When and how far are we from consumer demand coming back?
There is a concern which we are witnessing for the last four-five months post Diwali and we are seeing some liquidity crunch in the markets for small business houses or businessmen or people who are running shops also. So, there is some concern but we have been able to pull up some sales whenever we have brought in some good schemes which have attracted consumers.
What we have done literally is sometimes we have been able to even pull in the sales of the competitors but the overall market scenario looks a little grim and there is a concern there. If the monsoon pans out to be good, the festival season should be very good and we should be able to see consumer demand coming back in festival season. In these two months, we should not be expecting a huge growth from the market. Normally these are dull times for us but we should expect a better festival season. We are targeting and planning and forecasting a good festival this year.
You have told us the overall strategy. Let us understand now the new found focus on the latest trends. How are you going to achieve the desired reduction in the mind to market days from 150 to 90 or 120?
We are more in fashion business and the customers now are being very much aware about what is the fashion trend in the markets of Milan, Paris, Rome and what the stars are wearing. As the millennials are becoming much more impatient, we need to offer them products at a much faster pace than what we had been doing. That is what we have been planning to do and what we have been focussing on.
We do not create fashion. We copy and replicate fashion. So, we need to be much more agile in that process.
We are focussing on trying to bring in the understanding of the knowledge which will help our buyers and merchandisers to create those kind of products and also align with the vendor base so that we can speed up those manufacturing processes and supply chain processes from our warehouses to stores at a little faster pace.
You are planning to triple your sales in the next three to four years. What is your growth strategy? Where you do see this kind of high growth opportunity?
We have been largely in tier 2, tier 3 towns. We experimented with tier 4 last year and we have not seen any great results there. But we would want to explore more of those but right now, we still focus more on tier 2 and tier 3 in the existing states where we are operating and some newer states that we had just penetrated last year like the north eastern part of India and some parts of eastern India.
We will penetrate more on those states and also in the existing states. We will move a little more south in the next two to three years. That is how our plans are. We will be opening 50 or more stores this year and grow those numbers in the consecutive years.
We would also be targeting a good amount of same stores sales growth where we see a large number of opportunities. which is left in the market where we are operating where we can also pull in more like to like sales in the coming years so that is what our plans are to try and triple our sales in the next three to four years.
You have a benchmark with regards to your same-store sales growth. How much are you planning to achieve?
We have been always feeling that 7% to 8% sales should come in from like to like category but in the last five-seven years, we have achieved those at an average basis, but last one year we have not done that. This year also we may have a little struggle looking at the market conditions.
We see a large amount of opportunity as a large amount of per capita income growth is expected, Our government is talking about $5-trillion economy target and that is going to fuel consumption. We should be able to capture it in our same store sales growth.
I applaud the fact that you have set a very big target and a vision to triple your sales, but the challenges also have increased.
As the opportunities are increasing, there are more players entering the fray to avail of those opportunities. We should also be doing it because we are the pioneers of these markets and we have been doing it for years. I understand that the Reliances of the world and Futures of the world or even the Pantaloons of the world are trying to cater to a similar market and bringing in new formats whether online or offline. There are people who are trying to come in and that is why we are also very bullish on that. If people, who have never been to these markets and if people who have been mostly urban centric, are now trying to be in little mid-market or semi-urban centric markets and if they are able to succeed, why not V-Mart? That is how we have challenged ourselves and taken a little aggressive target.
We did not go for these bullish approach in the last three to four years because we wanted to stabilise our organisation structure, we want to stabilise our processes, technology and now we feel that we have done enough of that, we should now push our paddle a little more stronger and try to take that path. We understand there will be challenges on real estate, there will be challenges on finances, there may be some challenges on people or even marketing conditions, but that is the way it is going to be and we are very confident that as we know the markets and the consumers better, our ability to deliver those products to those consumers at those values is going to be the best. So let us go for it.