Prospects and growth strategy for Home Textile brands through Hyper Markets

Retail Industry: An opportunity.. Background - US retail is organized to the extent of 80%, while the share of organized retail in Western Europe is about 70%. Share of organized retail in countries like Malaysia, Thailand, Brazil, Argentina, Philippines is between 30- 50%. However, share of organized retail in India is about 3% and is still at a nascent stage. Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. This brings a point that there lies an opportunity for retail to get more organize and grow at a faster pace.

Emerging trends.. Growing urbanization leading to a variety of customer needs. Significant increase in the number of brands in the Indian market leading to a larger option set for the Indian customer. Media boom leading to an increased level of awareness and exposure to the international trends and concepts. Changing demographics propelling the growth of retail industry. There has been a shift from Hi-street shopping to malls or hypermarkets. Shopping is becoming an outing or a way of family entertainment that means that families now spend greater time in shops.

Broad understanding of retail formats Hyper markets Super markets Department stores Super Centres Speciality stores Shop –in –shop up to 40,000 sq ft up to 10,000 sq ft 50,000 sq ft – 100,000 sq ft 10,000 sq ft – 50,000 sq ft 500 sq ft – 3000 sq ft Approx. 500 sq ft Formats Size

What does a Hypermarket mean to us.. Hyper market is largely a function of product mix, assortment and size. Broadly, they are driven by the following - Store size – up to 40,000 sq ft Assortment - Food, Grocery, Basic Range of General Merchandise General Merchandise – Home, Apparel and Hardlines . Customers look for value/ deals or promotions. Store is managed by limited sales associates.

How brands can play an important role.. Brands have their own equity and so, help retailer in getting more footfall. Brands understand their products and domestic market well and can use their knowledge and market understanding to their advantage. Understanding of seasonality. Help in putting together “Home fashion concepts” and increase their sales volume. Consistent and focused approach.

Key Growth drivers for Home Textile brands…   Multiple drivers leading to a consumption boom: - Favorable demographics - Change in Family structure - Increasing population of women - Increase in buying power - Growth in Housing sector - Raising aspirations : Value added services.

Changing Paradigm SOLUTION END TO END Product Solution To Customer Buyer Positioning Price Fashion Textile

Home Textile - Category Mix MW-WMR048-20080701-119 Home Textile - Category Mix 2007 2010 Source – Technopak 9 9 9

Impulse Vs Planned Purchase – Home Textiles Source – Technopak

Replacement Cycle of Home Textile Products Bed Sheet – Double Bed Sheet- Single Face and Hand Towels Pillow Covers Less than one year Products Replacement Cycle Table Covers and Mats Bath Towels Curtains and Upholstery Quilts and Blankets Mattresses Carpets 1-3 years 1-2 years More than 5 years 2-4 years

Approach: Supplier - Retailer partnership Five Things Differentiate Manufacturers in the Eyes of Retailers – Retailers view leading manufacturers as those: Who are best aligned with their marketing plans and strategies; With whom they have highly productive and cohesive relationships; Who possess advanced shopper marketing competence; Who develop unique and exclusive programs; and Who can deliver powerful insights on the consumer and the shopper

Approach: Supplier - Retailer partnership “Build Private label program”   How does it help to retailer – Differentiate the products for retailer Enhance margins Retailer completely owns the property; so promote it How does it help to manufacturer – Commitment of retail space Limited but continuous volume production Enhance understanding of retail business

Understanding consumer needs.. - I want the best quality at the lowest prices. - I want to see the best range - I want to be treated special as I am a regular customer - I want everything under one roof. - I don’t want to travel very far to shop for my basic needs. - I shop at a store I can trust. (what does a customer want…)

How do we help customer in buying.. Wants - Good Quality Lowest prices Good product range Good service Brand Offers- Right assortment Product mix Price points No of SKUs In – stocks (availability) Good displays Brand promotions Retailer offers - Enhance shopping experience courteous sales associates Provide good ambience Value added services. Build loyalty Build store promotions

Winning Value Proposition Price positioning (lowest prices – value for money) Service (Assortment, availability, in-stocks, ambience, in-store assistance, home ideas) Product (Quality, range, differentiated range)

Points to ponder…..   Does customer get a feel that our products are affordable. How can I create more fun and excitement for the customers. Is she saving some money when buying from us How can I provide all Essentials with some value add-ons. Can we demonstrate some fashion or decorative concepts in the store so that customer can relate to.