13 August 2024, Mumbai
Delhi-based V2 Retail aims to provide more apparel shopping options to its value-conscious consumers by establishing an online presence by the Q3, FY25, says AkashAgarwal, Director.
The company will use its five Delhi stores to fulfill online orders, with plans to expand to other cities once the model is perfected.
V2 Retail was founded by Ram Chandra Agarwal in 2011, following the sale of his first venture, Vishal Mega Mart, to private equity investor TPG and the Shriram Group for about Rs70 crore due to financial challenges. Using the proceeds, Agarwal built V2 Retail, which now boasts a market capitalization exceeding Rs3,300 crore.
The company's focus on offline operations has significantly boosted gross margins in the last six months. Its rapid product development and ability to quickly adapt to fashion trends have made it a strong player in the value-fashion category. The company’s shift to an omnichannel strategy is aimed at tapping into the growing demand in Tier II and II cities.
Driven by rising disposable incomes and growing consumer aspirations in smaller cities, India’s value-fashion segment is expanding rapidly. The industry is projected to grow at a CAGR of 6 per cent from 2020-25, with the organised sub-sector expected to outpace this at 13 per cent, according to MotilalOswal Financial Services.
While V2 Retail expects its online business to contribute only 1-5 per cent in the short term, it sees online retail as a natural extension of its offline operations, which attract 90,000 customers daily across 141 stores. Fulfilling online orders through physical stores will save the company about 70 per cent in logistics costs.
However, Agarwal acknowledges the challenges of entering e-commerce for products with low average selling prices. He emphasiseson the need to mature the channel before starting marketing efforts.
