We hope to open 25 stores by 2016-17 & 50 stores by 2018-19: John Baby

In conversation with Retailer Media, John Baby, ‎CEO, FUNSKOOL, reveals his brand’s franchising model.

There is a dearth of toy stores or space allocated to toys in India. This is more pronounced in Tier 2 towns, which actually prompted Funskool to get into retailing of the toy brands that it works with. Now, the brand has 18 stores in both, larger cities and tier 2 towns. In the larger cities they focus on malls, which did not have toy stores earlier.

Which format, according to you, works well for your brand– EBOs or shop-in-shop and Why?
With Funskool outlets, we are able to showcase the entire range that is in our arsenal, which is the main reason why we ventured into our own retail network. We have also experimented with a few Shop in Shop formats, especially in towns like Hosur and Erode, where there were no malls with huge footfall.

Keeping in mind the growing customer preferences, what’s your omni-channel strategy? Do you sell through your own ecommerce platform or through marketplaces?
We work with all the leading ecommerce players and our reach with the offline network is clearly the best amid the Indian Toy Industry. We have provided a link from our website to prominent ecommerce sites, but as of now we do not sell directly from our own website. We have a good network of retailers, who are market place operators on the prominent ecommerce sites.

Who is your target consumer and what consumer area/sensitivities does your brand stand for?
We have products catering to all price points. Having two manufacturing units of our own, at Goa and Ranipet ensures that we have a healthy competitive pricing for the products that we manufacture, which makes it affordable for everyone.

There are many active players in this segment, what’s your strategy to beat the existing competition?
We represent the top brands namely LEGO (Denmark), Hasbro (USA), Tomy (Japan), Ravensburger (Germany), Leapfrog etc through national distribution agreements. On the other hand, we are also building our own brands like Giggles (Infant & Preschool) Handycrafts (Arts & Crafts) Play’N’Learn (Educational Puzzles) Fun Doh (Dough) etc, which has been accepted well by the market. This combination has worked well for us as we are making the top brands of the world available to Indian customers as well as providing good quality toys at affordable prices.

What’s the average store size and investment required to open a store?
Our stores have carpet areas varying between 800 sq ft and 1500 sq ft, but are all located in prominent malls. Investment varies depending on the city, in which the store is located.

What’s the technology that is being used to make store operations efficient and who are your tech partners in the same?
We have our own custom made software, which has been quite effective. We have a competent team of professionals, in house, who ensure that visual merchandising and planograms are of high standards.

How do you manage your supply chain and logistics effectively?
We operate through a network of two factory warehouses and 17 field warehouses. Goods move from the factory warehouses to the field warehouses and this network makes it possible for us to service most orders within 48 hours.

As you have a franchising model, what number of franchise stores do you plan to open and where?
We hope to open 25 stores by end 2016-17 and hope to grow to 50 stores by the end of the financial year 2018-19.

What support do you give to the franchisee?
We guarantee the franchisee that they will not have any operating losses. We also run promotions in the store and do all that is required to generate demand.
We help in the store set up and interiors and the franchisee runs the store and invests in stocks. Most franchisees are happy with the returns generated by the stores.

What’s your expansion plans?
We are always looking at opening more stores. Currently, we have 18 stores including an exclusive LEGO store in Chennai and hope to open 50 stores in place within the next three years. We will continue to target a mix of larger cities and tier 2 towns.