E-commerce is here to stay but might change form, says Kishore Biyani

Future Group CEO Kishore Biyani says the e-commerce sector in India is going through a euphoria but will see a correction in the next six months. "We will see some negative stories in the next few months. The euphoria will continue until they continue getting funding," Biyani said at an event hosted by consulting firm Technopak Advisors. In another 18 months, the next big idea will take over, he said.

Reacting to a question posed by Arvind Singhal, Chairman, Technopak Advisors on whether optimism and hope have run much ahead of reality, Biyani said, "India is a very interesting country. We all get baffled by numbers while the real business is very different."

Biyani said that, in the next few months, the reality will come out when one will start looking at what one is actually getting out of the business. He said that the e-commerce industry is going through a cycle and a lot of hype has been created. "You have to create excitement, hype, create stories and then achieve valuations. Right now it's their time. Later, we will see the men separated from the boys."

Biyani said, however, that e-commerce is here to stay but might change form. "Haats, mandis, exhibitions, melas, all survive, but they have changed form. This medium (e-commerce) will also stay. It will evolve, it will be funded but no one knows how it will change. India as a market will surprise us in many, many ways," he said.

Biyani was bullish on some product categories continuing to do well online - mobile phones, watches, accessories, footwear, books and appliances.
On the Future Group's preparedness on the e-commerce front, Biyani said, "I believe we have to be ready for any type of shopping. We are thinking on an omni-channel strategy. We are re-modelling our stores to do deliveries from the stores itself. We have begun working on 17,000 pin codes to start with. Omni-channel retail will be much cheaper than pure online play. That is why it has worked worldwide."

Reacting to the discounting strategy followed by online retailers, Biyani said, "It is to be seen whether they will still be able to sell without giving discounts."