admin
February 15, 2024
An insightful must-watch discussion, moderated by Devangshu Dutta (Founder, Third Eyesight), with venture capital fund managers, investors and entrepreneurs in retail on what factors attract investors to retail businesses.
The panelists included Vikram Gupta (Founder & Managing Partner, IvyCap Ventures), Amar Nagaram, (Co-Founder, Virgio), and Vikram Gawande (Vice President, Growth, Blume Ventures).
admin
December 12, 2023
Akshit Pushkarna, Afaqs
12 December 2023
The season for Indian weddings, usually spanning October to December, experienced an unusual twist due to Hindu calendar nuances this year, resulting in a shorter duration. The unexpected shift has upended the conventional decrease in marriage ceremonies, resulting in a condensed surge of weddings.
A report by the Confederation of All India Traders (CAIT) anticipates Rs 4.74 lakh crore in business earnings from the 38 lakh marriages expected this wedding season, marking a historic high. In comparison, the corresponding period last year witnessed around 32 lakh weddings with total expenses amounting to Rs 3.75 lakh crore.
This presents brands involved in the wedding business with an ample opportunity to capitalise and drive forth their business revenues for the year to come. Three key brands associated with wedding business are steering their strategies to align with the evolving preferences of Indian consumers in the lucrative wedding market.
A more region-specific focus for Shaadi.com’s marketing communication
In a conversation with afaqs!, Adhish Zaveri, VP-marketing, Shaadi.com, a prominent online matrimonial and matchmaking service, speaks about how digital media is more relevant for brand building for wedding-oriented businesses now, eclipsing the relevance of traditional TV and out-of-home advertising. He sees mass media serving only reminders to prompt registrations, while the primary focus shifts towards digital platforms.
This change involves a robust regional focus within our marketing playbook, recognising the dynamic shifts in matrimonial behavior across diverse geographies
Adhish Zaveri, VP-marketing, Shaadi.com
“This season, we have incorporated a paradigm shift in our marketing strategy, driven not only by the upswing in weddings but also by observing how Indians approach finding life partners, with nuances varying across regions. This change involves a robust regional focus within our marketing playbook, recognising the dynamic shifts in matrimonial behaviour across diverse geographies,” he says.
The campaign is driven by the company’s commitment to assure individuals of finding a match within a specified timeframe. The pledge to successfully matchmake within 30 days, with a refund guarantee, serves as the crux of their messaging this season. “Tailoring our approach to each market, we’ve executed this promise uniquely.”
This approach sees the company partner with people of influence across markets to drive better visibility. For the Hindi market, they’ve forged a strategic partnership with Jasleen Royal, the acclaimed singer behind popular wedding songs like Din Shagna Da and Hiriye. Leveraging her association, Zaveri says they have orchestrated a robust social media engagement strategy.
“In the Tamil market, we’ve employed celebrities who recently tied the knot as our ‘matchmakers.’ Adapting a viral reel from this region, featuring the celebrity couple, became a cornerstone of our campaign. While regional focus has always been part of our strategy, this time we’ve approached it through a celebrity lens, creating bespoke strategies for each South Indian market. Although distinct, each strategy is unified by a celebrity-centric approach. From featuring Supriya and Sachin Pilgaonkar for Marathi audiences to enlisting Jasleen Royal for the North, and partnering with Ashok Selvan and Keerthi Pandian for the South – we’ve delved deeper into regional dynamics,” he adds.
Zaveri believes the success of the approach is evident, particularly in the South, where the company’s market presence has increased dramatically post-campaign, providing them an opportunity to further invest in the region.
A focus on the Wedding planning business for Vikaas Gutgutia’s Ferns N Petals
In the backdrop of a season that signals prosperity, Vikaas Gutgutia, founder and managing director, Ferns N Petals (FnP), reflects on the trajectory of its business, navigating through the challenges of a pandemic-induced wedding lull.
He says FnP strategically sustained its business in 2022, aligning with the resumption of the wedding business. With the focus shifting to a year poised for business takeoff, the company plans on exploring the wedding planning business with their new business line Shaadi Central.
“With a legacy in the wedding industry, FnP has historically undertaken various wedding-related tasks, albeit not comprehensively under one roof or in an organised manner. This year marks a strategic shift as the company introduced ‘Shaadi Central,’ a luxury wedding company offering a one-stop solution for all wedding needs.”
