"We should expect double-digit grown over the next 6-7 years": Vineeta Singh

Every quarter Mahindra & Mahindra is planning to launch one new variant and thus planning to increase its retail footprints all-India significantly. Pravin Shah, President and Chief Executive (Automotive) Mahindra & Mahindra Ltd, unveiled their retail expansion plans during a one-on-one interaction with our correspondent Sunil Pol at the launch of the new version of XUV 500 in Mumbai.
 

What are your plans of increasing dealership centres across India?

Currently, we are operating through 380 dealers and total 1,500 touch points. We have laid expansion plans of increasing our dealership centres and touch points by launching one new variant and one new fresh car every quarter.

This means we are going to expand our product portfolio with the plan to launch more dealership centres and touch points in tier III and IV cities. We have a desire to meet the customer requirement of buying or servicing M&M automobiles within the radius of 20 to 25 km from his house.

We don’t count the number and don’t chase the numbers in terms of networks. We have a framed policy about how we need to distribute and serve the customers.

Any annual target of dealership centres with franchising?

I can say that there will be growing number of dealership centres opening in the market. We don’t chase numbers, if you love the numbers then at some other time you have to chase closers. We do it with the viability.

What is the investment amount you are putting for expansion plans?

The investment amount varies with the format on which we are planning for expansion. As a policy, we don’t add Mahindra owned dealership. We generally operate through franchise model so the investment number changes from model to model. I can say that we have much more value to offer associated with our brand considering the vast product portfolio in different segments.

What is your ratio of sale in rural and metro markets?

Presently, our rural penetration is somewhere around 37 per cent. Further, we have plans of increasing our rural market share. Overall, the M&M has very good rural presence. With the help of network expansion plans and existing network, our rural penetration is increasing.

Ratio of sale depends upon the need of the affordability and the need of the customer irrespective of the locations whether it’s a metro, rural or town. The XUV has the capability of taking on any roads and with all the drive options surely we share much better performance from the other competitors.

In today’s time, it will be fair to say that the traditional segmentation in terms of small cars, medium cars, big cars or SUVs has disappeared, what comes in the mind is what product one has to offer, at what price points, at what type of experience one is expecting and these become the fair amount reason on which people’s buying decision relies.

What’s your take on eCommerce five years down the line, for promoting M&M?

With growing eCommerce and transition in consumer behaviour and buying patterns, we will undergo the change within five years.

In India we have deep rooted offline retail sector association with customer psychology and behaviour and with mass employment. So in the future, we cannot predict the things. We need to reckon and we need to be constant of the facts.

I see eCommerce as exploding, but if you ask me, then I will say every commercial organisation has to stay with success. It is not only per say auto industry, the eCommerce is going to change the way we live and operate and transact. It’s changing by the day.

Today, it’s very difficult to say that eCommerce is a success. Yes, they are succeeding and we all have seen the benefits of that. But will these eCommerce market place service providers be profitably be existing on the basis of the valuation that they get? Time will only answer that question.

Don’t you think M&Ms entry into the compact XUV segment is a little bit late?

Yes, I have no hesitation in accepting that. But don’t forget the fact that people who define themselves as a part of SUVs must check that are they really SUVs. They should not only check based on the sales but the construction, the type of versatility for compact SUV -what one can expect from the compact SUV globally- do you get them or just these SUVs designed and made for substituting the fact. So, I guess, the consumer and the media need to judge and understand the fact much better.

How automotive industry is reviving from the sluggish growth last year?

With the economy exploring, prices are reducing and getting stabilised, and interest rates are likely to be softened, people are migrating and looking for the different type of product stores, so with this, we see that there is a scope for the XUVs and automobile industry to grow. Currently, YOY the industry is growing by five per cent.

What is your market share of SUV and XUV?

The entire SUV segment is over half a million cars and we are the market leader in SUVs with 54 per cent market share. And in XUV, we are still at a nascent stage and trying to capture the large market share.

