V-mart Retail to Con­tinue Grow­ing At 25 Pc CAGR; Eyes Ware­house Ex­pan­sion

V-mart caters to the fash­ion needs of the en­tire fam­ily. While ap­parel is the cen­ter­piece of the prod­uct port­fo­lio, the brand is also a pre­ferred on­estop des­ti­na­tion for footwear, home fur­nish­ings, toys, ac­ces­sories and gro­cery.

Images Retail - - CONTENTS - – By Charu Lamba

Value fash­ion and life­style prod­ucts re­tailer, V-mart Retail, started its retail jour­ney in 2003 with its maiden store in Law Gar­den, Ahmed­abad and since then there has been no look­ing back. To­day, the brand has 179 stores spread across 149 cities and 14 states.

In an in­ter­view with IM­AGES Retail, Lalit Agar­wal, Chair­man and Man­ag­ing Di­rec­tor, V-mart Retail says, “Re­flect­ing back, I would say that this jour­ney ac­tu­ally be­gan in my child­hood, when my fa­ther started a tai­lor­ing shop in Odisha. Retail is in my blood, and V-mart is first and fore­most, my passion and then a busi­ness.”

The brand is mostly present in Tier II and III cities, and is now ex­pand­ing to Tier IV as well, fol­low­ing a clus­ter-based ap­proach.

“All our new store launches have been get­ting very good re­sponse, thus un­der­scor­ing the growth po­ten­tial in our tar­get mar­kets. Typ­i­cally, our stores are planned in high-streets and high foot­fall lo­ca­tions and have an av­er­age size of 8,000 sq.ft. Stick­ing to our core busi­ness model, we don’t have any plans to ex­pand in Tier I and metro cities,” adds Agar­wal.

The USP of V-mart is a price-value equa­tion that puts cus­tomers first, and con­sis­tently de­liv­ers or ex­ceeds their ex­pec­ta­tions on both qual­ity and price.

Ac­cord­ing to Agar­wal, “We are a value fash­ion re­tailer; our cus­tomers are the young and aspi­ra­tional classes. Com­pared to other brands, we have main­tained an un­wa­ver­ing focus on our core tar­get au­di­ence, and they have pa­tron­ized us with un­matched loy­alty, in terms of re­peat buy­ing and word-of­mouth rec­om­men­da­tion.”

Prod­uct Port­fo­lio

The punch-line of the brand ‘Price “Less” Fash­ion’ em­pha­sizes on the value re­tail­ing seg­ment while fo­cus­ing on af­ford­abil­ity.

“Our prod­ucts are cho­sen after a rig­or­ous qual­ity con­trol and eval­u­a­tion process and are meant to ful­fill our

prom­ise of un­matched value at rea­son­able prices,” re­veals Agar­wal.

V-mart caters to the fash­ion needs of the en­tire fam­ily. While ap­parel is the cen­ter­piece of the prod­uct port­fo­lio, the brand is also a pre­ferred one-stop des­ti­na­tion for footwear, home fur­nish­ings, toys, ac­ces­sories and gro­cery.

“Our buy­ing and prod­uct plan­ning teams are con­stantly scan­ning the emerg­ing con­sumer trends and pref­er­ences, to en­sure a prod­uct mix that de­lights our tar­get au­di­ence,” adds Agar­wal.

The brand has in­vested sig­nif­i­cantly in im­prov­ing the prod­uct dis­play mak­ing it eas­ier for the cus­tomers to find rel­e­vant prod­uct eas­ily, made the store more vi­brant, in­tro­duced cus­tomer loy­alty pro­gram, pro­vided easy prod­uct ex­change fa­cil­i­ties and above all started com­mu­ni­cat­ing with the cus­tomer more of­ten.

Om­nichan­nel Jour­ney

“The cus­tomer is the rea­son we ex­ist, and it is our main aim and pri­or­ity to keep bet­ter­ing their ex­pe­ri­ences – in-store and out­side,” says Agar­wal. To­wards this, V-mart looks to en­sur­ing a seam­less ex­pe­ri­ence for its cus­tomers by in­te­grat­ing on­line and off­line ex­pe­ri­ences.

Ac­cord­ing to Agar­wal, “We see on­line as an op­por­tu­nity rather than as a threat and plan to lever­age our ge­o­graph­i­cal spread in ser­vic­ing cus­tomer needs us­ing on­line and in­store medi­ums. This is eas­ier said than done, as it in­volves sig­nif­i­cant im­prove­ments in prod­uct stan­dard­i­s­a­tion, cat­a­logu­ing, pack­ag­ing, lo­gis­tics and com­mu­ni­ca­tion – all cen­tered around tech­nol­ogy.”

