2. SETTING OBJECTIVES
IN THE CONTEXT OF COMPANY AND INDUSTRY
Sources: VFL quarterly results, Annual Report 2021-22, Technopak, sales are projected (for branded segment) to grow at 18-20% between FY23-26; detailed projects of slaes are provided in appendix
2
Implications on Vedant Fashions Limited’s (VFL) sales
Objective: To increase market share in tier 2 and 3 cities from current 1% to 2% in 3 years
FY23 FY26 (target)
VFL sales, INR Bn 13.26 30.60
Wedding and celebration wear market 1,214.84 1,446.89
13.26
16.35
22.01
30.6
0
10
20
30
40
FY23 FY24 FY25 FY26
Sales, INR Bn
32%
CAGR
Achieving the target would entail Vedant Fashions outgrowing the industry significantly, cementing its lead in the
men’s category and establishing strong presence in women’s category
32% Vs 6%
CAGR of VFL’s sales vs the Indian wedding and
celebration wear market over the next 3 years
~2X Growth of VFL as compared to the branded
segment in its category
3. FOUR BRANDS SERVING DIFFERENT SEGMENTS
3
MANYAVAR THE LEADING BRAND WITH MOHEY A DISTANT SECOND BUT STRATEGICALLY
IMPORTANT
KEY
ATTRIBUTES
• Category
leader in
branded
wear
•No END OF
SEASON
SALE/
discounts
• Leveraging
Manyavar
leadership
• independent
campaigns for
visibility
•Upscale
experience
•Priced b/w
Manyavar and
luxury
boutiques
•Value price
offerings
•Focusing on
sizeable
midmarket
weddings
• Focus on
South Indian
market
•Strong
presence in AP
& Telangana
DISTRIBUTION
EBO/MBO/
LFS/E-com
EBO/ E-Com EBO
MBO/LFS/ E-
com
EBO
PRICING Mid-premium Mid-premium Premium Value
Mid-premium
to premium
TARGET
GROUP
Men, boys Women Men Men
Men, women,
kids
Brand
Current
contribution
Contribution
potential
Profitability Total
Mohey 2 5 5 12
Manyavar 5 3 3 11
Twamev 1 2 4 7
Manthan 1 2 2 5
Mebaz 1 1 3 5
Mohey and Manyavar are prioritized owing to:
1. Largest share of revenue for parent company at ~90%
2. Enormous market of women’s wedding & celebrations
wear, making Mohey a high-potential brand in portfolio
Imperative to focus on Manyavar and Mohey brands to achieve the desired objective
5. MARKET FOR WEDDING + CELEBRATION WEAR IN TIER 2 AND 3 CITIES IS
LARGE, GROWING, AND UNDERPENETRATED BY BRANDS
Source: IIFL Research; industry projections and own analysis (see appendix for more details)
5
Tier 1,
44.22%
Tier 2,
42.05%
Tier 3,
12.31%
International,
1.42%
VFL sales distribution
126.48
213.15
37.03 62.4
384.36
395.33
112.52
115.71
0
100
200
300
400
500
600
700
Tier 2,
FY23
Tier 2,
FY26
Tier 3,
FY23
Tier 3,
FY26
Wedding + celebration wear market size, INR Bn
Branded Unbranded
Tier 1 and tier 2 cities have evenly distributed sales for VFL; therefore, tier 2 cities offer bigger opportunity for
expansion as compared to tier 3 cities
6. WOMEN’S WEDDING + CELEBRATION WEAR MARKET MOST ATTRACTIVE
6
21.74 37.57
91.14
153.59
44.87 41.76
276.96
284.83
0
50
100
150
200
250
300
350
400
450
500
Men's,
FY23
Men's,
FY26
Women's,
FY23
Women's,
FY26
Wedding + celebration wear market size in tier 2
cities, INR Bn
Branded Unbranded
Observations:
• Women’s wedding and celebration market size is 6X
of men’s
• Women’s branded market size is only 4X of men’s
Women’s market of interest is considerable larger and relatively underpenetrated by brands, providing opportunity
for Mohey to tap into this segment
7. LOCAL RETAILERS MAINTAIN STRONGHOLD WITH AFFORDABLE SELECTION
7
S
STRENGTHS
ONLINE MARKETPLACES
LOCAL RETAILERS OTHER BRANDS
W
WEAKNESS
T
THREATS
O
OPPORTUNI
TIES
Local Cultural Connection, Competitive
Pricing, loyal customer base
Lacks online presence, Limited Product
Range, Limited Brand Recognition
Embracing E-commerce, Collaboration
with Local Artisans
Competition from Established Brands,
Changing Consumer Behavior, Rising
Online Marketplaces
Wide product range, Convenience and
Accessibility, Competitive Pricing,
Customer Reviews and Ratings
Expansion into Niche Markets,
Improved User Experience
Competition from Established Brands,
Counterfeit Products, Logistics and
Delivery Challenges
Online Market Expansion,
Collaborations and Partnerships
Local Cultural Connection, Competitive
Pricing, loyal customer base
Premium pricing, not available to all
age groups/customer personas, Limited
Physical Presence
Diverse Product Range, Quality and
Craftsmanship, Established Brand
Reputation
No physical stores, Quality Control,
Limited Personalization
Establishing cultural connection and providing premium personalization to target audience is the key to enhance
Manyavar’s and Mohey’s presence in tier-II and tier-III cities in India
8. 8
CUSTOMER EXPERIENCE REMAINS UNADDRESSED
Lack of Size Range: Finding the perfect fit can be challenging as many stores in tier 2 and
