‘We have seen 70% growth in business from repeat customers’
Value fashion retailer V-Mart acquired Arvind Lifestyle’s Unlimited stores, which has a presence across South and West India, last month, in a bid to scale up. Vineet Jain talks to Sheena Sachdeva about V-Mart’s retail expansion plan, shopping trends during the pandemic, and expectations from the festive season.
How do you see your retail expansion panning out post the acquisition of value fashion chain Unlimited?
With this acquisition, V-Mart now has 356 stores across the country. The idea was to enter the Southern and Western region at one go with this acquisition, because opening new stores across the country would require time. There is synergy between Unlimited and V-Mart due to the similar affordable fashion premise. In the last few years, we have been growing at 30-35%. In 2021, we expect to achieve high growth numbers with the help of Unlimited stores, and opening up 40 new stores in the coming months. Currently, the approach is to stabilise our stock inventory across Unlimited stores.
In July, V-Mart opened new stores in Godda (Jharkhand), and Kanpur (Uttar Pradesh); another one will be launched in Dwarka (Delhi), this month. We are bullish on growth as the retail industry is changing, given the numerous acquisition opportunities. We believe that companies that have a good working capital will be doing fair business in the coming months, similar to V-Mart. Further, our cluster-based strategy, where we cover a specific area rather than large areas, has helped our growth. Through this, we have better control over geography, as we first understand the requirements of a cluster closely, and procure products accordingly. Secondly, we have better supply chain management. Lastly, a cluster-based strategy involves having more stores in one area or city, which helps increase our brand visibility.
V-mart reported an 8% increase in basket size during Q4 FY21. How do you plan to sustain this momentum?
The price range offered by V-Mart is quite affordable in comparison to other brands in the market. In Q4 FY21, V-Mart’s Holi and summer collections received good traction. Through our online channel, we have access to some rich data, and we are analysing this to understand the needs of consumers. We have seen 65-70% growth in business from our repeat customers. To keep this growth intact, we are introducing offers and shopping vouchers. We are also strengthening our product line — we will be launching our home décor segment, and introducing FMCG products on our platform, both offline and online.
How has shopping behaviour changed during the pandemic in your view?
In comparison to pre-Covid times, people are shopping more now, as there is huge pent-up demand. We have seen an increase of 20-25% in per-customer spending in comparison to 2019, compensating for the declining footfall. Despite protocols and lockdown restrictions in cities, our overall business has recovered by 90% in July this year, in comparison to pre-Covid times. Since the pandemic hit the country in March last year, we have seen high demand for daily or comfort wear and kidswear — the kidswear segment is growing at 25-30% since 2020.
New-age customers are eager to engage with brands through chat and video calls. We are testing this technology to give customers an enjoyable and seamless experience. Our focus is to digitise our processes holistically. Since last year, we have made improvements to our D2C platform, Vmartretail.com. We have also tied up with marketplaces like Amazon. While the focus is on omnichannel, the growth from the online channel is not exponential just yet.
Despite supply chain issues and raw material price hikes, we are trying our best to cater to the demand and not pass on the resultant price hike to customers.
What kind of upturn are you expecting from the wedding and festive seasons this year?
We are excited about the upcoming wedding and festive seasons. Last year, there was shopping galore at our stores during these times. We started recovering from November last year, and during Diwali, we saw high growth. Similarly, in July this year, there was pent-up demand. The festive season is important as it overlaps with the winter season collection, adding to the overall growth. With our products in place, we are expecting similar growth this time, too. We expect an increase in contribution by our private label segment to the overall business.