“This holistic approach aims to streamline and elevate the wedding planning experience, allowing partners and their families to focus on the approaching wedding date with ease. The innovation and consolidation under ‘Shaadi Central’ have sparked notable interest and engagement in the new business venture. Having weathered a less-than-ideal summer season and traditionally subdued winter numbers, we anticipate a robust revenue surge, making the current season particularly promising,” he asserts.”
The business setup was sparked by Gutgutia’s assertion that, with the evolving landscape of wedding planning, which has made destination weddings and grandeur now necessary for some, the role of wedding planners has become significantly prominent. The launch’s alignment with the business boom anticipated with the wedding season of 2023, Gutgutia underscores the importance of timing in business.
The innovation and consolidation under ‘Shaadi Central’ have sparked notable interest and engagement in the new business venture.
Vikaas Gutgutia, founder and managing director, Ferns N Petals (FnP)
Delving into the marketing approach for this new business vertical, he explains, “The momentum generated by word of mouth for the growth of its wedding planning vertical. Each wedding becomes a nexus of potential customers, and social media plays a pivotal role in amplifying references. With clear and specific messaging in the realm of social media, we have successfully driven business, recognising the platform as the primary point of reference in shaping preferences.”
Looking ahead, FnP anticipates a substantial increase in business revenue across all its verticals. The wedding services vertical, in particular, is expected to bring in significant growth in revenue for the company. The belief stems from the observation that the wedding planning sector remains largely unorganised, and he believes that FnP stands out as a formidable player in terms of size and brand image. As the business charts its course forward, the wedding services vertical emerges as a key focus, poised for substantial expansion.
Senco Gold & Diamonds leveraging virtual try-ons for delivering business growth
Joita Sen, director- marketing and design, Senco Gold & Diamonds, says that the company, with a legacy of 80 years, is uniquely equipped to understand the evolving landscape of bridal desires.
Sen elaborates that the company started the year fresh after initiating their Rajwada Collection, a campaign with which the brand aims to weave together traditional designs infused with modern touches and patterns in their offerings. These offerings, thus, can resonate with the essence of the contemporary woman.
The move also sees the brand shifting its focus towards diverse designs, moving away from region-specific choices. Herein lies a unique selling proposition (USP) for the brand—fulfilling a diverse range of needs while ensuring accessibility across various price points. From high-end designs to more budget-friendly options, the brand aims to leave every customer content upon leaving the store.
“The evolution of groom preferences and competitive pricing have further shaped our approach. A significant aspect of our marketing strategy here revolves around social media, leveraging its targeted reach compared to traditional approaches like billboards and footfall. 50 percent of the marketing budget is allocated to digital channels, where advancements have allowed for more precise consumer outreach.”
50 percent of the marketing budget is allocated to digital channels, where advancements have allowed for more precise consumer outreach.
Joita Sen, director- marketing and design, Senco Gold & Diamonds
However, the digital realm poses a challenge in providing a comprehensive array of options compared to the immersive experience offered in showrooms. To address this, Sen acknowledges the importance of virtual try-ons.
“While currently available for select products, we are actively working on expanding our offerings in virtual try-ons. This approach proves instrumental in effectively communicating the design, look, and feel of the jewellery to consumers, bridging the gap between the digital and physical shopping experiences.
According to Devangshu Dutta, CEO, Third Eyesight, the ongoing mega-season of weddings presents a favourable outlook for formalwear and traditional wear brands across various categories. This surge in weddings is not limited to the upper-income segment but extends across the income spectrum, reaching the middle class and towns of all sizes.
Thus, to effectively capitalise on the wedding season, brands must establish a strong position in customers’ minds well in advance, he believes.
“Products and brands associated with brides, grooms, and close family members, as well as those intended for gifting to the extended family, are inherently perceived as “premium” within their respective consumer segments. This holds true regardless of the targeted population segment. Success as a “wedding brand” requires a long-term perspective, with continuous investments in product development, service enhancement, and marketing expenditure to ensure that the brand stands out prominently amid competition,” he says.
”In the current market landscape, achieving visibility demands a multi-modal approach, encompassing both offline and traditional channels, along with tactical online advertising.”
Devangshu Dutta, CEO, Third Eyesight
In the short term, however, he opines that the visibility and availability of products just before the wedding season play a crucial role in influencing specific performance during that period.
”In the current market landscape, achieving visibility demands a multi-modal approach, encompassing both offline and traditional channels, along with tactical online advertising.”
(Published in Afaqs)
admin
November 17, 2023
Smita Tripathi, Business Today
17 November 2023
“I don’t care about being No. 1 or No. 2. I don’t care about how much money I’ve made today, or how much money I’m going to make tomorrow. I think you are successful as a business if you last. Because when you’re trying to create a business, what is important is longevity,” says Sabyasachi Mukherjee, arguably the leading fashion designer in the country.
