India can ensure that it remains competitive in the global market through focused growth in the sector.
With Fibre2Fashion Correspondent Cindrella Thawani, Dipali Goenka shares her views on the sourcing destinations as well as rising costs, which are some of the biggest challenges.
Synopsis:
Welspun Global Brands Ltd. (WGBL) was formed after the demerger of Welspun India Ltd into two separate companies. The demerger was announced in September 2008 and WGBL was formally launched in March 2009.
WGBL is exclusively responsible for the sales and marketing division of the home textile business of Welspun.
Dipali Goenka caters as the Managing Director of WGBL. Additionally, she has initiated the set up of Welspun Vidyamandir High School and Welspun Anganwadi in Anjar, Gujarat.
Besides, Dipali embarked upon the ‘Women’s Empowerment Initiative’ through the Young FICCI Ladies Organization (YFLO) Mumbai Chapter, since its inception in 2005 till March 2007.
Moreover, she is graduate in Psychology with a brief stint at Harvard, under her belt.
Excerpts:
Besides, what is your outlook on the instability of weather, which is toting up hardship to the retailers?
Weather can have a strong impact on business and retail. It impacts farm output and may also impact purchasing power. Additionally, retail is impacted by reduced footfalls and during extreme weathers leading to slower sales.
As business people, we cannot control the vagaries of nature but have to be prepared for them. The best way to deal with them is to be prepared such that you pare your losses if there is bad weather and be able to maximize gains during higher footfalls.
What are those steps that you have undertaken to safeguard the green belt?
We carry out plantation on regular basis in our plants and in neighbouring villages, such as rain water harvesting system in Anjar plant. In Anjar, a total of 800 million rain water was harvested in year 2010 and 1100 million litre of rain water was harvested in year 2011. New rain water infrastructure is commissioned time to time to harvest maximum rain water.
How has economic slowdown impacted your business? Which steps you are following to improve sales?
The economic slowdown has impacted most businesses including ours. Our biggest challenge has been the rising costs coupled with a slowdown in demand and greater price sensitivity than before. Our initiatives for improving sales include developing new and innovative products that can offer better pricing at lower costs.
How do you see growth opportunities globally in coming period of time?
The growth opportunities have been a little slow to come by. In the coming period of time, though, we expect the growth opportunities to come from markets like Russia, South Africa, Canada, Brazil, etc. We continue to see US as our key market as well as working towards leveraging our position there. Europe remains a challenge in the near term.
What are your further expansion plans in domestic and international markets?
We are looking at expanding slowly in both markets. We are seeing a glut in capacities in the bath segment. Bedding segment is also seeing some increase in capacities. Internationally, we are focused on growing in non-US markets.
Inflation, considerably, is the principal challenge for Indian economy. How far it is impacting the textile segment?
Inflation has had a very big impact on overall costs. The costs across the board have gone up. Labor and other input costs are up on average between 10-15 percent. The power costs are also up by 10-15 percent.
Overall, the production costs are now higher than before. Though, we see some reduction in cotton prices, any benefits that may have accrued are nullified through the higher labor costs.
In which regions your home textile brand caters in domestic as well as international market? Moreover, where do you trade with your surplus stock? Besides, can wholesalers trade with your surplus stock?
We are a bed and bath linen company and currently we focus on this. With regards to our surplus stock, we sell most of them through our factory outlets in India or to other places open to buy export surplus. However, this is only done after the customer whose surplus we are selling has approved of the buyer.
Moreover, where do you see export market is faring globally?
It is difficult to predict how the trends will pan out but we are watching the market very closely.
How do you see the future of home textiles as many international players are vying over the growing regions?
Like any business, there will be a growth and then a period of consolidation. The players who have a strong business model and can differentiation as well as also evolve with time will survive. However, the market remains huge, hence, immediately, we see this market being able to accommodate the number of players it currently has.
India is becoming an expensive sourcing destination. How far it will impact its exports?
While, costs are rising in India, primarily driven by labor and inflation, and it is also increasing in other countries like China. The competition is now from other locations like Vietnam, Pakistan, Bangladesh, Myanmar, Brazil, etc.
As one of the largest cotton producing nations of the world, India will remain competitive in the cotton textile space. India can ensure that it remains competitive in the global market through focused growth in the sector.
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