“We are predominantly priced at sub-Rs 1,000. We really don’t sell a lot of products above Rs. 2,500, but even from a Rs 1,000 benchmark perspective, where the earlier GST rates were 12%, and which have now got reduced to 5%, so that’s a substantial saving for our customers. So, the biggest sweet spot for us is to play around that price point of Rs 1,000 and as we move ahead, I think we will now want to explore more offerings in that segment,” he added.
Speaking on competition, Agarwal acknowledged rising intensity with more domestic players entering the market.
“The competition intensity has definitely been on the upswing… There’s a lot of unorganized retail, which is getting converted into organized retail, and that is giving birth to a lot of opportunity for all players. So, we have not lost market share. We have, in fact, gained market share. We plan to open at least 65 new stores this year. And every year we should be looking at a stable growth rate…,” he said.
The digital business, while small at under 5% of total revenue, is also improving. Losses have dropped by 50% year-on-year, Agarwal highlighted, adding that the company anticipates digital contribution margins to turn positive soon.
“So, digital is currently less than around 5% of our total business. We primarily operate in the tier 2 tier 3 towers of India selling apparel at an average selling price of around Rs 350 and that price point digital really does not make a lot of sense… The focus area still remains the offline business but we are still investing in digital… I think we should see good amount of profitability and growth in the digital sector…,” the CFO added.
On Sept. 25, V-Mart Retail Ltd. shares closed at Rs 723.15, up by 0.86%. In contrast, the Nifty 50 index declined by 166.05 points, or 0.66%, ending the session at 24,890.85.