It is a sultry September morning in Kolkata as we interact with a relaxed Mukherjee—dressed in his signature white kurta-pyjamas and self-designed black sleeveless jacket (he made a guest appearance recently on Season 2 of Amazon Prime Video’s Made in Heaven with the same look)—at his beautiful home in Alipore, a tony locality in the City of Joy. The interiors, which ooze his signature baroque style, are an extension of his personality, which is also reflected in every Sabyasachi store. Mukherjee has tastefully decorated his abode with beautiful curios from around the world. Just like in his stores, the interiors of his home exude class and grandeur.
Mukherjee reveals that a few years ago, he was going through the anniversary issue from the 1930s of a leading fashion magazine. “I saw a small ad that said we are now open for business on Bond Street. It was for Tiffany’s. There were other larger ads for bigger brands from that time. But I don’t remember them. I remember Tiffany & Co. because it lasted and the rest of them just evaporated. And I said to myself that I’ll try my best that doesn’t happen to mine,” says the 49-year-old, who has come a long way since setting up his eponymous label in 1999 with a workforce of three, having borrowed Rs 20,000 from his family.
Over the past two decades, Mukherjee (or Sabya, as he is popularly called) has dressed Bollywood royalty (read Deepika Padukone, Anushka Sharma, Priyanka Chopra, Alia Bhatt), heiresses (Isha Ambani), models, and hundreds of brides across the world. Being a ‘Sabyasachi Bride’ has become a cultural phenomenon that has established the brand as a leading design house.
But Mukherjee doesn’t believe in resting on his laurels. It is the next 20 years that he is planning for. “I want to be India’s first global luxury brand.” And he is working towards it slowly and steadily.
Over the past few years, he has launched his jewellery line as well as accessories. The brand now offers ready-to-wear western wear and he recently entered into a collaboration with US luxury eyewear brand Morgenthal Frederics to launch his range of sunglasses. On the cards is a beauty and wellness line that should launch in a few months. Last year, he opened a store in New York; he had a window display of his jewellery at the Bergdorf Goodman store in Manhattan; and his clothes and accessories will be available at top luxury departmental stores like Selfridges and Browns in another couple of years. In March, he opened his largest flagship store, at 25,000 sq. ft, in Mumbai. “I have spent the last five years growing the brand and making it visible. If this country cannot occupy a position of power in the luxury industry, then shame on all of us. Luxury has been a part of our ecosystem,” he says.
Keeping in mind Mukherjee’s two goals—longevity and global growth for the brand—he sold a 51 per cent stake to Aditya Birla Fashion and Retail Ltd (ABFRL) in 2021, reportedly for Rs 398 crore. “Nobody in my family is interested in my business, I don’t have children, and often a mistake that many entrepreneurs make is that they don’t let go of control at a time when they should, so that they can build tomorrow,” says Mukherjee. “But what I want to do—while I’m still in my prime and I still have full control over my company—is to use the next 20 years to [plan for] tomorrow. I want to create my second-in-command; I want to create a succession plan. So that [brand] Sabyasachi does not go down with me; it deserves a much longer shelf life,” says the designer who broke the rules by signing out of fashion weeks in India and launching his collection directly on Instagram in 2016. It’s a practice the brand continues with the latest Autumn-Winter 2023 collection having dropped on Instagram in mid-September. “Why bother with front row politics, when the world can be your front row,” he says.
As he continues to grow, Mukherjee has not forgotten his middle-class roots. His father was the son of a refugee, raised by a single mother. He was a chemical engineer who worked in a jute/wool mill that shut down and he lost his job. “My father gave maths tuitions, my mother taught art and I taught English as a teenager to make ends meet,” he says, adding there was a time when he didn’t want to go to school because he was traumatised with the privilege that his friends enjoyed. “I once saw my father crying while standing next to the kitchen sink. And I realised that’s what money does to you. It brings you to your knees and strips you of your pride. I felt the same helplessness during Covid-19. I was responsible for all these people,” says Mukherjee. However, after a conversation with his CFO, the designer was relieved to know that they could survive for three years and as a result, no one was let go.
Mukherjee says he had been in talks with billionaire Kumar Mangalam Birla, Chairman of the Aditya Birla Group, for a few years before Covid-19 and it was his decision to sell the majority stake to ABFRL. He says he wanted to work with Birla for the way he has treated his children. “I think it takes a very wise parent to be able to allow his children to be what they want to be. I told him I wanted to partner with you because I think that you have a lot of wisdom. And for me, that’s a great value.”
