Fabindia

fab india history, products, financial analysis,marketing strategy,sucess factor.

1. Title Layout Presented by: Ashish - 114030 Alan -114014 Archit Deepanshu Divyanshu Dhruv

2. Introduction It is an Indian chain store retailing garments, furnishings, fabrics and ethnic products handmade by craftspeople across rural India. It is largest private platform for products that are made from traditional techniques, skills and hand-based processes. Hand based processes has set Fab India apart from any other commercial brands. All Fab India products are natural, craft based, contemporary and affordable in price . Founded in 1960 By John Bissel 1976: First retail store in Delhi 1993: Second retail store in Delhi 1996: Third retail store in Bangalore 2000: Non-textile range start 2004 : Organic Food introduced 2006 : Personal Care products 2008 : Handcrafted Jewellery

3. History of Entrepreneur (Bio- graphy ) Mr. John Bissell was born in Hartford and educated at the Brooks School in North Andover, Mass., and at Yale. His love for India began as a child, listening to tales his father told of his time in India during World War II. After college, Mr. Bissell worked at Macy's, and began to like the look and feel of hand-woven fabrics. Those two interests merged in 1958, when he was given a two-year grant from the Ford Foundation to instruct Indian villagers in making goods for export. Once his grant expired, Mr. Bissell decided to remain. He founded a business, Fabindia Ltd. In 1960, that bought locally produced items like dhurrie rugs and exported them .

4. Contd … Mr . Bissell married Bimla Nanda, who served as social secretary for Chester A. Bowles and John Kenneth Galbraith when they were United States Ambassadors to India . Besides his wife, Mr. Bissell is survived by a son, William, who now runs Fabindia, and a daughter, Monsoon, both of New Delhi.

5. START OF FABINDIA 1958 – John Bissell arrives in India on 15 august on a two year contract from ford foundation to work with the nascent Indian crafts set up. 1958-1960 – Travels across the country, meeting craftsmen. 1960- Fabindia founded by bissel,incorporated as Fabindia inc in the us in November 1965 – Panipat’s A,S Khera becomes a supplier of carpets – a connection that will be crucial to the Fabindia growth story. 1976 – due to regulation registers as an Indian company; 40% of the company is with shareholders and 60% with Bissell's family and friends. First retail store opened in greater kailash1, Delhi

6. CONTD. 1976-90 – Fabindia become a global name, known for garments made from hand printed fabrics. 1994- second store at vasant kunj, Delhi 1999- after died of john Bissell William takes over as MD , refocuses attention to domestic market. 2007- Fabindia hives off section to form artisans microfinance, a firm investing in community based companies or supplier region companies. 2009- Fabindia acquires 25% stake in Uk retail chain, east 2010- Fabindia crosses 100 stores. Now a days Fabindia exports to over 33 countries worldwide, to wholesalers as well as retailers.

7. 2007- Fabindia hives off section to form artisans microfinance, a firm investing in community based companies or supplier region companies. 2009- Fabindia acquires 25% stake in Uk retail chain, east 2010- Fabindia crosses 100 stores. Now a days Fabindia exports to over 33 countries worldwide, to wholesalers as well as retailers.

8. Products The major portion of Fabindia’s product range is textile based. The non textile products were introduced to Fabindia in October 2000 and  Organic Food Products were introduced in July 2004 Fabindia’s introduced the authentic Personal care products in March 2006 and in 2008 it started handicraft jewellery. The textile-based product ranges ready-to-wear garments and accessories for men, women, teenagers and children; bed, bath, table and kitchen linen; floor coverings, upholstery fabric and curtains. Cotton, silk, wool, grass, linen and jute are the basic fibres used.

9. Contd. The Home Products includes furniture, lighting, stationery, tableware, cane baskets and a selection of handcrafted utility items. Organics products carries several types of cereals, grains, pulses, spices, sugar, tea, coffee, honey, fruit preserves and herbs. Fabindia's range of authentic Personal care products includes soaps, shampoos, hair oils, pure oils, moisturisers, body scrubs, face packs, hair conditioners & special skin care products.

10. Products and Services Garments Home furnishings Home linen Accessories Personal products Organic products

11. Financial Analysis Financial aspects of Fabindia have been compared with Pantaloons Though not a director competitor , it represents the Indian Retail industry very well Financials for its direct competitors such as Anokhi , khadi gram Udhyog etc. were not available , restricting comparison This assessment contrasts the performance of Fabindia with respect to the biggest retailer of India Hence, we get a sense of the feasible options available with FabIndia to raise funds.

12. Interest Coverage Ratio The interest coverage ratio of Fabindia is far higher than that of Pantoons . Hence , raising funds through debt is not a big challenge .

