In its endeavor to cater to the growing demand of Indian Art and Craft products, Sanskriti Objects dâ€™art offers merchandise inspired by the rich and exclusive Heritage of Rajasthani art forms. The company has developed franchise route for retailing its
Sanskriti Objects d’art is into manufacturing and export of ethnic Rajasthani Jewelery and handicrafts employing traditional art forms. It’s business model is based on socio-economic values and offers sustainable business opportunity for Rajasthani artisans and craftsmen. The company is not only preserving age old traditional art forms of the region but also bringing innovation in its product offerings to meet the modern consumer preferences and broaden its market scope. Now, to achieve scalability the company has rolled out its growth plans via franchising and aspires to take its brand to the global platform with continual expansion in India. This case study discusses brand’s niche retail business and dynamics of its franchise growth model.
Products and its USP
There are three categories for Sanskriti products namely Ethnic Jewelry (comprising Thewa and Meenakari Jewelry), Home Decor and Corporate Gifting. Home Decor and Corporate gifting segments comprise products manufactured from Marble, Gemstones, Handmade Paper and brass. The specialty of the brand lies in its Thewa Jewerly which is a 400 years old Rajasthani art and Meenakari Jewelry, another ancient jewelry making form. The brand has product line of Thewa-Kundan and Thewa-Diamond jewelry to cater to newer market.
Driven by constant product improvement in terms of style and designs, the company offers reasonably prices products for niche clientele.
Statistically speaking, the overall organised retail sales in India are reported to be of US $400 billion and specialty retail segment captures nearly half of this market, out of which the kind of industry, Sanskriti operates in, has five to seven per cent of market share. As consumers are becoming trendy and brand conscious, there is huge scope for the branded jewelry and other handicrafts. Modernised ancient art forms find wider appeal among consumers today. Therefore, people’s growing interest in fashion and business’s thriving corporate culture and sophistication has created a large market for this industry in Metro and Mini Metro cities of India along with tier I and Tier II locations such as Ludhiana, Kochi, Coimbatore, Jaipur, Surat, Kolhapur and Udaipur.
Sanskriti has opted for franchise model for expansion recently as it would like to extend its reach in the country as well as globally by efficiently utilising its financial and other resources and grow rapidly through it. Sharing the franchising plans of the company, Nitesh Kataria, CEO of the company says, “As we have taken franchise route recently, number of franchisee is very low - eight only. Most of the franchisees are operating from residential outlet. However to take our business to next level, we are targeting 100 franchisee in next two years. We would like to have our franchisees in UAE, USA, Singapore, UK, Canada and Thailand. We intend to target Indian Diasporas to promote our range of products. We would like to make Sanskriti Objects d’art one of the respected brands in Indian arts and crafts arena. Looking at market size and opportunities present in the handicrafts sector, our conservative target is to achieve a sales turnover of 10 Million USD, in the next five years. We would also like to have 200 franchisees over a period of five years.”
For selling its products, the company has an online portal and retail outlets. The retail franchise formats of Sanskriti include:
Home based outlet: The franchisees can single handedly operate company’s retail outlet from his/her residential premises and the initial capital outlay required would be Rs two to three lakh approximately. The franchisee is expected to achieve break even within 12 months of launching the business and can expect 35 to 40 per cent of return on investment.
Specialty Outlet: In case of specialty outlet that can be opened in Metro/Mini Metro or small cities the initial investment in terms of area and capital would be 300 to 400 sq.ft and Rs six to seven lakh respectively. Also, for managing these franchise locations, manpower of two or three would be required. Statistics for the break even period and ROI are 18 to 24 months and 30 to 32 per cent respectively.
And from legal point of view, the terms of the franchisee contract include disclosures such as: Nature and Name of the activity being franchised, franchisee fees, assigned territory and rights granted to the franchisee, manuals, product pricing and discount structure. It also includes clauses for cancellation of the franchise contract and the legal rights and duties of both the parties and also related statutory laws as applicable and enforceable.
As the consumer segment for company’s products are essentially females, the ideal franchisee for the company would be women entrepreneurs. The company expects to benefit from women managed franchisee businesses catering to women consumer market on account of former’s better rapport with their clients and deeper understanding of the consumer tastes, preferences and behavior. Believing that young women entrepreneurs would be able to bring in more value to their business, Sanskriti is seeking self driven, financially strong and skillful business partners. And the company is also open to other spirited entrepreneurs who would like to partner with it.
Marketing and training mechanism
The company spends about five to seven per cent of its sales revenue towards brand promotion and marketing. It employs marketing tools like Trade Shows and Exhibitions, Internet Marketing, E-mail and Newsletters (targeted at corporate clients), advertisement in Print Media.
To its franchisees and its employees, the company provides training related to sales and marketing, product, planning inventory, demand forecast, social media marketing. Also, directives for outlets design including store interiors and layout, product display, signage are provided. Additionally the franchisee has access to product catalogs, brochures, leaflets and other publicity material for promoting the brand.
The biggest challenge the company has to face is that it is operating in a highly unorganised industry despite of increased demand of Indian Handicrafts Products in domestically and globally. Also, the artisans and craftsmen require bringing in innovation and contemporary look to designs to enhance the business and profitability and find wider consumer base. Other hurdles include assessing the market scope, efficient supply chain mechanism, drawing right pricing policy, high real estate costs and paucity of skilled manpower.
Commenting upon the challenges expected for establishing the Sanskriti’s franchise model, Kataria, says, “Like any other business model, franchise model has also got its share of challenges. Biggest challenge is selecting right kind of people as franchisee. We need to have franchisee that are motivated, passionate and focused, because building a business is long process and requires patience. Maintaining brand value and business practices are other challenges as franchisee may not adhere to company’s guidelines all the times. To overcome these challenges we are conducting training programs related to ethical business practices, value proposition and branding for the franchisee.”
To conclude, Sanskriti Objects d'art seems to be a lucrative entrepreneurial opportunity for potential franchisees, especially women entrepreneurs. Company’s wide range of products and different retail formats including low cost investment opportunity offers ample business opportunity in women consumer segment and corporate segment in India and internationally.