Gunjan Shah, MD & CEO, Bata India, says: “We have just started the first Power EBO, but we are very clear this is a long-term investment for us. We feel that this is something that can succeed. Our proposition is very clear, we want to bring in global technology in a democratic manner, make sure that we are able to reach a much wider audience and consumers and make it accessible for them and through the Power EBO. ”
Could you elaborate on the strategic decision that you have taken to launch the exclusive brand outlets for your athleisure brand Power? What is the growth trajectory here? Why are you going through this particular channel?
Gunjan Shah: Globally, athleisure is a space that has been exploding in terms of consumer preference and Power is our lead brand on it. It is the second largest brand in Bata’s portfolio. While Power is an international brand, present across almost 25-30 countries, it has got a strong heritage, the R&D is completely centred in Canada. The designs as well as technology comes from the R&D centre but so far it was being sold under the Bata banner and we felt this is the right time to bring the brand out directly to consumers through our Power banner and that endeavour has started with the opening of the first store in Noida.Tell us about your expansion plans for the EBOs and revenue expected from this initiative which you are taking?
Gunjan Shah: We have just started the first one, but we are very clear this is a long-term investment for us. We feel that this is something that can succeed. Our proposition is very clear, we want to bring in global technology in a democratic manner, make sure that we are able to reach a much wider audience and consumers and make it accessible for them and through the Power EBO. We plan to make sure that we are able to showcase the entire range not only in footwear but also in apparel and the exclusive brand outlet under power banner will allow us an opportunity on that. As of now, our plans is to make sure that we are not going to stop at just one store. In the next 18 months, we plan to have at least about 50 stores across the country.
What about the revenue potential that you are envisaging from this Power brand? What is it right now at and where do you see it scaling up in the next couple of years?
Gunjan Shah: I will not be able to share specifics, but as I said it is the second largest portfolio in our brand and in our banner and that tells you the kind of size that is already there. Overall our turnovers are nudging towards Rs 4,000 crore and Power is a very large contributor to it. We want to propel the growth of this brand and therefore our participation in the athleisure category through the EBO initiative.
Regarding your partnership with the global fashion brand ABG Nine West, what is the growth revenue addition which is expected from there?
Gunjan Shah: Nine West is a very large strategic initiative in making sure that Bata as a portfolio becomes the hub for innovation and style and Nine West is a globally recognised brand with consumer retail sales exceeding a billion dollars and we feel that the heritage of both design as well as associated features and the kind of ethos that Nine West brings in in terms of youthful premium, trendy fashion that will add significant value to our consumer offering and that initiative is in addition to the one that we are doing through Power which is to target basically the athleisure segment.
What is your take regarding this entire premiumisation wave, we are seeing this across product lines, across various segments, is that true for you as well and any pickup in the mass segment at all?
Gunjan Shah: The Indian economy is obviously growing. It has been growing for the last several decades even faster and we are expecting that to only propel going forward. Now what that also means is basically the consumers are going up the ladder in terms of their disposable incomes.
What is also happening along with this is that consumers because of digitisation, because of mobile access and therefore internet access there and social media is getting exposed to basically the best in the world and how do we make sure that Bata as the lead footwear retailer in India brings across these best offerings to these consumers, meeting their aspirations and making sure that products are accessible through a wide network of almost 2000 plus EBO and multi-brand outlets and digital commerce. Our endeavour is to drive this entire premiumisation in an accessible as well as value for money offerings.
Premiumising customer experience at all touch points what are your thoughts there? What is Bata’s strategy both online as well as offline?
Gunjan Shah: Basically there are multiple levers to this. At the heart of our business model is basically the product and how do we make sure that we are able to continuously offer on-trend styles across our range, bring in freshness and newness to consumers whenever they walk in and therefore making sure that we are able to also bring across accessibility in terms of best-in-class technologies at all price points is our endeavour from a product point of view.
In addition to this, because of premiumisation there is a large part of Bharat which is basically becoming more and more aspirational. Making sure that our products are available in the right kind of a retail experience is going to be a large part of our expansion strategy. A big part of this entire thing has been the success that we have achieved through the franchise EBO channel and we have already crossed a massive milestone of 500 EBO franchise stores and we see that there is enough runway for the next about three to five years to even double this entire network.
As India as well as Bharat premiumises, we should be able to meet their aspirations successfully with our offerings. In conjunction to this, there will be two other areas; one is digital commerce through marketplaces through our own D2C website as well as through our omni-channel initiative which has met some significant success. It has been the fastest growing business revenue for the last several years and we expect that to continue going forward to make sure that even places where we are not able to reach with our EBOs as well as MBOs, we are able to access through the e-commerce business channel.
Last but not the least is investment behind the brand and brand equity. Our endeavour and focus will be this year and going forward to invest in Bata as a brand and now there will be also a large impetus towards Power as a brand, clubbed along with the initiative that we have on the EBO that we have just launched.
What is the demand trend you are seeing in the tier II, III, IV cities now?
Gunjan Shah: Medium term we are very optimistic. We are looking forward to formalisation of retail and therefore benefits coming through to us both through the Bata banner as well as we expansion through other brands of ours and their customised offerings are going to be critical in terms of how we leverage this entire demand trend that we expect over the medium term.
