May 13, 2016
Kishore Biyani sceptical about online fashion retail
May 13, 2016
Future Group founder and CEO Kishore Biyani is disdainful towards the online fashion retailing business, and insists that he doesn’t find “model of spending so much money to acquire a customer”, appealing.
“The cost of doing business in online fashion retail is not profitable,” he said at the re-launch of the Future Group’s Central Store in Bengaluru on Thursday.
Furtue Group had to spend almost Rs 90 crore to make the 110,000 sq ft store more contemporary and upscale.
Biyani’s dislike for online fashion retail seems surprising given that fashion is the most profitable category for online retailers such as Flipkart, Myntra, Jabong and Amazon India.
But he stresses that he has the numbers to back his argument.
“In the online model, the minimum cost of acquiring a customer is 20 per cent of total sales, but for us, it 2-2.5 per cent of total sales. So, there is no comparison between the two models. At the moment, no, we won’t get into online fashion retail,” said Biyani.
He acknowledges the competition posed by online fashion retail companies. And the re-launch of Central is part of his strategy to take on online rivals. The store now houses designer brands such as Satya Paul and high-street fashion brands such as Tommy Hilfiger and Global Desi. It has also more than doubled the number of brands available in the store from 200 to 500.
“Competition is making us work harder. To compete with the new businesses, we need to make it all about the experience and seduction in order to make them spend more money,” Biyani said.
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