The designer believes it is this wisdom that makes working with the group easy. “They’re silently trying to build an ecosystem for me without interference, because they know that I do the job the best because I know the domain the best. And they let me lead naturally… When I work with them, I don’t have to be mindfully conscious of the fact that they’re a $57-billion empire. They treat me as an equal partner.”
Harminder Sahni, Founder & MD of consulting firm Wazir Advisors, says that the only way forward for brands like Sabyasachi is to either sell to a corporate or to corporatise. “For growth, you need the backing of a corporate house. Especially if you want to go global as it’s an expensive foray and it is uncharted territory.” As far as expansion into various categories is concerned, Sahni says there is no playbook. While some may expand into larger small-ticket categories to make the brand available to a larger demography, others may stick to their core.
“For any brand to scale globally, it needs to be relevant to consumer audiences that are outside its home market,” says Devangshu Dutta, Chief Executive of consultancy Third Eyesight. For any brand whose products draw heavily from the roots in terms of silhouettes and embellishment techniques, adding products that fit with the ethos and needs of the targeted global markets becomes a must, he adds.
ABFRL and Mukherjee complement each other as the company brings its expertise in understanding consumers at a larger base while the designer is more aware of consumers at the top of the pyramid. “They have a very acute understanding of a consumer that is not mine today but will be mine tomorrow. And I have a very acute understanding of the consumer that they don’t have yet but might get tomorrow.” Mukherjee says he did not take private equity funding earlier because he was not ready. “I’m not here to make money. I’m here to create value. And there’s a huge difference. Value creates money eventually. But money never creates value. With ABFRL, we are very clear about what we want to do.” As for financials, in FY22, Sabyasachi Calcutta (what the company is called post the acquisition) posted a turnover of Rs 229.42 crore, which rose to Rs 343.86 crore in FY23, per ABFRL’s annual report. But profit after tax fell from Rs 27.72 crore in FY22 to Rs 7.96 crore in FY23.
He feels luxury is becoming more abstract and it is about finding value. Moreover, consumers are buying less but better stuff. “People are flirting, but they’re not consuming. It’s like they are channel surfing. What is going to happen is that consumers are going to buy less, but they’re going to buy better. And I’m preparing my brand for that.”
With ABFRL’s backing, the designer is busy strengthening the brand. “We are going to use our core—which is wedding couture—for storytelling, to be able to create different-tiered products at different prices to be able to engage our customers who will slowly and steadily find a ladder to climb up to the core.” However, he plans to make wedding couture very limited and very exclusive. He has already started creating guardrails. Bollywood partnerships have reduced significantly and he is no longer giving his creations for the red carpet. In today’s age of social media, Mukherjee says that everyone believes that they are a celebrity. “For us, our customers are our celebrities. And we are trying to create something that is unique for them. And that’s something that’s not made very visible. But what we are going to make democratically visible are our entry-level products; once we get into beauty that is going to be the most widely distributed. And then it’s going to be accessories.”
Mukherjee says that Indian clothing, which is the heart and soul of the brand, will become more and more exclusive. In clothing, the focus will be on western ready-to-wear. However, that too will be of the best quality. For instance, ready-to-wear starts at Rs 35,000 for a silk shirt with an original artwork, digitally printed. “We are very mindful that we will never dilute the core.” he says.
While currently it is wedding couture that contributes the maximum to revenues, he expects jewellery to surpass that over the next few years. Mukherjee launched his jewellery collection in 2017 and while it was a natural fit, he had an interesting reason for doing so. “When I started looking at people’s selfies, I realised that we occupy the smallest real estate. You see a little bit of the blouse in a wedding picture, you see the garland, the make-up and the jewellery. Where are the clothes? Nowhere. And if the bride decides to wear a bikini blouse, then God save us,” he laughs. “So that’s when I realised that I want more real estate in that picture. And, for me, it was a logical move to start getting into beauty which we’ll eventually get into, and to get into jewellery.”
Accessories is another category he is focussing on as that allows more people to own the brand. Mukherjee is one of the most copied designers in the country. “Today, all top jewellers in the country are copying my jewellery. It happened with my clothes, it’s now happening with my jewellery, so I know we are on the right track,” he says. The same is the case for his accessories. “You go into a copy market and you see LV, Calvin Klein, Gucci and Sabyasachi. I am flattered because that means we have done something right,” he chuckles.
