V-Bazaar is one of the fastest growing value retail chains from Northern India. It started its operation in May 2016 with its maiden store in Lakhisarai, Bihar. The company was started by Hemant Agarwal and Rahul Jhunjhunwala.
In an interview with Indiaretailing, Chairman and Managing Director, Hemant Agarwal shares the secret recipe of success of the brand.
Here are the edited excerpts:-
Tell us about the history and profile of your company.
We have a rich experience of more than two decades in the value retailing business. Over the years we have developed very good relations with vendors from all over the country which helps us in procuring the right fashion product at marginally reasonable price.
Since my birth I have grown up seeing my father developing standalone retail store in Cuttack and getting actively involved in it. Then along with my family we started the retail group V-Mart in 2003. Finally I exit the company when the it had more than 110 stores to start V-Bazaar, a value retail chain.
‘Daam Kam Fashion Hardam’ is the main motto through which the company believes in providing the latest trends in fashion to the upwardly mobile Indians at the best possible price.
The brand primarily operates in Tier II and III cities, with a chain of value retail fashion stores offering apparels for men, women and kids, home furnishing, footwear and accessories catering to the entire family. Currently, V-Bazaar has 33 stores in northern India and in the states of U.P and Bihar.
Which are your most important markets in India?
Most of our stores are in Tier II and III cities of Uttar Pradesh and Bihar and we have been getting good response. We have our plans to expand in same area.
How many stores do you have in India? What is your average store size?
As on date we have 33 stores with an average size of 7,200 sq ft.
What is your market positioning and customer profile?
We are one of the fastest growing company in our segment. Our stores are performing good, we are getting good customer support.
Our customers are young aspirational class of the society, with good fashion sense. Till date we have had a total footfall of close to 10 million people.
What is your reach in terms of number of cities in India? Which other markets in India do you plan to target?
We are present in 29 cities till date. Our aim is to reach to common man of untapped cities.
What tech innovations have you introduced in store over the last few years?
We have the updated ERP software with best POS machines. We use various third party software for data accumulation and also for customer relations maintenance.
How has technology helped V-Bazaar in enhancing consumer experience? Have you seen any growth in sales revenue and footfalls due to in-store technology? Please elaborate with examples/ case studies.
Technology do have a marked effect in enhancing the consumer experience. As soon as someone buys a product from our store we have an automated system through which a greetings via SMS is sent to the customers mobile phones. The SMS also contains a link through which the customer can submit his/ her valuable feedback directly to us. This way we have been able to build a long lasting personal relation with the customers.
We do get many returning customers, due to some personalized offers that we share with particular customers on their birthdays/ anniversary.
What new tech are you planning on bringing in-store over the next few years?
We have a plan to set up an e-comerce platform where the inventory in a particular store would be shown to customers in the vicinity of the particular stores. Customer will be able to shop directly through the website.
Do you have a customer loyalty program? If yes, please walk us through it.
We have V-Bazaar Earning Club. By being a member of our loyalty program a customer can avail host of benefits through points accumulation on shopping as well as additional discounts, exclusive sale previews, surprise offers among others. We offer 20 points for each Rs 100 spent on shopping.
What is your marketing strategy? What impact does this have on your business? Elaborate with an example please.
We have round the year marketing activity planned through various media platforms covering both ATL and BTL activities. We spend about 2 percent of our revenue in marketing activities.
Marketing plays a very big role in our industry and at times we plan it well in advance whereas at times we take immediate steps according to the need of the hour.
For example our Mirzapur store was not meeting target levels, hence we did a robust marketing plan for the same store burning 3 months marketing budget in a single month and the store started meeting the sales target.
What is the location strategy for your stores – malls or high-street and why?
Most of our stores are in high-streets. Our customers are the middle and lower middle part of the retail pyramid. In these cities our loyal customers consider us as mall in itself. The stores in high-street has more visibility than the stores in mall, hence, it’s much easier to get an identity there.
What is the price range of your products? Which price band is the most popular with customers?
We have more than 60,000 variety of styles in a single store and our range starts from Rs 80 and goes up till Rs 4,000. The most popular products are the value products ranging from Rs 80-200.
How big is the market for your products in India and what is the y-o-y growth rate?
India is a very big market as far as fashion is concerned. For same store, we have a y-o-y growth rate of 13 percent and a CAGR of more than 50 percent.
You had said last year that you are planning on hitting the Rs 500 crore revenue target soon. How far have you reached in as far as these plans go?
By the financial year 2019-20, we would be hitting the Rs 500 crore revenue target. By the end of 2018-19, we have a target of Rs 303 crore with 53 stores across northern India. By the end of 2020 March we would be having 77 stores majorly in U.P., Bihar and expanding in some part of Jharkhand, Orissa, West Bengal, Assam, Madhya Pradesh among others.
By 2020-21 we have a projection of 107 stores and 132 in the successive year. By 2022-23 we would be having 160 stores pan India.
Do you plan on venturing abroad?
We may plan of venturing abroad after financial year 2020-21. We have a huge consumer base in Indian market, we want to reach to maximum number of cities in India first.