13. Interest Cost as % of Sales The interest costs as a percentage of sales for Fabindia is far lesser than that of Pantaloons. Hence , raising funds through debt is again not a big challenge

14. Profit Margin Ratio ( In%) The PAT as a percentage of sales of Fabindia is higher than that of Pantaloons. Through retail industry works at low margins , Fabindia’s ;margin are quite high. Hence ,raising funds through debt is not a big a challenge.

15. Financial Analysis Of FABINDIA Change in customer consumption pattern and increased income per capita has given boost to domestic sales of Fabindia. In last five years (2002-06), turnover of Fabindia has increased by 335% and profit by 422%. Fabindia’s vision is to expand to 200 stores and  grow its revenue to Rs 8.6 billion  by FY 2016. Key challenges  in achieving target revenue of Rs 8.6 billion are additional capital requirement, shortage of qualified personnel, threat from new retail chains, increasing rental rates, and uncertainty in supply. New retail chains  like Pantaloon, Trend Ltd, Shoppers World, ITC have entered in garments sector posing potential threat to Fabindia. 70% of Fabindia’s revenue are generated from garments.

16. Sales Target Year Sales target 2007 100 million 2008 250 million 2009 350 million 2010 450 million 2011 500 million

17. Revenue Target Year Addition Revenue 2007 250 million 2008 550 million 2009 953 million 2010 1203 million 2011 1403 million

18. Franchise and Expected Revenue Year No of new franchisee Total no of franchise e revenue per store Total revenue 2007 50 50 3 million 150 million 2008 50 100 3 million 300 million 2009 51 151 3 million 453 million

19. Additional Expected Revenue Year revenue from organics and body care Revenue from franchisee stores Revenue from new stores Total Revenue 2007 100 million 150 million 250 million 2008 250 million 300 million 550 million 2009 350 million 453 million 150 million 953 million 2010 450 million 453 million 300 million 1203 million 2011 500 millions 453 millions 450 million 1403 million

20. Success Factors Regional business programs-Develop retail store based on region/genre. Rapid expansion to newer cities-plan to open 40-45 new stores every year. Diversification-expanding into new products categories such as furniture and organic food. G lobal expansion-adapting to the local culture and expansion into the large India Diaspora . A supply chain network of more than 40000 handlooms weavers and artist . Training their employees to understand the importance to being friendly. Two level of suppliers national and regional based . R ange of garment available and use of natural fabric. P articipation in organic /traditional food festivals/rural exhibitions/ mela’s .

21. Challenges F aced Organized sectors Garment based ( shoppers,website , reliance e trends) Government handlooms initiatives(khadi, gramodyog,cottage industries emporiam ,) D esigner boutiques- ethnic wear retailers like khaddar Unorganized sector Local tailors who provide customized garments to the customers at reasonable prices. Local NGO selling wares,like dilli haat etc

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23. Two content layout with table First bullet point here Second bullet point here Third bullet point here Group 1 Group 2 Class 1 82 95 Class 2 76 88 Class 3 84 90

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25. Infusion of Funding To aid the rapid growth, FabIndia will raise equity either through IPO or Private Placements Diversification Expanding into new product categories such Furniture and Organic Food Fab India’ s Regional Business Programs Develop retail stores based on region/genre Rapid Expansoin into newer cities Plan to open 40-45 micro stores* every year Global Expansion Adapting to the local culture & expansion into areas with large Indian Diaspora such as South Africa, Bahrain etc BUSINESS STRATEGY: FOCUS 2012-13

26. 4 P's Description FabIndia is India's largest private platform for products that are made from traditional techniques, skills and hand-based processes. IT offers has a huge portfolio of products. Its merchandise offers an assortment of grocery products as well as a wide variety of other goods. Fabindia's products are natural, cr af t based, contemporary, and affordable Today, Fabindia has 141 retail stores across India and 1 store each in Dubai, Nepal and Italy. Fabindia has decided not to expand through the franchisee route in the domestic market as it feels that it will dilute the brand FabIndia does not offer discounts or sale on its products However, after the launch of high ticket items such as furniture, it offers easy EMI options The company never advertises aggressively but makes people talk about the product and shopping experience PRODUCT PLACE PRICE PROMOTION

27. Existing Markets New Markets BRAND STRATEGY A delighted Customer is our Best Brand Ambassador” USP : quality of the fabric and the cultivated image of ‘Indianness’ Does not follow any customer acquisition strategy: focuses on customer retention Key element: word of mouth publicity ( Zero advertising except print ads during promotions ), advertorials, mobile marketing, in-store posters Mystery Shopper Program: to check the customer satisfaction level Motivating factor for the customer: quality and consistency of product and the service Over 83% of Fabindia’ s customers go back satisfied, with 58% being highly satisfied with the brand and its offerings SOURCE: Interview of Mr. William Bissel, MD, Fabindia published in The Economic Times, Jun 2011