Over the years he has entered into some remarkable collaborations, establishing his brand further. In 2015, he announced his first global one with Christian Louboutin with a collection of limited-edition shoes and handbags, showcasing Sabyasachi’s hallmark embroidery and craft, with Louboutin’s iconic red sole. He also launched the Sabyasachi for Nilaya collection in collaboration with Asian Paints. Other collaborations have included Pottery Barn, H&M, L’Oréal, Strabucks, Thomas Goode, etc. He says he is open to more collaborations but only with brands that are the best in their field and those that allow him to “tell the Indian story without apology”. “I would never do a collaboration, irrespective of how much money was being offered to me, if I was not able to tell the story of who I am and where I come from. I can make more money by selling on my Instagram,” says the designer who went off all social media three years ago to get away from the clutter and the noise. His brand, though, is very active on social media.
Mukherjee can be credited with revolutionising luxury retail in the country. Walk into any Sabyasachi store and you are transported to a world of opulence and luxury rarely seen anywhere else. For instance, at the Mumbai store, over 100 chandeliers, 275 carpets, 3,000 books, and 150 works of art created by the Sabyasachi Art Foundation—which he runs to promote art—are layered among antique Tanjore paintings, vintage photography, rare lithographs, and historical trinkets, some from his own collection.
“When I saw the Ralph Lauren flagship store for the first time, it made me realise how important the soft power of a retail store is to be able to influence a customer because it’s an immersive journey, which tells the length and the breadth of the brand’s story,” says Mukherjee, adding that today it is not just about the product but also the experience of selling the product.
With the opening of the Mumbai flagship store, the total number of Sabyasachi stores in India stands at four, the others being in Kolkata and Delhi, and a jewellery store in Hyderabad. In addition, there is the New York store and an exclusive Sabyasachi Jewellery boutique in Dubai.
Will he look at more expansion? Not immediately, he says. “We are going to build our flagship stores one geography at a time. I first want to expand brand literacy by building our flagship so that the story of what the brand is all about and who we are does not get diluted. We will take our time to understand the geography and then expand later,” he says. However, a part of the business is going to be opened to wholesale again. “Which means that in a couple of years, we are going to start speaking to departmental stores such as Selfridges, Browns, etc.,” These are stores where Mukherjee used to retail at the beginning of his career in 2004-05.
“Right now, I’m charting my own growth, one brick at a time, so that I last those 100 years,” he signs off.
(Published in Business Today)
admin
February 23, 2023
India’s economy is in focus globally, and is also at an inflection point.
Join Devangshu Dutta at the Asia-Pacific conference of UFI, The Global Association of the Exhibition Industry. Registration Link: https://lnkd.in/dq89_rY3
See you at UFI Asia-Pacific Conference in Kuala Lumpur!
admin
April 27, 2022
By Manu Balachandran, Forbes India
Apr 27, 2022
Sometime in 2002, in his mid-20s, Ravi Modi wanted to buy a Mercedes. Not because he was a petrol head or because he wanted to flaunt his newfound success in his hometown, Kolkata.
“My belief was that if you can afford it, buy it,” says Modi, who’s dressed in a blue kurta pyjama at his house in Newtown, Kolkata. His then-four-year-old business, Vedant Fashions, which made popular ethnic wear, Manyavar, was doing reasonably well and money was flowing smoothly. However, as he firmed up his plans to buy a Mercedes, his father, who had earlier inadvertently brought out the entrepreneur in Modi, asked his son a few questions. And then doled out some sound advice.
“He asked me whether I can afford it. I said I can,” the soft-spoken Marwari tells Forbes India. “He asked me if my business was sustainable. I said yes. He said you will require capital. I said yes. He asked me if my business has the potential to grow. And I said yes.” Modi adds: “Then he told me, ‘Thode din ke taklif zindagi bharka aaram, ya thode din ka aaram, zindagi bharki taklif (Pain for a few days, and you can have a lifetime of relaxation, or relax for a few days, and you could have pain for the rest of your life)’.”
That stuck with him forever. Modi skipped his plan to buy a Mercedes, and instead decided to plough back all the profits into the business to avoid falling into a debt trap as he expanded. He stuck with his Honda City for the next 15 years, until his son asked him to change it after a family friend met with an accident. “That’s when I bought my Mercedes in 2017,” Modi says. “All these things don’t matter to me. I am a simple man with no materialistic needs. I like the simple life.”
