Both online and physical retail have their own relevance in India: Rajan Mittal

Post the merger of Bharti Retail with Future group companies, the Mittal brothers will own 15 per cent stake in Kishore Biyani's retail business. It is going to be the second try for the Mittals after they broke their tie up with global giant Walmart in India. This time, Rajan Bharti Mittal, Vice Chairman, Bharti Enterprises says in an email interview with Business Today that Bharti group will play an active role in growing the business:

BT: What was the key driver for Bharti to align with Future in retail? Why did Bharti opt to merge with Future rather than growing organically or acquiring other retail companies itself?

Mittal: For Bharti, it was an opportunity to be part of a larger, national scale retail business and build a world-class retail chain out of India. There was a compelling case for the merger given the scale, cost and sourcing synergies that were on offer. In addition, geographically and in terms of formats, both businesses complemented each other well.

BT: What is the future of traditional organised retail in your view? Is it sustainable?

Mittal: Surely. We remain very bullish on organised retail in India. It is the reason that we chose to merge (with Future Retail) and not exit. We believe this merger gives both Future and Bharti an opportunity to build a world-class retail business.

BT: You had the strategic support of Walmart in the past years. How difficult was it running the business without them?

Mittal: Bharti Retail has successfully completed the transition from the Walmart partnership and put in place its own processes and systems. The business was operating strongly with majority of the stores being cash positive.  

BT: What would be Bharti's strategic contribution in the new JV? Will you be playing an active role or is this an investment only from here on?

Mittal: Bharti will have representation on the Board of the merged entity and we will play an active role in growing the business.  

BT: Where do you see the new venture standing amidst competition?

Mittal: We are well positioned to build a world-class retail venture out of India.

BT: Today, organised retailers seem to be at sea regarding their strategy vis-a-vis e-tailers despite trying and testing various business models over past 10-15 years. On the other hand, e-commerce is gaining in strength. Where do you think the retailers have failed to assess the market? What are the strengths of traditional retailers that can still be leveraged to counter e-tailers?

Mittal: Not at all. Both formats have their own relevance in India, which is a massive market. We remain bullish on the long-term prospects of organised retail in India.