An evolving lifestyle, more intense brand-consciousness, and an urge to adopt from the West while sticking to an indigenous culture, are a few elements that capture the essence of the Indian consumer. Hardly surprisingly, many conglomerates are pampering her with new or established foreign brands – and offering products that are contemporary and yet ethnic in terms of their design, colour, or utility.
The $700 million Gujarat Heavy Chemicals Ltd (GHCL), one of the leaders in chemicals, textiles and information technology outsourcing, is one such company, which, in an effort to interact directly with the consumer, had entered the business of retail in 2006.
In June 2006, the company acquired the UK-based Rosebys, a home fashion retailer, and is now planning to make the retail brand available to the Indian consumer. What are the company’s plans for the country? What new has it on offer? What will be its retailing strategy? Sanjay Dalmia, chairman, GHCL, along with Nikhil Sen, who heads the company’s strategy and international business, share some untold/lesser-known facts with Ranjan Kaplish and Satrajit Sen.
Sanjay Dalmia, chairman, GHCL
Rosebys in India
Q: GHCL operates Rosebys in the United Kingdom and now plans to launch it in India. What are the retail lessons learnt abroad and how will these help in India operations?
Dalmia: GHCL made its foray into retail one-and-a-half years ago by acquiring Rosebys, one of the leading home fashion retailers in the United Kingdom. Now we’ll introduce the brand in India, though with a new strategy. This strategy will help us achieve a quantum jump in the market. Through our Rosebys experience, we learnt that there are only two ways of growth in the business – either you follow the linear way of growth or you go for a quantum jump. We are not interested in linear growth. For a quantum jump, we have devised an absolutely new model, which the home décor market in the country has not yet seen.
Sen: The model that we’ve opted for is in sync with consumption patterns in the country. There is a huge difference between Indian consumers and their counterparts in the United Kingdom. This particular model will help us cater to each consumer according to his or her needs. We will have products that exclusively correspond to the particular locality.
Dalmia: To make sure that the consumer gets a good deal in terms of product and pricing, we’ve devised a simple model. We will adopt the franchise route and not have any company-owned outlets. Our franchisees will offer us their enterprise and, in return, we will provide them with products that will be procured through global sourcing. In this way, we are bringing in international products coupled with price competitiveness. This will be a win-win situation for us and the retailer
Q: Is the franchise model the safest? Any specific reasons for not opening company-owned outlets?
Dalmia: The reason is quite obvious. The entrepreneur who is running his own store will have a different approach as compared to a store manager appointed by the company. You cannot make your store manager as enterprising as the owner. The Rosebys franchisee will operate like an owner and perform better for that reason, in terms of providing better services and value for customers’ money. Besides, small Indian retailers have a great knack for selling goods and we would leverage that to take our retail venture to every nook and corner of India.
We will design all our franchisee stores. All our stores will look alike – not same, but similar.
Sen: We already have an operational store format in the United Kingdom, and we will be introducing that to India. We will follow the same design format wherever we open. It’s a kind of box format. We have the designs, we have the elements; all that we have to do is customise the same according to size.
Dalmia: We are retailing different private labels at Rosebys in the United Kingdom. We might bring those labels here. Besides, for the Indian market, we are building such labels that will primarily focus on design. Our design will speak for our brand. In fact, our design will become our brand. Our motto is to provide our customers a global design at competitive price.
Q: What, according to you, does ‘competitive price’ mean? Who is your target customer?
Dalmia: All over the world, retailers offer three price variants that include good, better and best. We, too, will do the same. We are not going to deprive a customer, but act according to his or her spending capability. One must find products of all price ranges in our shop.
Sen: We have done a detailed research on the Indian market and realise that India caters to a huge segment of customers who want value-added products. We have also seen a gap in the market as there is no premium brand present in this category. Indian retailers have not been able to address this gap, but we will. In India, the home décor market has the world’s biggest brand disassociation. Consumers today are more aware of apparel brands; they hardly find renowned labels in the home fashion category. Rosebys is one such brand that is required in the country, and, hopefully, we will develop a brand recall value. The branding of home fashion is where we want to cash in as a retailer.
Nikhil Sen, head, strategy and international business, GHCL
Q: Unique designs, you say, are your USP. Where’s that uniqueness in design coming from? India, of course, is a design hub with many cultures, arts and creative artisans across states. Will Rosebys find and retail creations of Indian artisans? Don’t you think that’ll benefit both the company and the artisan?
Dalmia: India has a great and expansive cultural heritage, and each region has its own unique design culture. We will have designs that will be sourced from each and every part of the country, and create a lifestyle home décor brand out of them. We are building a global design team. Presently, we have design teams in three countries, and will have more people joining the global band of designers. The team will also source works of Indian traditional craftsmen and artisans to sell in our stores. This will add value to their work and to our store.
Sen: We will definitely have Indian designs in our stores. We already retail an Indian collection called Ashiana, a popular private label, which is the highest-selling collection in the lifestyle segment at Rosebys in the United Kingdom.
Competition in the marke
Q: Great store and exclusive designs and products, but how will the customer know about Rosebys? What is your strategy to generate more footfalls in the store?
Sen: In India, there is a lack of shopping environment in this segment. Consumers go to stores just to buy their necessities, and want to be out as soon as they finish buying. This mindset is very weak. We are looking to change this environment by moulding the mindset of the customer. We have devised particular strategies to create brand value in the minds of the consumers. We have followed this particular model in the United Kingdom and have succeeded immensely. We are going to develop the stores in such a way that consumers will feel a need to visit the stores regularly. But, as of now, we cannot discuss the entire strategy.
Dalmia: There is great competition in the market. Any retailer who is selling well will be our competitor. It might be an organised chain or a small, standalone shop. That said, our ultimate competitor is going to be decided by the consumer. If 50 consumers come to my shop and 50 others go to another shop, then there is competition. But if the ratio is 90:10, with the majority on our side, then there is no competition. Having said all that, we still believe that within two years’ time, Rosebys will be the market leaders.