Arvind targets rural markets with new business model

24 Dec '09

5 min read

Next we asked him to reveal the strategies to be as successful as Hindustan lever, to which he said, “The first challenge is for Arvind to be able to offer fabrics in a form that is easy to distribute and afford in rural markets and to be able to take on this challenge, Arvind has launched a new method of selling shirts in single shirt-length packs rather than the traditional rolls and by reducing the basic unit of selling fabric, Arvind can now offer much more variety to the retailers at a much lower risk, like in the case of shampoo sachets, which radically reduced the price to the consumer and increased the ease of distribution, so too, the pack business, can penetrate the remotest of geographies.

“The second biggest challenge for Arvind is to have a distribution network that is deep and can service smaller areas as rather than the typical 300-400 retailers per state, Arvind would hope to have at least 1,000-1,500 points-of-sale per state, which will also help in penetrating the smaller towns as well and this will require us to strengthen and expand our existing distribution network.

“The final challenge is to market ourselves to our consumer segments and towards that end, Arvind has launched its new "Arvind- Intellifabrix" campaign across the country to convey our innovations and new product offerings, which will be rolled out at a national level, once our distribution network is put in place and through our marketing campaign, we hope to attract new segments such as the youth, towards our fabric business.

When asked about the risks involved in exploring this new sales model, he replied by saying, “The biggest risk is the execution risk as we will have to quickly ramp up our distribution and supply chain to effectively service the market, but however, with a strong management team that has a lot of experience in the retail business, we are very confident that we will be able to deliver. Another risk that we foresee is erosion of market share in our ready-made garment market, but since close to 60 percent of shirting is still catered through the fabric route; we believe that any erosion in market share will not affect our position”.

Fibre2fashion News Desk - India

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