Modi indeed leads a simple life on the outskirts of Kolkata. Unlike many of his peers who relish the hustle and bustle of city life, he has moved out of his home of 36 years to a calm and greener township where he even grows vegetables. “Whatever vegetables we eat, they come from within the house,” Modi says. He prefers to meet people on the verandah of his house, which overlooks a neatly manicured lawn. The scorching Kolkata heat doesn’t bother him.
“Here, the trees talk to me,” says Modi, who tried 12 houses before shifting to the new one immediately after the first lockdown. He has built a clay tennis court there and is now learning to play the game. Modi has also renounced wearing western clothes, claiming not to have worn one in five years. “We must realise that clothes such as suits aren’t meant for the Indian climate,” he says.
He’s even reduced the time he spends in office, and now goes there only once a week. It hasn’t made any difference to his business. Modi makes his debut on the 2022 Forbes World’s Billionaires List—he’s ranked 1,238 with a net worth of $2.5 billion. As of April 15, Modi’s wealth stood at $3 billion and he is among the youngest billionaires in India.
His 23-year-old company, Vedant Fashions Limited, of which he is chairman and managing director, is worth ₹26,000 crore after it listed on the bourses in February. It has over 600 stores across India and 11 international stores, where it sells everything from men’s kurtas, sherwanis and jackets to women’s lehengas, sarees and gowns. They are sold under brands such as Manyavar, Mohey and Mebaz.
Last year, amid the pandemic, Vedant Fashions closed the year with a revenue of ₹564.81 crore, while net profit stood at ₹132.9 crore. A year before that, revenue was ₹915.54 crore and net profit ₹236.6 crore. Modi’s wife Shilpi has a board seat, while his only child, Vedant, after whom the company is named, is chief marketing officer.
“I am a firm believer in destiny,” says Modi. If it wasn’t for his destiny, the 45-year-old believes he would have perhaps been sitting at his nearly-50-year-old family-run shop in Kolkata’s AC Market, selling menswear, and at best opened one more store to expand the business.
Destined for Success
As a child, Modi, the only son of his parents, was good at mathematics. His father then ran a 140-sq-ft retail store inside AC Market in Kolkata—one of India’s first air-conditioned markets set up some 50 years ago.
“In Class 2, I got 100 in mathematics, and my mother threw a party,” says Modi. “In Class 3, when I got 100, my mother didn’t give a party. That’s when I realised that nobody celebrates the same achievement twice. I needed some kick and I started solving the paper faster.” By the time he appeared for his Class 12 exam, he finished his mathematics papers in 45 minutes, scoring a near cent. “Anybody who remembers me from school days would remember me for mathematics,” says the soft-spoken billionaire.
The untold story of how Ravi Modi built Vedant Fashions—the makers of Manyavar—into a .5 billion behemothThat meant, by the time he was 13, Modi joined his father at their retail store, which sold everything from shirts and pants to jeans, after school. “I found a lot of interest,” says Modi. “Somehow, I didn’t realise that my entire childhood from 13 years went in my store.” While he did contemplate doing an MBA after graduating in commerce from St Xavier’s college, Kolkata, his father suggested otherwise. “The real MBA happened in those nine years between 13 and 22,” says Modi.
At the store, Modi played salesman, often catering to buyers his staff didn’t want to deal with. “I would see that the salesmen would deal with some customers with a lot of attention, and some without,” says Modi. “When I probed them, they said the customers wouldn’t buy. I would ask them if they were astrologers, and used to take it on me to sell stuff to them. That was my kick.” Soon, Modi would end up selling over 20 clothes to a customer who would have come to buy one shirt. “It was the best time of my life,” Modi says. By the time he was 21, he was married, and by 22, Modi became a father.
As the business grew, Modi began to run the show and took decisions that would be a contrast to his father’s. He also introduced Indian wear, manufactured by them, in the store after realising a massive vacuum in the Indian wear category. It was Modi’s first tryst with manufacturing. “But one day, my father said something, and I got hurt,” Modi says. His father had questioned a decision that Modi had taken for ₹20,000. “He said ‘Humko barbad kardoge (Will you ruin us)? I might commit suicide one day.’ I said this is enough, I won’t come from tomorrow.”
He took ₹10,000 from his mother and turned to manufacturing Indian wear, selling the finished products in Uttar Pradesh, Odisha, Bihar, Madhya Pradesh and West Bengal, among others. “I started selling to multi-brand outlets (MBOs),” he says. The inability to hire a creative agency meant Modi had to come up with a name. “I thought what was the purpose of life… it was to earn some respect for oneself,” says Modi. “That’s how we came up with the name Manyavar.” He denies that the choice of the name had anything to with his father’s chiding. “He was someone who would never say something like that,” says Modi. “It’s all destiny. Because there was no plan, and I was happy at the store. We would, at best, have opened one more store.”
