In-depth analysis and research about Fabindia's distribution model, business channels, sales scenario and business partnerships.

1. A STUDY OF FABINDIA’S SALES &
DISTRIBUTION MODEL
SUBMITTED BY:
VEDANSH VARSHNEY (401703030)
SUBMITTED TO:
DR. HARJOT SINGH

2. CONTENT SLIDE NO.
Which approach was chosen? 3
Introduction to Fabindia 4
Fabindia’s Product Mix 5
Fabindia and Rural Development 6
Fabindia’s Supply Chain 7
Fabindia’s Revenue Statistics 8
Innovative Approaches to Improve Sales 9
Fabindia’s Experience Centers 10
Channels of Business 11
Fabindia’s Omnichannel Growth: Vinculum 12-13
Fabindia’s Partnership: Star Sports 14
Fabindia’s Digital partner: Zeno Group India 15
Suggestions made to Management 17-18
Reflections 19
Summary of Professional/ Business Related Points learned 20
References 21
TABLE OF
CONTENT

3. WHICH APPROACH WAS CHOSEN ?
 I will be selecting Approach 1 for the purpose of this project and will partake in
studying about the Sales and Distribution Model of an existing organization. The
organization chosen for this project is Fabindia and the motivations behind this
decision are listed below.
 REASONS FOR SELECTING FABINDIA FOR THIS STUDY?
1. Fabindia is a well-established organization as it holds the title for being India’s
largest private platform for selling and promoting products created through
traditional techniques, skills and hand-based processes.
2. To accomplish their objective, Fabindia has been working with rural artisans and
craftsmen, thereby providing them with a source of sustainable employment and
also creating a link between these craft-based rural producers and the modern
urban market.
3. It’s quite interesting and motivating to conduct a study on a company that has
been creating such a profound impact by helping one of the underprivileged
sections of our society, contributing to rural development while also being able to
preserve our rich Indian culture and craft traditions at the same time. It’s inspiring
to study about their journey, their social impact, and the way they have managed
to keep our glorious past and history alive in this era of rapid future
advancement.

4. INTRODUCTIONTO FABINDIA
 Fabindia (or Fabindia Overseas Pvt. Ltd.) is an Indian chain store retailing garments, furnishings, fabrics and ethnic products handmade
by craftspeople across rural India.
 It was established in 1960 by John Bissell, who foresaw the enormous power of Indian textile and how it could be an opportunity to
help the traditional artisans gain a dignified standard of life.
 Fabindia started out exporting home furnishings, before stepping into domestic retail in 1976, when it opened its first retail store in
Greater Kailash, New Delhi. As of July 2020, Fabindia operates 327 stores across India and 14 international stores.

5. FABINDIA’S PRODUCT MIX
Garments Furniture Home Linen
Personal Care Organic Food Handcrafted Jewelry

6. FABINDIA AND RURAL DEVELOPMENT
 Fabindia was founded with the strong belief that there was a
need for promoting the vast and diverse craft traditions of
India and help fulfil the need to provide and sustain
employment at the same time.
 Fabindia endeavours to bring alive products and encourage
lifestyles that celebrate our rich Indian culture, craft traditions
and wisdom. They work with more than 50,000 crafts persons,
helping them create products with intrinsic value – products
that are relevant and find meaning in our contemporary
lifestyles while being anchored in our rich culture and craft
traditions from our glorious past.
 The brand sees itself as that essential bridge between our rich
cultural past and modernity at one level, and at another, a
brand that connects the rural artisan and craftsperson with
the discerning urban consumer.
 Authenticity and inclusive partnerships stay are the core of
everything that they do at Fabindia.

7. FABINDIA’S
SUPPLY CHAIN
SRC is a self-managed, consolidated artisans, weavers and
craft workers in a particular geography and offers them joint
ownership of resources and access to common facilities. It
also trains artisans and develops new handicrafts.

8.  Fabindia closed FY19 with sales of Rs 1,148 crore and a net profit of Rs 116 crore. It is targeting sales
of Rs 1500 crore in FY21. Seventy per cent of its revenue comes from metros.
 Fabindia currently has 322 stores across 114 cities in India and 14 international stores.
 For fiscal 2020, Fabindia Group reported operating income of Rs 1,565 crore and EBITDA margin of
12% against Rs 1,457 crore and 17% respectively in the previous fiscal. The revenue and EBITDA
were impacted in the last quarter of fiscal 2020 due to lockdown in March. Further, EBIDTA margin
was also impacted due to costs incurred while shifting operations of Organic India to the new
manufacturing plant.
 Fabindia group operates in the highly competitive consumer retail market deriving almost 60% of its
revenue from the apparel segment, where a large number of established players vie for consumer
spends. The consumer retail segment will be impacted by relatively lower discretionary spending and
impact of lockdown on consumer's income levels. While the acquisition of Organic India has
benefitted the diversity of the Fabindia group, the dependence on apparel will continue to remain high.
FABINDIA’S REVENUE STATISTICS

