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E-commerce guys have money to experiment, I don’t: Kishore Biyani
18 Nov 2014

The head of Future Group Kishore Biyani admits he can't keep up with web sites like Snapdeal and Flipkart when it comes to spending money to entice shoppers to buy online, reports Reuters.

According to consulting firm Technopak, Private investors have poured $2.3 billion into e-commerce companies so far this year giving them financial firepower to overwhelm shoppers with bargains and deals that brick-and-mortar retailers like Future Group cannot match.

"It's all about money. The e-commerce guys have money to experiment - I don't have this kind of money to blow," Kishore Biyani, who pioneered modern retail in India and is chief executive of the Future Group, told Reuters in an interview.

Recently traditional retailers are seen forging partnerships with well-funded websites such as Flipkart.com, Amazon.com Inc and Snapdeal to put their wares on the web without investing heavily in their own online infrastructure.

This hesitant approach to e-commerce leaves traditional retailers vulnerable to being completely overtaken by their better-funded online rivals in a country.

In October, Future Group tied up with Amazon's Indian arm to sell its brands online. A month earlier, electronics retailer Croma, owned by the Tata Group, struck a similar arrangement with Snapdeal.

According to Technopak, organized retail in India is expected to grow to $182 billion in 2020 from the current $46 billion. E-tailing is forecast to expand at a faster clip, to $32 billion by 2020 from $2.3 billion now.

In 2012, Former Prime Minister Manmohan Singh's government opened India's retail industry to foreign operators, allowing companies such as Wal-Mart and Tesco Plc to own majority stakes in Indian chains for the first time.

But the government left it to individual states to decide whether to let in foreign retailers. Few have stepped up, and the big foreign chains that might have shared their online expertise with India's stores are largely absent.

Whereas, the online marketplaces have proliferated, last month's $627 million investment by Japan's SoftBank Corp in Snapdeal illustrated a widening gap. The portal has also attracted funds from eBay Inc and Indian billionaire Ratan Tata.

Earlier this year, Flipkart.com raised $1 billion in a round of funding from Singapore sovereign wealth fund GIC, along with existing investors Tiger Global Management LLC and South African media company Naspers Ltd.


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