Why Big Bazaar Failed? The Rise and Fall of a Retail Giant

Hi There, Welcome to today’s post about “Why Big Bazaar Failed“. I am sure u must have visited Big Bazaar stores once in your lifetime. As per the current status, the company is in bankruptcy. The owner of the company & CEO of Big Bazaar (Future Group) Mr. Kishor biryani has tendered his resignation.

Why did Big Bazaar fail?

Since its launch in 2001, Mr. Biyani has started the first store in Kolkata India. When Mr. Biyani started the big bazaar people started comparing him with Sam Bolton of Walmart. By 2020 future retail which is the parent company of big bazaar has opened more than fifteen hundred stores all over India.

Reason of FailureDetails
CompetitionIncreased competition from other retail stores and e-commerce websites
Lack of InnovationFailure to keep up with changing market trends and customer preferences
Poor ManagementInefficient management practices and decision-making
Pricing StrategyIncorrect pricing strategies and failure to offer competitive prices
Lack of DifferentiationFailing to offer unique and differentiated products or services

The Begining & Growth Path of Big Bazaar

The whole story begins 30 years ago when Kishore Biyani went to his father’s clothing trust and started working. Five years later in 1997, Kishore Biyani started his first brand outlet in Kolkata name Pantaloons.

in 2001 Kishor BIyani opened the biggest departmental store in Kolkata named Big Bazaar and within a few years, the big bazaar had more than 100 outlets all over India. But how was he able to achieve this?

  1. The first reason that he understood the psychology of Indian customers was the customer would first see the product and if the customer liked it then he will buy it.
  2. The second reason for that discount well everyone liked discounts and big bazaars used to give enormous discounts and sales and that too so frequently that people used to rush into the stores.

The Discount Problem

After giving so much discount they were able to capture a mass customer base. These discounts were loved by every customer & they shopped in Big Bazaar store frequently. But the question is how were they able to give such heavy discounts?

On one side they were giving huge discounts & on another side a robust expansion plan of stores was ongoing. The main reason why big bazaar failed has the discount factory. As Mr. Biyani does not come from a rich family he has a lot of money. He will invest in business activities to grow the big bazaar and its other outlets.

Monopoly & Golden era of Big Bazaar

The growth of Big Bazaar stores was high during the golden period of 2003 to 20010 as there was no competition. They have launched various stores during this period. The stores were having no competition from the organized retailer, as hardly there was any big player in the market.

During this period they have launched various new format stores. FBB & Food Bazaar were part of this expansion plan.

The main reason behind Big Bazaar Failure

If we analyze the growth part & the discount schemes of the Big Bazaar, we came to find the main reason behind the failure.

  • Wrong Acquisition
  • Aggressive Store Launch
  • Competition from Online Players
  • The Covid Impact

Wrong Acquisition of stores

They have done several acquisitions of competitors which included; Easy Day, Hypercity, Neelgiri, and WH Smith. All these decisions have not given a positive impact on the business strategy. These new stores have become a liability which was the major reason for failure. As a lot of money was spent on the acquisition.

Store Launch

They have launched various stores without assessing the profitability of the business. Most of the stores were launched in the High street Mall or locations. The rental part of these stores was high as compared to the Standalone stores that D mart used to operate.

He used that in order to accomplish his plans but who knew that this will make the company go crashing down?

Raising Competiton from Ecommerece & Other Retailers

The market in India retailer business has seen tough competition from the early years of 2015 to 2017. New players entered the marketing & gave tough competition to the existing players. Dmart, Amazon, Flipkart, Jiomart, and Reliance Retail have given tough competition to the Big Bazaar stores.

During this time big bazaar failed to keep up with the competition & lost its market share to the newer players.

The final Impact of Covid

So Far Big Bazaar started an online e-commerce website before the covid started, but it was not enough. But they were not only late but they had massive debt of more than a thousand crore rupees because of which they were not able to sustain. Not only in online mode but also in the offline mode they were not doing good. Moreover, their sales plunged when in 2020 covid-19 hit the nation which served as the last nail in the grave of the big bazaar.

Hence in 2020, Reliance industries share an interest to buy future retail the parent company of a big bazaar for 24 700 rupees. The main reason for the failure of the big bazaar was dead if they had low debt in 2016 they could have easily started an online marketplace. Moreover, because big bazaar stores are already set up and were close to the residential areas they could have generated a fair amount of revenue.


Who replaces Big Bazaar?

Reliance Smart Bazaar stores are operated in the place where Big Bazaar was operational earlier.

Is there any Big Bazaar store open?

No, all the stores are closed as of now.

Conclusion; The main reason why big bazaar failed is tough competition from the other retailers. Although they were strong in pricing & customer loved to shopping with them. The rising competition from Jiomart, D mart, and E-commerce websites have left big bazaar with low market share.

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