9. INNOVATIVEAPPROACHES
TO IMPROVE SALES
 Initially Fabindia relied on word-of-mouth as a method of
promotion and relied heavily on its loyal customers to spread the
word. As the company did not offer any discount or any bargain
price and had fixed price for its products, it had to change its
marketing strategy. With change in time, to make customers aware
of its authenticity and genuineness it took to print media to
advertise its products through in-store posters, mobile marketing
and advertising.
 Fabindia also recognized the benefits of social media platforms
and adopted an online marketing strategy to create awareness about
the brand.
 Fabindia has put forth the rural artisan community in all its
marketing campaigns to generate an emotional connect with the
people of India. These campaigns also revolve around assuring high
quality products which are handmade and organic.
 They started experimenting with the concept of “Experience
Centers” which helped them increase their sales by nearly 25%.

10. FABINDIA’S EXPERIENCE CENTERS
 In March 2017, the ethnic fashion retailer started experimenting with
Experience Centres. Experience Centres are 8,000 to 12,000 square feet
retail outlets (regular stores are around 3,000 square feet). In addition to
garments, organics, home and personal care, they house a FabCafe, an
Interior Design Studio, a Wellness Center and an Alteration Studio.
Typically, each experience centre requires an investment of Rs 3,000 crore
per square feet.
 In spite of the large investment they require, Ajay Kapoor (President, Retail,
Fabindia) says they have shown significant business benefits. He shares after
they converted the Home Store in the Greater Kailash area of Delhi, its sales
have on average grown by 40 per cent. Overall, in their 25 Experience
Centres to date, sales have jumped by nearly 25%. They planned to take
its number to 30 by end of FY 20.
 Major locations of Experience Centers across India includes metropolitan
cities like Delhi, Gurugram, Chandigarh, Mumbai, Bengaluru, Chennai,
Kolkata, Jaipur etc.

11. CHANNELS OF BUSINESS
RETAIL
 The retail channel is already developed
within India with almost 100 stores in Tier
1 and Tier II cities. As of today,
internationally Fabindia owns stores in
Rome (Italy), Guangzhou (China), Dubai
(UAE), Manama (Bahrain) and Doha
(Qatar).
 The product range consists of garments for
men, women, children and infants; garment
accessories; home furnishings – bed, bath,
table and kitchen linen, upholstery fabric,
curtains, floor coverings and a range of non
textile products like furniture, lights, lamps
and stationery.
 In addition to handcrafted clothing and
home furnishings, Fabindia’s product line
includes organic foods and body care
products.
INSTITUTIONAL SALES
 Fabindia envisages to service high business
institutional segment especially the heritage
hotels and multinational corporate houses.
It provides customization and interior
designing consulting for clients like
heritage hotels, resorts and corporate
houses.
WHOLESALE EXPORTS
 Fabindia exports to more than 34 countries.
The clients are wholesalers as well as
secondary retailers. Products exported
include home linens as well as garments.
 The export being a very lucrative market,
Fabindia develops a special collection for
exports markets twice every year. The
special collections are showcased at the
Indian Handicrafts and Gifts Fair, New
Delhi in Spring and Autumn.
 This collection draws on different
techniques to present a range of home
furnishings comprising bed and table linen,
with a focus on textures – both visual and
tactile.
 As different wholesalers and retailers flock
to these fairs to address their sourcing
needs, Fabindia is able to reach out to
potential clients.

12. FABINDIA’S OMNICHANNEL GROWTH:VINCULUM
Vinculum has nurtured Fabindia’s growth within the retail omnichannel
domain through the implementation of Vin eRetail.
Vin eRetail is a SaaS-based retail suite that helps brands in 25 sub-
categories to create content once and push it to multiple retail channels,
manage orders, inventory and fulfillment on a real-time basis. This
modular suite of products covers inventory management,
replenishment, B2B & B2C warehousing, returns management, point-
of-sale solution, order management, supplier portal & analytics.
PROBLEM FACED BY FABINDIA?
Fabindia expanded its product base and vendor base, which
dramatically increased its online orders and order sizes. However, the
absence of a centralized Order Management and Warehouse
Management System increased the turnaround time. Fabindia
needed an automated Warehouse Management and Order Management
System to enhance its level of order processing and improve the
efficiency of warehouse operations.

