The Indian retail industry growth story continues to evolve best exemplified in afascinating mix of retail formats. Those with mass appeal many with niche positioningand yet others that are creating new previously undiscovered market segments. Withaspirational consumption especially among the youth and young families reaching newhighs fashion retailing is on an unprecedented growth trajectory. This is even moreevident in smaller towns the confluence of India and Bharat where the aspiring class hasan unmet need for value fashion designed to satiate their desire for fashionable apparelwhile giving them value for money well-equipped to harness opportunity
Broader demographic and socio- economic shifts in the consumer landscape risingpenetration of the Internet and social media and the enabling GST structure have all beencatalysts in driving the growth of organised retail yielding greater or the economy. Thevalue f benefits fashion market in particular is witnessing a new level of adoptionboth from consumers and organised retailers with Tier IV towns also eagerly adopting thetrend of Tier II and III towns of seeking fashionable but affordable apparel. With theaspiration gap between the small and large towns narrowing organised retail is gettingbigger and better a trend that augurs well for us at V-Mart. With our pulse firmlyon the evolving consumer needs and aspirations across the diverse tapestry of 17 stateswhere we operate your Company is well placed to shape as well as harness the unfoldingconsumption story in newer locations even as we continue to delight customers in townswhere we have been present for long.
That said we are aware of course that the growing interest and foray of manyorganised retail players both regional and national into markets where V-Mart hastraditionally focussed has intensified
But that only goes to establish more firmly the case for untapped opportunity andpotential in these markets a theme that remains topmost on our strategic radar.
Focussed on this opportunity and aided by the first-mover advantage in these marketswhich means we understand the consumer better than others have a tried-and-testedsourcing supply chain and expansion model and are therefore better positioned todeliver on evolving customer needs and aspirations.
Moreover the differentiators we have built over the years driven by internalcapabilities and processes and by consistently accumulating customer trust and loyaltygives us a sustainable advantage amidst growing competition.
Pursuing ethical profitable growth
Our distinctive value-centric business model is focussed on the entire stakeholderecosystem putting shared and ethical value creation as its guiding philosophy. Thismeans we operate our business and conduct our relationships with all stakeholders customers employees vendors investors and local communities with equalcommitment and focus.
Over the years this philosophy has been unwaveringly applied through a proven trackrecord of strategically scaling our capabilities and processes to harness the potentialof new markets while consolidating our presence in existing ones.
Having established our market- leading presence in Tier II towns it has been ourendeavour to penetrate the Tier III and Tier IV towns with equal success. Our expertiseand experience give us a cutting-edge advantage in delivering the best product and thebest fashion at the best price. It has lent us the strategic understanding that enables usto connect with the needs of the new-age customers who aspire to live better explorepossibilities and spend wisely. This is a class of consumers in smaller towns who preferthe touch and feel' shopping experience in a comfortable retail mall-likeenvironment and for whom buying fashion apparel for themselves and their family is amuch-awaited and carefully budgeted occasion of celebration. While shopping they chooseaffordable products that excite them and make them feel good. We have long observed thatthis is a class that does not want to dig too deep into their relatively smaller walletswhile experimenting with fashion. Now thanks to high awareness because of easy access todigital media these aspirational consumers in smaller towns have a growing urge to beseen as early fashion adopters in their peer group just like their counterparts in metrosand bigger towns.
We are continuously relooking at and reimagining our value-creation approach to makeour business strategy more relevant to evolving customers who seek lesser mind-to-markettime and faster delivery of newer fashion. We have structured our strategic approach togive them all this thus making them visit our stores more frequently to satiate theirfashion needs and feel more connected with V-Mart as a fashion destination of choice. Weare also cognizant that though these customers do not prefer the e-commerce route tobuying fashion goods they want a seamless digitally-driven brand experience. We arethus designing a 360-degree omnichannel experience seamlessly integrated with and acrossthe entire customer lifecycle. Taking a strategic stance we foresee the digitallyconnected and informed consumer landscape as an opportunity through which excitingpossibilities exist to create more value for all stakeholders.