With Manyavar, Modi started by selling 20 percent of his stock to Kolkata-based Vishal Mega Mart, to raise enough working capital to sustain his business. He sold the rest of the stock to other outlets. “Vishal Maga Mart was the only place that used to buy on cash,” says Modi. “So initially, for about eight months, the working capital came from them.”
Modi sold kurtas which cost ₹200 at a loss of ₹10 to ensure he was paid in cash. “Just because I was strong in math, I thought I will sell 20 percent of my production to him to get working capital, and from the remaining 80 percent production, I will get revenue. That is how we generated revenue in the first year,” Modi says.
Among others, Manyavar’s clothes were sold at outlets such as the Kashmir Vastralaya collection and Kala Mandir in the early days.
Turning point
By 2005-06, Modi had begun selling his products to large format stores (LFS)—from Future Group to Shoppers Stop and Westside—building a pan-India presence. Heeding his father’s advice, he ensured he did not take on debt, and instead channelled most of the money into the business.
In 2006, to take care of his ailing father, Modi stepped away from work for some six months. “I used to work like a typical entrepreneur, managing everything. Life was very busy. Then I realised we were unnecessarily involving ourselves in operations. The business was running well without me for six months. From that day I understood, that instead of ROI (return on investment), it should be return on time invested (ROTI). I realised I should not waste time on things where I don’t add any value,” he says.
That took him back to the drawing board—to focus on strategy for the next phase of growth. By 2008, Manyavar set up its first exclusive brand outlet (EBO). “That’s when the real journey began,” says Modi. “Until then, we used to sell for ₹20-25 crore every year.” The company’s first store opened in Bhubaneswar, and over the next year, opened 12 stores. The early ones were opened by the company before it moved to a franchise-led model. “By that time, I was clear that the way forward for any fashion apparel business in India is EBO,” says Modi.
Modi believed multi-brand outlets were becoming more of a hindrance than being facilitators. “They never used to work on data,” he says. “It was difficult to make them understand anything. And because I had spent nine years with consumers, we used to always think of the customers first.”
That means an obsession with data, and efficiency, something Modi spends a considerable amount of time on. “Anything and everything we do, we want to bring efficiency,” he says. “We have one of the highest productivities in retail. We haven’t sold a single garment at discount. Even then, the dead stock in Manyavar is less than 3 percent. We make 30 percent PAT (profit after tax). We don’t make that by charging more to the consumer. That’s an outcome of efficiency. We keep pricing reasonable and despite that, we have the highest margin. Efficiency is a key pillar in our entire organisation.”
Today, the company operates mostly on a franchise-owned-franchise-operated model. “When we started, we had a COCO (company-owned-company-operated), COFO (company-owned-franchise operated), FOFO (franchise-owned-franchise-operated), and all kinds of models. By 2016-17, we converted all our stores into the FOFO model. People were doing backward integration, and we felt doing forward integration was the way to go. We will do the marketing, designing and supply chain, and not do anything else.” Over the past few years, Modi claims several young customers have become franchise owners, including doctors and consultants, who see massive potential in the brand.
In 2016, the company pulled a coup of sorts by landing then Indian cricket captain Virat Kohli as brand ambassador. “He had just become captain It was the best time of his life,” says Modi. Over the next few years, Kohli led the brand campaign and Modi even roped in his girlfriend Anushka Sharma for a commercial prior to their marriage. Today, the brand has actors Amitabh Bachchan, Alia Bhatt, Ranveer Singh and Kartik Aaryan as brand ambassadors.
The success
Today, Manyavar operates some 1.3 million sq ft of retail stores in the country, choosing not to chase the number of stores. Every year, Modi wants to add between 1.5 lakh sq ft and 2 lakh sq ft of retail space. “The whole business is on a variable, asset-light model,” he says. “There is no capex, there is no fixed expense other than corporate head office salary. Every rupee of working capital can generate an equal rupee of PAT, with 90-95 percent free cash flow. Only Unilever will have a ROCE (return on capital employed) of 100 percent, and we might be the second, and within a year or two, we will be at more than 100 percent.”
The untold story of how Ravi Modi built Vedant Fashions—the makers of Manyavar—into a .5 billion behemothThe company operates in 230 cities, and is busy firming up plans to open stores in 150 new cities. A significant portion of its customers are spread across Southern India, with Bengaluru and Hyderabad emerging as the two big centres. “We have a cluster approach where we believe in 50 or 60 markets, where we have numerous stores,” Modi says. “This is just the beginning of a multi-decade growth opportunity for the category.”
