'Kaam karne ki zaroorat hi nahin’: Kishore Biyani's masterclass on the size of Indian retail market

Veteran businessman and founder of Future Group, Kishore Biyani, believes that there is a big chunk of the Indian population that can feed itself without earning a living. He elaborates on this by using the example of a 'temple economy.' Biyani also spoke at length about India’s consumption behaviour and how it now needs to consume more. 

Biyani was speaking with Zerodha co-founder Nikhil Kamath in his podcast ‘WTF is with Nikhil Kamath’. In the episode on e-commerce, Biyani was joined by Udaan founder Sujeet Kumar and Meesho founder Vidit Aatrey. 

Kishore Biyani said, “Lot of people believe India is an infinite market because of 20 per cent of the world population. India is the most heterogeneous country you can find.”

He gave the example of a temple or religious economy to explain further. “Including small shrines and big, India must have some 50 lakh temples, and these temples feed people. 5 crore logo ko kaam karne ki zaroorat hi nahin – temple economy (5 crore people do not need to work). India mein aise microeconomics bohot hai jisme kaam karne ki zaroorat hi nahin (India has many such microeconomies where one does not have to work). And I believe 20-30 per cent of India in some sense lives on government aid. When you look at the market and start eliminating these things one by one, then you will see that the market is only this much.” 

Biyani said that he does not have much faith in reports from consulting companies that predict how the Indian market will grow. “Unfortunately the reports that consulting companies make – like ecommerce is being used by 18 crore people now, and 57 crore will use it by 2026, and then this many will use and market will increase by this many – I think this never happens,” said Biyani, adding that this cannot happen without commodity play or when value addition is not there. 

“My theory is that India is divided into three parts, according to levels of consumption – India 1, India 2 and India 3. India 1 is the consuming class, anybody who has domestic help is for me the consuming class. By consumption, I mean not simple consumption but some value-added consumption. India 2 is the serving class that makes our lives better, for example, the helpers, the peons, the watchmen. And for every one India 1 there is 3-3.5 India 2. And unfortunately India 1 does not give enough money to India 2 to help them consume discretionary products. Then there is India 3 that includes farm labourers, factory workers,” said Biyani.

He explained that right now value-added consumption in India is restricted only to India 1. Biyani estimates India 1 to be around 11-13 per cent, which is around 20 crore. “It might be growing and it is growing. The pace of growth will determine everything,” he stressed. 

Biyani also said that the equity investors also tend to move around in India 1 and end up having a different perception of the country. “Whatever you want to show, you can show, India is that kind of a country,” he said. 

The veteran businessman also said that consumption in the US and UK economies drove the global growth, which was then followed by the Chinese economy. “It is now India’s time. India will have to learn to consume much more than what it is consuming,” he said. 

Also WATCH | Parineeti Chopra-Raghav Chadha Engagement today: Swara Bhasker-Fahad Ahmad, Radhika Kumaraswamy-HD Kumaraswamy, know all about these actor-politician power couples

Also WATCH | Mother’s Day 2023: Flowers, Tech gadgets and other last-minute ideas to make your mother feel special

Also WATCH: Karnataka Election Result 2023: Twitter reactions hail Congress’ lead, blame BJP’s loss on Bajrang Dal row

Also WATCH: From Maggi Crisis to FMCG Dominance: Meet Nestle India Chairman Suresh Narayanan, The Master of Turning Things Around

Also WATCH: The CEO’s Toolkit: Tech Today’s Must-Have Gadgets For The Top Boss

Also Watch: India vs Pakistan ODI World Cup Match 2023: Check date, venue, and more

Also Watch: Dr Reddy's share price tanks 6% after Q4 results; what should investors do?

Also read: 'Bangalore mujhe nahin jana': Ex-Flipkart top executive Sujeet Kumar recollects Delhi life, early days' hustle

Also read: 'If somebody's a son, daughter of very rich man...': Zerodha's Nikhil Kamath reveals what makes him wary of investing in startups

Also Watch: From Rakesh Jhunjhunwala to Vijay Kedia: India's 5 most successful traders with earnings in crores, and their strategies