Big Bazaar & Paytm Partner To Create A Mega Coalition Of Online-Offline Retail; Is This The Future Of Ecommerce?

Kishore Biyani led Future Group has joined forces with ecommerce behemoth & India’s largest mobile wallet company Paytm to create a mega coalition of offline-online retail: Big Bazaar.

This new coalition is all set to shake-up the retail industry in India, and force the ecommerce portals to looks at the industry from a different angle.

This decision of Future Group and Paytm can be described as a master stroke because instead of spending their individual crores to lure retail customers, they both would be focussing their energies to offer better, cheaper and faster deals to the same customers.

Kishore Biyani, Group CEO of Future Group said, “The unit economics of e-commerce has been the key bane for understanding the business, making a partnership the most viable format to take Big Bazaar online,”

Vijay Shekhar Sharma, founder and CEO of Paytm said, “Together (with Future Group), we see a fantastic opportunity to create a mobile first, omni-channel retail and payment solution for our wide consumer base,”

As per reports coming in, the partnership will begin with Big Bazaar’s annual shopping bonanza: Maha Bachat Sales, which usually happens around Independence Day. This year, Maha Bachat Sales would happen between August 13th to August 17th, and Future Group has targeted Rs 1000 crore sales, and Paytm will have a huge role to play in this estimation.

Big Bazaar would be made an ‘anchor store’ on Paytm, so that their customers can view and shop the products at ease. On the other hand, offline customers can choose Paytm to pay at Big Bazaar’s retail outlets all over the country. Besides Big Bazaar, customers can also pay using Paytm at FBB, Foodhall, Central, Brand Factory, Ezone and EasyDay which are part of Future Group.

Future Group Reinventing Their Online Ambitions?

This is not the first time that Future Group has decided to tie-up with ecommerce portals or launched a new scheme to use digital medium to sell their products.

Before merging with Bharti Retail last year, they had tied-up with Amazon India for creating a bigger platform of online-offline retail. Their Big Bazaar Direct, which was a franchise based direct selling platform also attempted to use Internet for making the process of shopping easy.

However, it seems that Future Group hasn’t been able to crack the code, yet.

Kishore Biyani said, while announcing their partnership with Paytm: “In the last two years, we have been serious in understanding this business and how to engage with it… one has to make this business happen. The cost of acquiring a customer (in e-commerce) is more than 20%, cost of fulfilment is more than 20%, cost of running the operation is 8-10% totalling almost 50% as cost of operation. At this cost, you can’t sell any goods in this medium,”

Before Flipkart snapped away Jabong in a quickly decided deal, Future Group along with Abof and Snapdeal were also in the race to acquire Jabong.

It would be really interesting to observe how this new partnership between Paytm and Future Group evolves, and change Indian ecommerce for ever.