What is your monthly sale of XUVs?

Our monthly sale of XUV is 3,000 and we are expecting it to grow attractively.

What is the price range of XUV 500?

XUV 500 is offered in four ranges that is, W4, W6, W8 and W10 at the price range of Rs 11.2 lakh, Rs 12.31 lakh, Rs 14.0 lakh and Rs 14.82 lakh respectively.

The US-based premium motorcycle maker Indian Motorcycles entered the local market a couple of months earlier, in a bid to leverage the growing opportunities in this segment.

In addition, this player is optimistic of leveraging its global brand in the local market, and quickly gaining a 10 per cent market share in the 1600 cc, and higher segment. In a conversation, Pankaj Dubey, Managing Director, Polaris India, highlighted their growth strategy.

What was the rationale for entering the Indian market?

We entered the Indian market three years ago with Polaris, which manufactures off-road vehicles, and this segment is still at a very ‘nascent’ stage. We offer ‘snowmobiles’ and all-terrain vehicles (ATV), which are a rather niche category, and are the only player marketing these products in India, currently.

Last year, our US parent bought the Indian Motorcycles brand and we decided this is the best time to launch the brand in the country, given the growth opportunities in the high-end motorcycle segment.

Who is your target customer?

Our customers are in the higher income group and 35 – 50 years, and are ‘passionate’ about riding a motorcycle. In addition, these customers often own an array of premium models, but they can differentiate amongst them and appreciate the intrinsic quality of each motorcycle.   

What is the current size of the premium motorbike segment in India?

Sales in the segment consisting of engines with a size of 1600 cc, and higher, was 200 units in ‘13. Our motorcycles are priced from Rs 26.5 lakh and we are aiming for a 10 per cent market share in this category.

We remain optimistic on the growth prospects for these high-end motorcycles and are also expanding our retail network which is currently limited to Gurgaon, to Bangalore, later this year.

You are currently importing CBU (completely built units) in India. Do you plan to set up an assembling or manufacturing unit in India, shortly?

We are not looking to shift to a CKD (completely knocked down) model right now or even set up a manufacturing plant, but are evaluating various options.

How are you differentiating yourself from other foreign manufacturers operating here?

We plan to ‘engage’ closely with our customers and plan to organise several events as well as work with our partners in this regard. In addition, our motorcycles have a classic design and display the brand’s heritage, and help to differentiate ourselves from peers.

Smile Labs Cosmetic, the official distributors of Smile LABS, USA, is a leading global player in the teeth whitening segment. And, this MNC recently opened its lounge style retail format in Mumbai, in a bid to leverage the expanding growth opportunities amongst premium customers. In a conversation,  Farraz Patel, Managing Director, Smile Labs Cosmetics highlighted their growth strategy.

Kindly highlight the rationale for your foray here?

Tooth whitening is a rapidly growing segment and I had observed this trend during a recent to USA. In India, I realised the absence of similar services along with the general hesitancy of consumers for availing of tooth grooming, and that was attributed to lengthy procedures and high cost for the same.

We are aiming to improve the lifestyle of our target audience including businessman, aspiring models, housewives and students via a pain-free tooth grooming services.

What are the services you offer?

We offer up to eight shades of whiter teeth within 15 minutes, and  the standard package is priced at Rs 8,500 along with applicable taxes.

How does your outlet differ from the regular dentist?

Our store format of a lounge style ‘Cosmetic Teeth Whitening' is quite different from a dentist’s clinic, and the emphasis is on grooming. In addition, we also have specialist therapists trained by our experts like Rukshana Eisa, and they effectively meet the needs of the client.

The personal grooming industry in the country is booming. Kindly share your views?

The grooming industry is expanding aggressively and that’s because of the growing importance of lifestyle-related activities. However, there is a ‘void’ with regard to cosmetic teeth whitening, and we are planning to grow our presence on a pan India basis.

Your expansion plans?

