We have co-branded partnerships and also engage in tie-ups with designers. Almost 80% of the business is protected through exclusive tie-ups, says Vasanth Kumar, Managing Director, Lifestyle International
By Sonam Saini
Lifestyle International recently partnered with e-tailers Flipkart, Myntra and Amazon to give its online distribution a boost. Vasanth Kumar talks to Sonam Saini about the company’s ambitious online sales target, its preparedness to take on IKEA, and why its Splash stores failed to make a splash in India, among other things.
Are you on track to achieve 15% growth in online sales post the partnership with Flipkart? What differentiation will your private labels bring to Flipkart’s current range?
We launched our own website three years ago, and close to 3% of our sales today comes from there. We believe the online apparel and footwear market will grow by 15% in the next four years. We should also be able to achieve 15% growth in online sales, but not with the website alone. Therefore, we felt Flipkart was the right group. Lifestyle is a family-driven brand, whereas Flipkart’s brands are more inclined towards younger audiences. That is where we are different as we cater to all age groups.
Lifestyle took to the online platform aggressively only recently. Why did it take so long?
I don’t think we were slow. Until three years back, online itself was very small. If you compare us with any other retailer, we are ahead with 3% turnover from online sales. But we realised that this isn’t going to help us reach double digits, which is why we chose to have a strategic alliance. We don’t see online and offline as completely different portfolios. We only see it as expansion to a new-age channel. We have a 150-member team working in the online division. Around 8% of our online business comes through click-and-collect; we expect this to go up to at least 20% over the next three to four years.
As the competition intensifies from domestic as well as international retailers, do you plan to expand your retail footprint?
Lifestyle is a mall-led channel. As and when we see the right mall, we take a position and expand our business. Our expansion rate is around nine stores a year for the next two-three years, and I don’t see it coming down. We are present in 44 cities and plan to add two new cities — Guwahati and Patna. Seven more stores will be opened in our existing markets like New Delhi, Mumbai,
Bengaluru and Hyderabad.
Will you extend Max’s e-tail tie-up beyond Amazon? Will Max’s own e-commerce app be phased out eventually?
We don’t see the need to expand to multiple e-tail portals. We have worked on the concept of strategic fit. Flipkart and Myntra are strategic fits for Lifestyle brands, whereas Amazon is a strategic fit for Max Fashion. These e-tailers have extensive penetration, so what’s the point of duplication? We will continue to have our own website and apps. We are following an omnichannel model through which customers can click-and-collect and return-to-store.
With IKEA fortifying its retail presence, how equipped is Home Centre to battle it out in the furniture and home décor segment, both offline and online?
At Home Centre, 75% of the stock is designed in-house, while the rest is imported. Moreover, 25% of the furniture and homeware products are exclusive in nature. We have co-branded partnerships and also engage in tie-ups with designers. Almost 80% of the business is protected through exclusive tie-ups. Besides, our pricing is higher than most other retailers. We are more premium than IKEA in terms of product and pricing. The organised furniture market penetration is only 5%. We are trying to increase the frequency of purchase. The advantage we have is that we sell household items as well. In the online space, we have a partnership with Amazon. Right now, online is contributing 5% to the overall business, but we expect it to go up to 20% in four years.
In July this year, Landmark shut down several Splash Fashion stores in India. Why the rationalisation?
Splash Fashion was launched with the intention of getting into the high-fashion segment. But the concept did not take off in India, whereas internationally it is a very strong brand. Therefore, we decided to cut down the number of stores from 18 to six. The brand will be present in North India, since we are getting more traction in those markets, and on online platforms.