28. Objective Help FabIndia in retaining customers by building lasting relationships and improving loyalty, and acquiring new customers Rationale Capitalize the potential to expand the TG from 25 + to 18+ FabIndia does not advertise, depends on word of mouth. This essence will be continued with the social media campaign as well Take advantage of the perfect overlap of FabIndia TG and the internet user profile, 18-35 years Created fully fledged retail market online First mover advantage in their segment  Connect with the customer to customize Brand managers at Fabindia use a concept of intuition: creating a complete look based on a single design -> this to form the ethos of the 3D online trial room

29. Big Idea Strategy Expand average basket size of TG which coincides with internet TG- 18-35 Promotion optimization Convenient country specific format Online space- for more visible Online marketplace – integrated into operations Aspiration value- though long term membership benefits Increase preference n brand recall in foreign countries n NRIs Lock in % of wallet as Indians increasingly shop online Tactics Launch online activities with the Summer collection Online Trial Room: mix n match clothes and design a new look on a 3D simulated trialroom w/ a model as per physical specification Micro site Social sites High search ranking: Google Adwords SEO n SEM Exhibition + workshops on ground Diwali – make ur own gift bag for your family/friend – buy them a new look and get it home delivered ! CSR weekend promotion: showcase craftsmen and tie up with Breakthrough

30. COMPETITORS Competition faced by fabindia is from both the o rganised and the unorganised retail sector . UNORGANISED SECTORS- 1.LOCAL NGO'S 2.DELHI HAAT 3.LAW GARDEN ORGANISED SECTORS- 1.GARMENT BASED - A. SHOPPERS STOP B.WESTSIDE C.RELIANCE TRENDS D.GLOBUS 2.DESGNER BOUTIQUE

31. Fab India: 2010 Revamping website Launch summer collection Create an e-market place Link online sales to supply chain Build social media presence On ground promotions to complement e-campaign 60 th year anniversary Early 80’s

32. Revamp Website Observation >Clean web 2.0 site >Allows for basic online sales >Poor search engine ranking to keywords such as “Indian” and “ethnic” >@fabindianews twitter handle for promotional offers Action >>Redesign website for Web 3.0 >>Navigation on the site to be interactive >>Website to also act as knowledge director to reputed resources on Indian culture, fabrics etc. >> Linked to the operations database and supply/delivery chain >>Create WAP site for mobile browsers >>Integrate Woopra for site analytics and connecting with website visitor real time >>Create activity on other social media platforms to drive traffic to website

33. ONLINE CAMPAIGN Revamping the Website : A micro site with the new biometrics application will be added to the website. The micro site will have the biometrics feature which allows users to customize their own designs as well as selecting fabric and colours. It would also allow the user to have customizing fits. Users can then do an online payment and their apparel would be shipped to their mailing address. The micro site would be linked to the national supply chain data and regularly updated. This will make the online process centralized and will enable FabIndia meet the demands of the consumer irrespective of the location. Website will serve as the landing page for all online marketing initiatives. Website would also carry links to pages on various social networking sites. Social Media Initiatives: The main aim of the social media initiatives would be: Increase traffic to the revamped website of FabIndia Informing and familiarizing the users with the biometrics application feature on the microsite of FabIndia Network with users to reach out to more and more consumers Inform the users about the Culture & Crafts’ Fest Inform and educate the consumers about the 50 th Year CSR initiative of FabIndia and engage them to be contribute towards the cause

34. ONLINE CAMPAIGN CONT… Facebook: Start a fan page and provide regular updates on changes happening in FabIndia Develop a gaming application similar to the biometrics application on FabIndia website and share it with fans. This would generate a word of mouth publicity for the application as well as familiarize the users with the application. Upload photos of new stores, new fabrics, new designs etc. and events organized by FabIndia Upload videos of cultural events etc. Twitter: Microblog about new changes in the brand FabIndia and its online initiatives Regular tweets about the new biometrics application Engage into conversations with consumers (provide solutions to issues they face etc.) Tweets about upcoming ground activities Tweets about the 50 th year CSR initiative Youtube: Upload viral video for the CSR initiative to involve more and more users to support the cause Online Events websites (Buzz in town etc.) The onground activities in the metros would be mentioned on online events sites etc.

35. ONLINE CAMPAIGN CONT… 3) E-mailer: An e-mailer would be designed to be sent out to the database of customers about the new online biometrics application which they can use for online purchase The e-mailer will also be used for informing customers about upcoming summer collection, events etc. Customers will also be encouraged to support FabIndia’s 50 th Year CSR initiative Adwords : The focus will be on SEO to increase search engine rankings for the FabIndia website Purchase keywords: ethnic indian wear, retail, cultural, indian wear, kurtas , customized design etc.