We plan to have 40 SmileBars across the country by the year end, and they would be present in both metros and tier-II and-III towns. 

Games The Shop is a specialist retailer related to electronic gaming. In a conversation, Amit Khemani, Director, of this retail chain highlighted their customer ‘engagement’ strategy to carve their niche in this emerging retail category.

Kindly throw more light on Games The Shop?

We began our operations in ‘09, and at that time, the computer-related gaming industry was still at a nascent stage, and the products in this category were mainly sold at book stores and music stores.

Our first outlet was opened at R-City Mall, Mumbai and the encouraging response made us expand our retail network to nine stores across the country.

We are a one-stop-shop for ‘gamers’ and offer software for various ‘platforms’ including PCs, PlayStation switch and Xbox, as well as consoles and accessories.

Who is your target audience?

Our customers are typically aged between 12 and 30 years, and have access to computers and allied gadgets. We reach our target audience via social media as well as via youth-centric events.

How do you differentiate yourself from peers?

We accept pre-orders for games that are global bestsellers, and ensure that our customers also get their favourite game on the day of the launch. In addition, we also ‘engage’ with our target audience via activities like midnight launches of games along with complementary merchandise with purchases at our outlets.

The Indian PC and console gaming industry has annual retail sales of Rs 500 crore, and our market share is nearly five per cent.

Are you looking to expand via franchising?

All our existing outlets are company owned, but we are considering the franchising model for growth. And, an entrepreneur would need a store of atleast 250 sq ft along with the ability to invest a minimum of Rs 40 lakh.

We plan to add 20 more stores to our network by the end of 2016.

Which is your bestseller?

Consoles like PlayStation roms and Xbox are en vogue. However, as the user base of PC-based games is still large in the country, there is strong demand for First Person Shooter (FPS) in the sports category. 

The home improvement segment is characterised by intense competition from organised players. However, Bonita has carved its niche via a range of world-class products. In a conversation with Shipra Srivastava, Umang Srivastava, Joint Managing Director, Bonita India highlighted their growth strategy.  

The home improvement segment has seen rapid growth over the past few years. Kindly highlight your growth?

Our brand Bonita was launched nearly five years ago, and we offer a range of laundry care and storage solutions including ironing boards, clothes dryers and allied accessories. No doubt, there are several unorganised players in these product segments, but we have differentiated ourselves with our world-class product range.

Who is your target audience?

Homemakers in metro cities who are from middle class and higher income brackets, and need to complete several tasks in their home.

 What are the emerging trends in these product segments? 

Consumers are increasingly purchasing products with a range of functionality as well as that offer value for money.

Organised retail is becoming a key distribution channel for purchasing various household products. Please throw light on your retail network?  

 Our products are available at more than 1,000 mom-and-pop stores across the country as well as at leading e-retailers. In addition, we will be shortly expanding our presence to well known retail chains as well as exporting our products.

Would you be leveraging the franchising model for your expansion?

 Yes, we are looking for franchise partners and they need to have a store size of 400 – 700 sq ft.

The domestic luxury market is projected to reach $ 14 billion over the next few years, and in a bid to leverage these growth opportunities, Spain-based Tous, a high-end jewellery and accessories retailer, is shortly planning to make its debut here. In an exclusive conversation, Jose Maria Folache, CEO of TOUS, highlighted their India-related strategy.

What factors led you to evaluate a foray in the Indian market?

The rapidly expanding high-end segment here just can’t be ignored and we are keen to establish our presence in the Indian market.

In addition, I would also like to highlight that with the growth of the organised retail industry in India, it has created several opportunities for leading global brands including us.

No doubt, the legal environment is quite complicated here vis-à-vis peers in other high growth market, but the growth opportunities in the Indian jewellery market are rather ‘attractive’ on a long-term basis.

Have you found a local partner?

No, but we are currently looking for an Indian partner. We are also keen on establishing a retail presence in both New Delhi and Mumbai.