest for knowledge had to be methodical and systematic. So we formed the Pan Knowledge Group and created a knowledge office within the company to act as the key driver and assimilator of information. A vast repository of insights and understanding on retail and Indian consumers helped us understand both the articulated as well as unarticulated needs of customers, set new trends and exceed the expectations of our stakeholders. In 2006, we took the next big leap With almost a decade of retailing, we realized that the time was right for us to leverage the knowledge and create a company based on ideas and innovation. Our earlier organizational design was meant for running a sustainable retail business, but the emerging opportunities allowed us to look at the entire consumption space. Future Group was the outcome of the new thinking that has come into the organization. We have destroyed the earlier structure to create a new design that can serve as a platform for multiple ideas and businesses in the consumption space.
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That's the destroyer in me. The creator can be seen in the unique designing of the organization. The organization is now based on scenario planning, design thinking, innovation and ideas and new areas of research like mimetics. Neither do we look at the past, nor do we base our decisions on what has already happened. We look at the future and create a lot of scenarios for the future, how the organization can look like three years down the line, what are the challenges that can come up, et cetera. Then we develop an organizational strategy and try to create favorable business scenarios for the future. The intention is to fix a problem even before it appears and leverage an opportunity before anyone else. We move ahead and he talks about leadership and he has a very different perspective.
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Uh, again,
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It creates an army of preservers whose only aim is to preserve the status quo and follow predefined rules set by the leader to drive innovation and entrepreneurship. A leader needs to abdicate most decision making and executives role to his team. Only then can a leader move on to a higher level and achieve something bigger and better for the organization. This belief of allowing team members to take decisions has now cascaded to every level in our organization and that is one of the very important reasons why we have been able to get into so many businesses and managed to grow each one of them at a fast pace. Understand application is his way of giving power to others to destroy capital more than anything else. And because he's given them that amount of trust and power, they go all in. It's a beautiful summary from uh, one of his partners.
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He's a shy aggressor, a visionary operator, and a non-confrontational warrior. It is therefore understandable why at first his management style is very confusing. He has a timid handshake and will not look at you in the eye, but he will make extremely bold statements and aggressive decisions. He can take you to100,000 feet with his vision and perspective, yet get very focused on a tiny detail at the ground level. He only talks of growth and building something great yet will be sharply focused on the p and l and which is profit and loss and hates losing or wasting a single rupe. He'll be consistently critical and shoot down almost everything you say, yet you will find a lot of your thoughts being implemented when needed. He'll also emerge as your most ardent supporter to someone who comes from a more structured and consistent background, which is Goldman Sachs or Samir Wa before he joined Future Group.
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Kishor is a difficult man to understand. Yet all those who know him for a long time will agree that he has made a huge difference to them both personally and professionally. He teaches you to dream the impossible and then believe that you can achieve it. When you do, you get no credit or acknowledgement, but a reminder that he told you.
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So. His philosophy such as Go with the flow or his theory of time pass sounds strange and uncommercial. It is easy to poke holes at them, but he will live by these theories and time and again. They have proved to be precise and commercial for an awkwardly shy and private man. His understanding of people and their psychology is quite scary. Remember I told you about this earlier.
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I'll repeat it for an awkwardly shy and private man. His understanding of people and their psychology is quite scary. He's able to read people within seconds and adjust his interaction accordingly. Not in a manipulative way, but in a manner where he's able to go up or down to that level without compromising his character.
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At the end of the day, one has to look at the outcome. Kishore has managed to build a large organization that has a strong culture of creativity. He has recruited talent people at all levels, including the more senior positions. And somehow we may have a contradictory management style, but it is these contradictions that attract all sorts of people. And that is where I leave this episode.
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Uh, I highly recommend you buy the book, it happened in India and go through it and grow through it like I have done and before I leave. It really helps if you go down, if you're on Spotify or Apple Podcast, go down and give a five star review and let me know how you liked it. What was your number one take away from this episode. And also if you can please do buy the book from the link in the show description. It helps and supports me and the podcast. With that, go and make some galata!