Roadmap for growth
Quite evidently the market opportunity in affordable fashion segment is large andexpanding as the migration of customers from unorganised to organised value retailing foldis accelerating. While we have to be continually ready to leverage this opportunity wemust also respond to a dynamic environment that is witnessing growing competitor presencemore fashion-ready' consumers and the unlocking of aspiration to consume in TierII III and IV towns. Looking ahead at how the consumption story is unfolding in ourtarget markets and consumer segments we have put together a strategic roadmap that isresponsive and adaptable and equally also aligned with our vision and mission.
There are three defining elements of this strategic roadmap. One we are preparing tobe more customer- centric by designing processes and nurturing capabilities that make usmore agile and responsive to evolving customer needs. Driven by this intent there is anincreased thrust on making our buying and planning processes more aligned with regionalfashion tastes and preferences. Two we are focussing on making our hardware' i.e.the organisational structure supply chain logistics and technology backbone more robustand future-ready to support scalable growth and expansion into new markets and enhancedata-driven decision-making. This has translated into investments in setting up anorganisation-wide data analytics platform preparing to add a second warehouse closer toour eastern markets and a fully-integrated CRM and customer loyalty platform. And threewe are equally focussed on reinforcing the software' i.e. beefing up our leadershippipeline and middle management capabilities and reinforcing organisational culture andvalues that guide us like a beacon in what we choose to do and how we do it.
We understand that as a pioneer in the value retailing space in India we have anenduring responsibility towards all stakeholders to stay committed and focussed on ourvision. This reflects in our uncompromising approach to maintaining product qualityaccelerating the past CAGR growth at a consistent pace retaining our balance sheetstrength and engaging deeply with local communities where we operate. Driven by anenduring vision we have to navigate through a rapidly-changing business consumer andcompetitive landscape. In this endeavour instead of being reactive we are taking alonger-term view on how we chart our path and the steps we must take to fully unlock ourpotential.
Priorities for the future
We believe that driven by our strategic roadmap sustained efforts to build internalcapabilities and organisational structure improve processes and systems through advancedtechnology and digitalisation investments in talent pipeline and increasing costefficiencies will propel us on a faster growth trajectory. While growth is a priority wecontinue to temper our targets with caution as we are clear that we want to createsustained value for the entire ecosystem.
With customer-centricity as a core value customer satisfaction and retention is animportant growth driver for us and we aim to be an industry-leading benchmark on thisparameter. Our customer focus has consistently yielded strong benefits for us asmanifested in the addition of many new customers even during the post demonetisationperiod. Our strong loyalty programme coupled with small but engaging marketinginitiatives with local communities is powering customer accretion. We believe our brandequity is helping us create a powerful customer pull and thus continue to invest in ourbrand building exercise. We have positioned ourselves as a family-focussed trusted valuefashion provider a positioning that is resonating well with aspirational customersin smaller towns and has encouraged us to establish our presence in remote places likeTejpur (Assam) and Jowai (Meghalaya).
Going forward we shall continue to equip and empower ourselves for the next phase oftransformational growth in which digitalisation will play a key role with both ourcustomers and employees largely coming from a young and rising India. Another keydifferentiator for our business will be People who we see as an important partner in ourgrowth plans. As we press the pedal on our expansion plans we are taking our peopleempowerment plans to the next level and have recently implemented an organisation-wide HRmanagement software platform to deliver exceptional employee experience to our vastlydistributed workforce.
The prospects ahead are promising especially in the Indo-Gangetic plain where we seesignificant growth opportunities propelled by new consumption patterns. Our two biggestmarkets Bihar and Uttar Pradesh look particularly promising in the region where we willcontinue to follow our cluster-based expansion strategy opening new stores in the samevicinity of nearby towns and cities where our brand salience and presence is high. Lastyear we opened stores in three new states and this exploration of opportunities andsetting up signposts in new or even unfamiliar markets will continue.
The growth strategy we have mapped for ourselves will in my view steer ussuccessfully towards higher and sustained value creation for all our stakeholders. Thestakeholder trust and confidence we have earned is owing to our transparent prudent andholistic approach and will continue to drive our onward journey of collective progressfor all of us.
Chairman and Managing Director