13. SOLUTION OFFERED BY VINCULUM
Vinculum implemented Vin eRetail that helped Fabindia solve the
following problems:
 Omnichannel order allocation and fulfilment at line quantity level to
support online to offline flow.
 Implementation of order management rule engines to drive their
complex allocation logic.
 Multi-location warehousing.
 Integrations with organization’s subsystems along with webstores
and last mile delivery partners.
 Business intelligence reports to improve inventory planning and
operational efficiency.
HOW DID IT BENEFIT FABINDIA?
Vin eRetail helped Fabindia to expand their business and improve the
efficiency of warehouse operations. This yielded the following results:
 More than 30% reduction in turnaround time.
 Around 60% reduction in the cancellation rate.
 Fulfilling thousands of orders from multiple geographies.
 Enabling business expansion: 40-50 new retail stores are added
every year.
 Optimized inventory and increased fulfilment rates.
ON-TIME
DELIVERY

14. FABINDIA’S PARTNERSHIP: STAR SPORTS
“One essential element of our marketing strategy has been to help our
consumers re-contextualise our products and emphasize on their
innate ability to be a part of their everyday lives. The western casual
wear category for men is especially important for us,” said Karan
Kumar, chief brand & marketing officer, Fabindia in a company press
release. “We believe that the Maruti Suzuki Cricket Live’s unparalleled
reach combined with the sartorial style of its anchors would be a great
platform to showcase the versatility of our product language to
almost a billion people across the country.”

15. FABINDIA’S DIGITAL PARTNER: ZENO GROUP INDIA
 Zeno Group India, a global integrated communications agency, was appointed as the digital partner for Fabindia. Zeno won the
account following a multi-agency pitch and will manage this account from its Delhi office. As the agency of record, Zeno will lead their
brand strategy, content development, and oversee management and execution of digital media.
 “Fabindia’s Home & Lifestyle business has consistently endeavoured to market products with intrinsic worth which while at one level
are inspired by India’s rich cultural traditions and yet at another beautifully compliment contemporary lifestyles of the modern and
discerning consumer,” said Fabindia Marketing Head Karen Kumar.
 Chief Client Officer of Zeno Group Asia Papri Dev said, “Fabindia is in a rapidly transforming category with influx of international
brands and emerging local players in this space. We’re excited about the journey ahead, to carve a distinctive brand identity for
Fabindia’s Home and Lifestyle business along with their Interior Design services – focusing heavily on integrated storytelling across
digital platforms.”

16. SUGGESTIONS & LEARNINGS

17. SUGGESTIONS MADETO MANAGEMENT
 INCREASED FOLLOWER ENGAGEMENT:
• Fabindia has been utilizing social media platforms like Instagram and Twitter well
enough to promote and create awareness regarding their products and campaigns. They
also happen to have a huge following of 535K followers on Instagram but their initiatives
to engage in interaction with their followers through these platforms are underwhelming.
On an average, their posts receive around 100-500 likes which signify very minimal
reach on social media as people are barely interacting with their posts.
• I would suggest them to introduce initiatives that encourage interaction with their
follower base as it can help them find new potential customers. This can be achieved
by conducting games/ quizzes/ challenges that require people to participate and the
winners or participants can be awarded with discount coupons, gift vouchers or giftware.
These events can be conducted on a weekly or monthly basis but regularity is important.
The incentives provided can encourage people to visit their nearby stores, engage in
online shopping and most importantly create brand awareness. Also considering the
fact that the pandemic has increased people’s social media activity significantly, hence,
this opportunity should be utilized by the company to interact with their audience.
• For example: As Fabindia promotes our rich Indian culture and heritage, they can create
an online challenge like a “Photography Contest” where people are supposed to send in
entries that capture the richness and uniqueness of our culture & heritage. They can even
organize a “Beauty/ Fashion Contest” where people send in pictures of them wearing
traditional Indian outfits.

18.  INTRODUCE INFLUENCER MARKETING
• Influencer Marketing involves a brand reaching out to influencers that
agree to endorse/ promote their products in exchange for certain incentives.
• Upon research, I couldn’t find any past instances where Fabindia reached
out to any sort of influencers (whether popular or local) for the purpose of
promoting their products (or even appoint anyone as the brand ambassador
for their brand). Influencer Marketing is indeed a strong marketing tool
that can be used to create increased brand awareness. Considering the
example of another Indian clothing brand “Biba” that appointed Parineeti
Chopra as the brand ambassador for their ethnic brand Rangriti.
• Fabindia can benefit immensely either by reaching out to influencers
with a huge following (like celebrities) or local influencers (with a
relatively less following). Keeping in mind that local influencers are more
accessible and have more frequent interactions with their followers which
results in establishing a stronger sense of connection and trust with their
follower base, approaching local influencers working in the domains of
beauty, fashion, personal care, designing etc. can prove to be highly
beneficial for the company’s promotion and sales.
• Social Media Marketing is the most affective mode of marketing amidst
this pandemic where people are spending their time on social media
platform on a frequent basis and interacting with content produced by such
influencers or creators.

