IPO-bound Fabindia plans to penetrate into the ‘non-diaspora’ international markets by building a new product portfolio, said a top official.

Within the country, the Indian retail chain’s plans include expansion of physical retail network across geographies, expanding its omnichannel presence and direct-to-customer sales. 

Speaking to BusinessLine, Viney Singh, Managing Director, Fabindia Limited said that there has been a “steady progression” in the sales from its international stores.

As of September 30, 2021, Fabindia has 309 retail stores, including 11 retail stores located outside India. Further, through online channels and exports, ‘Fabindia’ and ‘Organic India’ products are sold and distributed in 55 countries.

Revenue growth

In FY19, FY20, FY21, and the six months ended September 30, 2021, the company’s revenue from operations from outside India amounted to ₹10.58 crore, ₹10.35 crore, ₹7.2 crore, and ₹4.4 crore, representing 0.94 per cent, 0.91 per cent, 1.24 per cent and 1.29 per cent, respectively, of the company’s total revenue from operations in such periods.

“For Organic India, international markets contributed to approximately 55.61 per cent and 54.34 per cent of sales in FY21 and in the six months ended September 30, 2021, respectively, and will continue to remain the focus areas,” Singh said.

“When you go to non-diaspora markets, the product portfolio needs to be changed...you need to build on the western wear portfolio, you have to study customer behavior in those countries and tailor your products to cater to that aesthetic...this works across all categories, particularly in the apparel and home segments.”

Domestic market

Speaking about the domestic market, he said that Fabindia has plans to expand its physical retail network in new and existing markets. “Fabindia seeks to expand its geographical footprint,” he said. 

“Around 55 per cent of Fabindia’s stores are in metros and mini metros. The others are in tier-1, 2 and 3 cities. Our revenue is largely in line with the store footprint.

“We are seeing tremendous business recovery across metros and tier-1,2, and 3 cities. The growth being seen in tier-2 and tier-3 cities reflects the higher potential for expansion in the country. With a focus on franchisee model, Fabindia is looking to expand into these cities,” he explained. 

Online sales

Over the past two years, the company has seen a tremendous growth in its online sales also. The company’s revenues through online sales amounted to ₹45.81 crore, ₹67.65 crore, ₹93.17 crore and ₹61.15 crore (on a standalone basis) during FY19, FY20 and FY21 and in the six months ended September 30, 2021, representing 4.09 per cent, 5.95 per cent, 16.00 per cent and 17.75 per cent, respectively, of the company’s total revenue from sales.

“The introduction and growth of ‘online retail’ has made online shopping a material part of our growth strategy, and we believe that increasing presence of online-retailers and e-commerce platforms in India and internationally will have a significant impact on our business going forward,” Singh said.

Fabindia intends to continue integrating physical and digital capabilities to create a seamless and integrated omnichannel ecosystem, he added.

New products

“Over the years, FabIndia has managed to garner a long-term relationship with affluent shoppers due to its premium product positioning. However, in order to connect with the millennials and the Gen-Z, Fabindia has also launched a new line of collections called FabNu,” Singh said.

Fabindia plans to broaden lifestyle offerings including fusion wear and accessories to target the younger audience, he said.

“We plan to add new products which are contemporary, fit for everyday use, and are more affordable in order to target new customer categories such as young adult women,” Singh said.