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Be it beautifying the kitchen with branded appliances and cookware or having fascinating floorings, modern India is all set to give them all a try. The retail journey promises to be challenging for both the old and new entrants in these sectors.
Cookware and kitchen appliances segment is estimated to be around Rs 3,800 crore in India. Though cookware and kitchen appliances have long been retailed through multi-brand outlets, brands like TTK Prestige, Timbor and Ceilo took the franchise route to offer not just the products but a complete experience to their customers. Another related segment is wood floor industry in India, which is pegged at around Rs 600 crore. Though this industry is primarily unorganised, players like Ego Flooring aim at providing a branded appeal to the customers.
Offers & supply chain
TTK Prestige offers a complete range of pressure cookers, cookware and kitchen appliances. The company has an exclusive network of depot and warehouses across the country, out of which it supplies its products to the franchisees.
Ego Flooring offers wooden flooring, office seating solutions and wall coverings, which have a collection of over 500 designs and international tie-ups with leading brands in Sweden, USA, Germany and France. Ego is currently sourcing from 11 countries around the globe for all the three products. The company has a centralised warehouse in Bhiwandi (Mumbai). The company only sells through its distributors. All stock after reaching the warehouse is then supplied to the respective distributors for that region. The distributors stock the material and all the franchise stores and dealers are fed by the distributors.
Speciality retail comes as an exciting opportunity, especially in emerging India, which has given way to style and aesthetics, besides utility. Since no multi-brand outlet can showcase the complete range of their products, TTK Prestige chose to expand through the franchise route. Explaining why the franchise opportunity of his brand is really exciting, Chandru Karlo, Senior VP, Sales and Marketing, TTK Prestige says, “Our franchise costs only Rs 10 lakh to the franchisees against which he receives high returns, i.e., 35-40 per cent and reaches break even in about less than a year.”
TTK Prestige plans to add 75 more stores to its existing 222 franchisees in this fiscal. The area requirements for the store may vary from 400 to 600 sq. ft Ego Flooring aims at opening 50 more franchise by 2010. The company offers two formats to its franchisees. The smaller format requires an area of 500 sq.ft, the investment for which is Rs 15 lakh and the bigger format requires an area of 2,000-3,000 sq.ft with an investment of Rs 25 lakh. The investment would include fee against stock, deposit fee and interiors of the showroom. Advocating franchise route for expansion, Amish Dani, CEO, Ego Flooring, avers, “Franchising has helped us in a pan India presence of the Ego brand with the products becoming more accessible to the end consumer. The company can now ensure after sales service and customer satisfaction.”
Visual merchandising boosts sale
The visual merchandising of a retail store is extremely important as it determines sales to a great extent. TTK Prestige gives a lot of stress on the look and feel of its stores and ensures that the customer gets same look and feel of the brand whether he visits the store in Delhi or Kanyakumari. Ego follows a fixed format for the look of all its stores and the branding is changed at regular intervals.
Training for franchisees
TTK Prestige conducts two training schedules in a quarter to provide training to the staff of its franchisees, whereby they maintain standards regarding visuals, customer dealing, furniture, after-sale services, etc. The company also carries promotional activities both at regional and national levels. The company also conducts franchise audits twice a year to ensure that complete hygiene is kept across the system. In case some franchisee faces problem in generating footfalls, he is assisted in carrying local marketing initiatives to attract the target customers.
Ego Flooring has almost three to four promotional schemes in a year to boost the sales of the product as well as the morale of the franchisees. The schemes include discount offers, lucky draw, free installation, target achievement schemes etc. Ego as a company is fully involved in scouting of the showroom areas as well as negotiating the rentals for the franchise locations as ROI for the franchisees depends heavily on rentals. Besides the Ego brand goodwill, the franchisee will receive all sales, promotional and branding materials for the stores. The company has appointed a dedicated sales and installation team for each area. Ego also offers warranty and after-sales service, depending on the product category.
Challenges for retailers
Speciality retail, too, poses some challenges before the retailers which may be in terms of marketing initiatives, supply chain, disposing the old stock or generating footfalls. Highlighting on the challenges of running a speciality store, Carlo avers, “The biggest challenge of running a speciality store is getting optimum number of footfalls. Once footfall happens, they automatically get converted into sales.”
Whatever be the challenges, the kitchenware and flooring market has ample scope in the times to come, as India is on its way to exploit these concepts.