tier 3 cities may have limited size options
Lack of Trendy Options: Customers in smaller cities may have limited exposure to the latest
fashion trends in ethnic Indian wedding wear
Lack of Customization: Customers may face difficulties in finding customization services for
their ethnic Indian wedding wear
Limited Awareness of Trusted Brands: Customers may face challenges in identifying and
choosing trusted brands for ethnic Indian wedding wear in smaller cities
Difficulty in After-Sales Support: Obtaining after-sales support, including alterations,
repairs, or return/exchange, can be challenging due to limited local presence of the brand
9. MOHEY — UNMATCHED QUALITY AND CRAFTSMANSHIP
9
INTERNAL FACTORS EXTERNAL FACTORS
POSITIVE
NEGATIVE
• Strong profit margins, combining the strengths of a brand and
a retailer
• Data-backed decision making and strong control over supply
chain leading to no discounted sales
• Asset-light expansion model leading to improved cash flows
STRENGTHS
• Primarily depends on Indian wedding and celebration wear
and is vulnerable to variations in demand
• Reliance on 3rd party manufacturers for production of end
products could hamper business operations in case of any
disturbances
WEAKNESSES
• Huge domestic market of 9.5-10m weddings per year
• Multi-day and multi-event wedding celebrations are increasing
market share and extending offerings beyond Bride and Groom
• Shift from tailored to ready-to-wear celebration ethnic wear and
acceptability of branded apparels
OPPORTUNITIES
• Frequent changes of current style and trends requires
continuous experimentations with designs
• Intensified competitions from local established players
and large brands entering the segment
THREATS
11. 11
EXPANSION SUPPORTED BY A FOUR-PRONGED APPROACH….
Customer Engagement
and Loyalty Programs
04
● Enhancing personalized Shopping Experience
● Introduce Loyalty Programs to reward
customers
● Engage in Social Impact Initiatives
Marketing and Advertising
03
● Partner with local Influencer Collaborations
● Participate in Regional Festivals and Events
● Utilize Traditional Media platforms
(Newspaper, radio)
Distribution Channels
02
● Increasing Offline Presence (EBOs, MBOs)
● Developing robust Online Platform
● Creating a user-friendly Mobile App
Product Assortment and
Quality
01
● Emphasize the premium quality and
craftsmanship of the products
● Create unique designs and use high-quality
fabrics to justify pricing
12. 12
….COMPLEMENTED BY DIFFERENTIATED INITIATIVES TO ACHIEVE TARGET
Bride and Groom of Manyvar &
Mohey
• Social media pages(facebook,
instagram) posting
customers’ buying journey and
post purchase dynamics
• Online community of Mohey
Brides and Manayvar Grooms
Partnering with Stylists,
jewellers
• To create the whole wedding look
for Bride and Groom in the stores
• Giving customers their desired
wedding look
Becoming future-ready through
technology
• Generating an AI model to try
outfits via mobile app/website
• Hassle-free and convenient
option to try from home
• Using the data collected to
suggest the related outfits
13. 13
SOME RISKS PERSIST BUT CAN BE MITIGATED EFFECTIVELY
1. Price Sensitivity : Tier 2 and tier 3 cities generally have a higher price sensitivity compared to tier 1 cities. Consumers in these
areas may be more value-conscious and price-driven.
Mitigation - Payment flexibility like Buy Now Pay Later, EMI options; to cater to the price-conscious customers.
2. Infrastructure and Distribution Challenges : Limited transportation networks, underdeveloped retail infrastructure, and inadequate
distribution channels can impact timely product delivery and accessibility.
Mitigation - Collaborate with local distributors and establish partnerships with local logistics providers to ensure smooth and
timely delivery.
3. Cultural Sensitivity : Each region in India has its own cultural norms, traditions, and fashion preferences. Failure to understand
and respect local cultural sensitivities may lead to rejection of the brand.
Mitigation - Initiate marketing messages and campaigns to align with the local culture while maintaining the brand's essence.
4. Regulatory and Legal Compliance : India has various regulatory and legal requirements that businesses must comply with,
including taxation, labor laws, and local permits. Expanding to tier 2 and tier 3 cities may introduce additional compliance
complexities that need to be thoroughly understood and managed.
Mitigation - Seek legal counsel and ensure compliance with local laws, regulations, and taxation requirements.
14. The contents of this document are confidential and intended solely for the recipient party.
Thank you