“We are work­ing on a con­certed plan to de­liver a seam­less dig­i­tal ex­pe­ri­ence to our cus­tom­er­sand have ex­cit­ing in­no­va­tions to make this tran­si­tion as a com­pany,” he adds.

Sup­ply Chain & Lo­gis­tics

V-mart’s sup­ply chain is cen­trally man­aged. The brand has a cen­tral ware­house of

2.2 lakh sq. ft. in Bi­laspur, Haryana, from where all prod­ucts are dis­trib­uted through a mix of mar­ket place­ment and com­pa­ny­owned ve­hi­cles.

“We have a state-of-the-art Put-to-light (PTL) sys­tem at our cen­tral ware­house and man­age it through the best-in-class retail ware­house man­age­ment sys­tem

(WMS). In or­der to meet our fu­ture de­mands, we are also look­ing at set­ting up a se­cond ware­house which will be op­er­a­tional by the next fi­nan­cial year,”says Agar­wal.

Fur­ther, V-mart has in­vested sig­nif­i­cantly in strength­en­ing the sup­ply chain and lo­gis­tics net­work in the last cou­ple of years. Apart from au­tomat­ing the ware­house through the im­ple­men­ta­tion of a WMS, the brand has in­tro­duced many other tech­nol­ogy-aided tools to en­hance pro­duc­tiv­ity, re­duce shrink­age and en­able faster through­put.

“We are fur­ther eval­u­at­ing to ramp up the ware­hous­ing ca­pac­ity and have un­der­taken a deep study to asses our lo­gis­tics re­quire­ment for the fu­ture for which we need to ini­ti­ate in­vest­ments now,” adds Agar­wal.

Best Per­form­ing De­part­men­tal Store

In April 2018, a re­port quot­ing a Jef­fries bro­ker­age re­port, res­onated op­ti­mism about In­dia’s or­gan­ised retail mar­ket. It also in­di­cated that V-mart has been the best per­form­ing de­part­men­tal stores chain this year as its shares rose 10fold since it be­gan trad­ing in Fe­bru­ary 2013.

Ex­press­ing his hap­pi­ness, Agar­wal says, “We achieved this dis­tinc­tion, thanks to the faith our cus­tomers, in­vestors and em­ploy­ees have con­sis­tently placed in us. As a com­pany, and a brand, we be­lieve in fol­low­ing three ba­sic prin­ci­ples – pro­vid­ing last­ing value to our cus­tomers; earn­ing the trust and re­spect of our cus­tomers, in­vestors and em­ploy­ees; and, fo­cus­ing on fun­da­men­tals that drive the retail busi­ness. The rest, as they say, fol­lows. I am con­fi­dent that, as a com­pany, we will con­tinue to chart new and more ex­cit­ing mile­stones, and cre­ate even greater value for our cus­tomers, in­vestors and em­ploy­ees.”

Fu­ture Plans

As a part of on­go­ing ex­pan­sion drive, V-mart has iden­ti­fied new lo­ca­tions in ex­ist­ing clus­ters, as well as en­tirely new ter­ri­to­ries, ex­am­ple, the North East. The brand plans to in­vest ₹300 crore to dou­ble store count and tre­ble its turnover to ₹3,500 crore in the next five years

“We aim to grow at a healthy rate and will con­tinue to ex­pand us­ing in­ter­nal ac­cru­als,” says Agar­wal.

The brand has been grow­ing at a CAGR of 25 per­cent in the last 5 years and in­ter­nally tar­gets to main­tain a sim­i­lar growth rates for the fu­ture. In 2017-18, the com­pany had re­ported a rev­enue of over ₹1,200 crore.

“Our same-store sales has been grow­ing at a CAGR of 8 per­cent YOY. We are in­ter­nally tar­get­ing to achieve sim­i­lar num­bers in the fu­ture,” con­cludes Agar­wal.

WE SEE ON­LINE AS AN OP­POR­TU­NITY RATHER THAN AS A THREAT AND PLAN TO LEVER­AGE OUR GE­O­GRAPH­I­CAL SPREAD IN SER­VIC­ING CUS­TOMER NEEDS US­ING ON­LINE AND IN­STORE MEDI­UMS. – Lalit Agar­wal, Chair­man and Man­ag­ing Di­rec­tor, V-mart Retail

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