19. REFLECTIONS
 Looking at my project, I believe that I learned a lot about different concepts of Marketing, mainly about the
aspects of Sales & Distribution Management in great detail and depth. It helped me gain insight regarding an
organization’s supply chain, it’s different components and stages ranging from vendors and suppliers to
manufacturer to point of sale, including packaging, inventory, warehousing, and logistics.
 This project provided me with an opportunity to conduct secondary research work and helped me gain greater
clarity regarding the methodology that should be adopted while researching an organization and about their
business model and working structure.
 I feel that the major limitation faced during this project was the inability to conduct primary research work
owing to the ongoing COVID-19 pandemic which has posed restrictions on movement and has deprived me of
the opportunity to conduct in-person personal interviews. I believe that a personal interview with an official
from any Fabindia store could have yielded much greater information regarding their distribution model, market
scenario and sales. I also felt that secondary research acted as a restriction for me in terms of expressing my
creativity to some extent because I was bounded to refer to pre-existing data, studies, reports and research.
 Overall, it was a knowledgeable and great learning experience for me.

20. SUMMARY OF PROFESSIONAL/ BUSINESS RELATED
POINTS LEARNED
Undertaking this project helped me learn the importance of conducting Secondary Research i.e. research method that
involves using already existing data. Conducting a secondary research in order to gather the necessary information for my
study challenged my internet surfing skills as it involved extensive research to get hold of official sources, business reports,
statistics and studies based upon my organization of interest and then thoroughly examining them in order to extract the
required useful information to include as a part of my study.
It also helped me understand the importance of Sales and Distribution Management for an organization. Sales Management
requires careful analysis and forecasting of market situations and then creating strategies and plans in order to achieve the
objectives set by an organization. For example: Visiting Fabindia’s social media outlets on Twitter and Instagram revealed
that though they have been utilizing these platform for creating brand awareness and promoting their products, their
engagement with their audience has been significantly low. Social media apart from being an essential tool for brand
promotion and being updated with changed market scenarios and trends, has primarily been used for establishing connections
with people and in order to ignite a sense of interest or curiosity in their audience regarding their products, engaging in
audience interaction is highly important.
Studying about Fabindia’s Supply Chain and their different business channels provided greater insight and understanding
about their Distribution model. An organization’s profitability, scale of operations, and brand can be impacted by the
strategic selection of distribution channels and partners. For example: Opting for Vin eRetail created by Vinculum provided
them with numerous benefits as it significantly reduced their turnaround time, cancellation rates, aided in business expansion
and helped them maintain an optimized inventory and fulfill greater number of orders.
Being an individual project, it was important to be organized and have a clear vision regarding the methodology of
conducting the research. Time management had to be employed in order to meet project related deadlines.

21. REFERENCES
1. https://en.wikipedia.org/wiki/Fabindia
2. https://amitavac.com/cms/cache/2015/03/6107-Fabindia-CS-EN-0-01-2015-w.compressed.pdf
3. https://www.newindianexpress.com/cities/delhi/2019/mar/29/fab-india-partners-with-star-sports-1957312.html
4. https://phygitalmagazine.com/the-secret-into-fabindias-omnichannel-growth-through-audience-engagement-product-experience-and-immersive-retail/
5. https://www.exchange4media.com/marketing-news/fabindia-appoints-zeno-group-india-as-digital-partner-100497.html
6. https://bestmediainfo.com/2019/07/immersive-customer-experience-is-what-will-drive-retail-says-karan-kumar-of-fabindia
7. https://www.airfrance.fr/FR/fr/common/travel-guide/fabindia-anokhi-kashmir-loom-le-toucher-de-l-inde.htm
8. https://www.businesstoday.in/top-story/fabindia-to-spend-up-to-rs-1500-crore-in-fy21-to-open-30-experience-centres/story/392511.html
9. https://www.forbesindia.com/article/social-impact-special/rural-artisans-stand-to-benefit-from-fabindias-aggressive-growth-plan/45369/1
10. https://www.businesstoday.in/top-story/fabindia-to-spend-up-to-rs-1500-crore-in-fy21-to-open-30-experience-centres/story/392511.html
11. https://yourstory.com/smbstory/fabindia-covid-19-retail-business/amp
12. https://www.fabindia.com/fabcafe-menu
13. https://www.bloomsburyfashioncentral.com/about/featured-content/fabindia-fashion-with-social-objectives
14. https://digital.hbs.edu/platform-rctom/submission/fabindia-connecting-indias-rural-economy-to-the-market/
15. https://www.indiatoday.in/magazine/cover-story/story/20170821-fabindia-fashion-business-model-indian-clothes-rural-workers-1028873-2017-08-11

22. THANKYOU !