In an interaction with businessline, Bata India MD & CEO Gunjan Shah said that there was accelerated momentum in the March quarter driven by mid-single digit volume growth. While closely monitoring the impact of the West Asia conflict, the footwear major remains steadfast on its premiumsation and retail expansion strategy. Edited Excerpts:
What has been the impact of the West Asia crisis and have you had to take price hikes ?
Despite uncertainties, our job is to make sure that we stay on the course in terms of our expansion strategies. We are closely monitoring the situation and it all depends on how long the West Asia crisis lasts. If it goes on for a longer period then there could be some supply disruptions because a lot of raw materials and derivatives of petroleum and crude oil are imported by India. There could also be emergence of inflationary challenges. On our part, we have taken various measures including building up on our inventory. Right now, I think we are sitting in a reasonably good position but we need to wait and watch. As of now we have stayed away from any price hikes but both the product and the finance teams are looking at this situation very closely, so that we make the right decisions at the right time.
How was the performance and volume growth in the March quarter ?
We witnessed a broad based growth. The initiatives that we’ve been working on for the last almost four-five quarters have finally started showing an impact. Our full-price sales were at its highest levels ever at close to 90 per cent of our business. We also recorded a mid- single-digit volume growth. Premium portfolio, led by Hush Puppies and Power, continued to outpace overall growth. Growth in digital commerce, as well as the expansion into the hinterland continued at a good pace.
We did see an impact due to one-time expenses related to Voluntary Retirement Scheme, which is aligned with our long-term efficiency strategy and provisions made for non-cash forex loss due to currency fluctuations. But besides that, I think we had decent operational results as we saw sequential improvement in momentum with March performance being stronger than January. We have also significantly amped up our marketing investments over the last two quarters and we remain steadfast on that commitment that we will invest behind our brands.
What will be the key focus in terms of strategy in FY27 ?
After we have crossed the 2,000-stores retail network milestone, we want to push towards 3,000 stores in the next 3-4 years. So that expansion agenda will continue even more aggressively going forward. The e-commerce business has been our fastest growing business in strong double digits for several quarters now. We will continue to strengthen that with the omni-channel initiative that we have rolled out across a large network as it gives us competitive advantage. We are also strengthening our premiumisation strategy backed by solid marketing investments.
Has quick-commerce become a more significant channel with the entry of new players ?
We expect the overall e-commerce channel to continue growing at a much faster pace. We expect digital commerce to contribute almost 20-25 per cent of our business in the next 2-3 years. So, a significant chunk of growth will come from digital commerce. Within that, e-commerce will have different models. We are leveraging our large retail network which gives us a key advantage. We have the ability to serve from over 2,000 stores and are much closer to the consumer in swifter deliveries and we are already collaborating with platforms in this regard.