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Ramping up distribution channel in India
PostPosted: Sat 22:29, 24 Aug 2013
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Ramping up distribution channel in India,[link widoczny dla zalogowanych]
Speaking on the company s plans going forward, he says Liberty Shoes is now focusing on the domestic market in a big way. Liberty Shoes is bullish about retail. It is now ramping up retail and distribution channel in India.
Here is a verbatim transcript of an exclusive interview with Adesh Gupta on CNBC-TV18,[link widoczny dla zalogowanych]. Also watch the accompanying video.
Q: We believe that you plan to open up your open retail stores,[link widoczny dla zalogowanych]. What kind of expansion plan do you have lined out and how much cost will it entail for you,[link widoczny dla zalogowanych]?
A: We are quite bullish about retail,[link widoczny dla zalogowanych]. We have two vehicles of growth for retail. One is Liberty Retail Revolutions Ltd where we have company owned managed stores which are presently around 65-70 number and going forward in the next financial year we are adding upto 100-120,[link widoczny dla zalogowanych]. Then we have almost 500 liberty exclusive retail stores which are franchise model based stores,[link widoczny dla zalogowanych]. We also plan to ramp them upto another level where we also look to renovate them as well as to expand the numbers going forward in the next year,[link widoczny dla zalogowanych].
Q: 50% of your revenues come from the export market though that has improved or are you looking to change this queue to become more domestic tilted,[link widoczny dla zalogowanych]?
A: The strategy for the time being is we are focusing primarily only on the domestic market in a bigger way because when the world is coming out of recession we see that the exports are softening but the domestic segment is growing rapidly as we look at it from our own perspective or industry segment. We are ramping up our distribution channel as well as our retail channel in a much bigger way going forward and we also plan to double up our distribution network in the country. We are mapping all those areas where we are under presented or we have not represented well or we have to charter into new areas within India and even going Tier II-III rural segment as well. So we believe that the population base for your growth going forward will give us much more dividend in domestic market. Besides that we also have an institutional segment which is B2B where we also selling industry safety footwear and light stuff to government as well as to the industry which is also growing parallel. But on the export side as we see going forward,[link widoczny dla zalogowanych], India s competitive edge is building up by way of the rupee getting to about 49-48. We have got some competitive advantage in exports also and the recent trends or the enquiries that we are generating in exports looks to be quite promising and going forward in the next year we should also see a jump in exports. I see overall the company should do well going forward.
Q: What exactly has your experience been in the export market,[link widoczny dla zalogowanych]? Do volumes remain intact but does pricing have to take a re-think or on both counts are you more cautious- volumes and prices,[link widoczny dla zalogowanych]?
A: When we look at exports we also have to look at imports because there are a lot of components which was into the making of shoes. If we are benefited on the import side we may lose slightly on the domestic side, so overall profitability of the company may not change much. But in terms of volumes we will always drive those volumes out of India and in exports we normally get our topline as well as bottomline growth much more than in domestic because the margins of profit are much lower in domestic as compared to exports. Overall if you look at the balance sheet it is not impacting much when the dollar bottoms to. Let us say 45-46 then there will be some pressure. I still believe it will set up from the imports which we are doing for the domestic or the raw materials and automatically it will nullify our position going forward.
Q: So given your domestic expansion what do you think you will close the year with in terms of sales?
A: We see some huge growth this year also,[link widoczny dla zalogowanych]. Now we are leading to the peak season which is the Diwali season and from September to March is our peak season,[link widoczny dla zalogowanych]. The average spend per person is much higher in winter season than in summer so we see a growth in sales in this year also but going forward in the next financial year we see much more rapid growth because we are setting up a huge supply chain management pipeline which will increase the ROI in our business channel partners and that will spurt the growth and faith in the companies working,[link widoczny dla zalogowanych].
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