Along the way, in 2017, as business expanded rapidly, Modi decided to turn to private equity, not because he needed money for expanding the business. “We always thought that there is a limit for wisdom and knowledge,” says Modi. “We had been meeting private equity players since 2008 and we thought why not get a good partner. We liked Kedaara Capital and its approach. Money was not the intent, but to have a wise board and to understand whether we were missing on anything.” Kedaara Capital acquired 7.5 percent stake in the company.
“They’ve ridden well on the sector’s growth and consolidation into modern trade, as the desire for brands has grown among buyers of Indian traditional clothing,” says Devangshu Dutta, chief executive of Third Eyesight, a management consulting firm, and managing partner of PVC Partners, an early-stage investment & advisory firm. “Also, the wedding market is more recession-proof than many other segments, which has been a favourable factor during the pandemic.”
Last year, despite the pandemic, Modi says Vedant Fashions closed the year with better profit margins, despite most states putting a ban on weddings and other social gatherings. “The beauty of our business is that while business had reduced, our margins were 30 percent PAT,” Modi says. “The entire business is on the variable model and even franchises didn’t lose money.”
In India, the men’s wedding and celebration wear market was estimated to be worth approximately ₹13,300 crore as of FY20, according to brokerage firm HDFC Securities. It is projected to increase to between ₹17,000 crore and ₹18,000 crore by 2025. In comparison, the women’s wedding and celebration wear market is significantly larger, estimated to be worth approximately ₹7,500 crore as of 2020. It is expected to grow to ₹95,000 crore and ₹100,000 crore by 2025.
“Seventy-three percent of Vedant Fashions Limited’s (VFL) franchisees have operated its stores for three or more years and 65 percent of the sales of its customers from its franchisee-owned EBOs are derived from franchisees having two or more stores is testament to the success of EBO distribution model,” HDFC Securities said in a report in February. “Through a network of over 300 franchisees as of September 2021, VFL has demonstrated a track record of commanding a high initial capital commitment and, in return, providing all necessary support in connection with identifying potential locations for new stores, managing multi-channel advertising on a national and regional basis, assisting in-store development and inventory management, directly managing the supply chain and providing detailed training programmes for store staff and franchisees.”
Today, 90 percent of the company’s business comes from EBO with about 8 percent from online models, a segment that Modi’s son, Vedant, and his team are extensively looking to build. “We might be the only brand with such a high percentage from EBOs,” Modi says. “The segment is unorganised, fragmented, and understanding this is a journey. Because we were data-focussed, we could work it out.” Along the way, Modi says his biggest advantage has been in reducing the inconvenience of wedding purchases.
“Pre-Manyavar, the wedding shopping experience was a problem,” Modi says. “You had to go a few times to the store for measurements or alterations. Now people don’t have the time. We are a one-stop solution where work can be done in one hour.”
Now, as the company looks at avenues for its next phase of growth, Modi has forayed into categories within the wedding market that can drive sales. The company recently launched Twamev, a premium collection of men’s wedding wear, and Manthan, a cheaper option to its popular Manyavar wear. “When you look at the Indian pyramid, there are five consumer layers. Manyavar and Mohey are in the third layer which is the sweet spot, comprising the typical aspirational middle class,” Modi says. “In India, one crore weddings take place, and 30 lakh to 35 lakh marriages happen in that category, which is about 50 percent in terms of value. We believe that is the largest segment, but now we have a strategy where we are going one level up and down.”
While Manyavar caters to the ₹5 lakh to ₹50 lakh wedding market, the ₹50 lakh to ₹5 crore market is being catered to by Twamev, while the less than ₹5 lakh is being addressed by the Manthan range. “We believe once the category grows, we should be there in all these three layers. So, there is clear demarcation and no overlap,” Modi says.
All that means that the reclusive billionaire, who started out two decades ago after his tryst with destiny, is getting ready for a long period of growth. It also helps that he has more time to plot his strategy for it. “People talk about wealth, I believe the real wealth I have earned is time for myself,” Modi says. “The mission is to be a dominant player in the celebration space. We have cracked an unorganised market and we’ve been able to organise it and scale it. Now, the vision is to instill pride in Indian wear.”
Modi seems determined to do that. And he is certain to walk that talk, if the two decades are anything to go by.
(This article was published in Forbes India.)
