Tale of 2 Retail Kings - Amazon & Future Group

Jeff Bezos will be stepping down as CEO of Amazon Inc., having established the company 27 years ago, having revolutionized retail industry as we know it. Numbers are nothing less than mighty. Its sales last Quarter stood at $125 billion (approx. Rs. 9 lakh crores), Market Cap is at $1.6 trillion (approx. 60% of the market cap of ALL listed stocks in India put together) and the stock price has become 2,000x in 25 years (that’s 35% CAGR over 25 year period).

And to top it all up, the Company still runs like a startup not afraid to try new things. A good example is the AWS division led by Andy Jassy (who will take over the reins, after Bezos steps down). AWS is currently at $50 billion annualized revenue, while still growing at an impressive rates (since the business has extremely high customer stickiness due to the nature of the product).

Back home, Kishore Biyani was a pioneer in the retail space, having branded as the ‘Retail King’. But inspite of massive store expansions and sales growth, profits seemed to be elusive and the group is today staring at bankruptcy. Fortunately, Future Group had a partnership with Amazon, but Future Group, continuing with its short sighted policies, agreed to sell its assets to Reliance Retail. Amazon having challenged this deal, took Future Retail to Arbitration Tribunal and Court and got a stay on the Future Group – Reliance deal.

To put the final nail in the coffin, SEBI has recently barred Kishore Biyani from accessing the securities market for 1 year, as also, trading in Future Retail share for 2 years, which puts Reliance Retail in a limbo.

In Hindi, there is say that Dhobi ka kutta, na ghar ka na ghat ka, though we are not applying same here. One must have a vision and learn to accept a small portion of delicious and seen to be of growing big cake, instead of lured for small and ordinary cake. Future Group seen having killed Golden Egg laying Hen.