How This Swimwear and Sport Shoes Firm Grew Its Business Model in India
Aditya Bafna, MD, Element Retail, credits his analytical approach towards business behind his growth and success, whether it is identifying the right business or running it efficiently.
Aditya Bafna believes in setting his own success mantra. The Business Management graduate from London zeroed in on a tieup with the fitness brand Speedo after thorough research on the growing business models in India. Impressed with his dogged persistence, Speedo agreed to a franchise partnership with Bafna in 2014. Bafna, who still operates his family business of automobile dealerships across Maharashtra, has grown Element Retail along with Varun Bagadiya into the category leader in swimwear and sport shoes segment. He also secured a licence from Giant bicycles.
Coming from an automobile business background, what were the major challenges during the first year of your operations in retail?
First year was a great learning experience. The business dynamics in retail are quite opposite to that of automobile business where products are high-valued and models don’t change quite often. Fitness retail is quite dynamic with low ticket price of Rs 1500- 2000 and frequent style changes every season. The biggest challenge was to keep the right inventory as per people preferences in terms of styles, colors and sizes. It is crucial to have a fair understanding of the fashion trends in your local area.
More importantly, Speedo is a seasonal brand and observes low traction during winters and early monsoon. Hence, we were left with a lot of unsold inventory.
So how did you manage those challenges?
Brands can provide you national or regional perspective, however business dynamics change locally. Hence, we kept on observing the people buying behaviour. We observed that people in Bandra have a flamboyant taste and like bright colours, and buyers in Lower Parel have subtle taste. You really have to notice people on what they are buying. We invested on MIS system to build data on customer buying behavior. This way, you would not have any dead inventory and will be able to rotate your money. The more rotation you have the more profit you will make. Hence, the key is to sell more at the apt period when people are ready to buy. Now, we have an MIS person at every store. That may sound too much, but it helps to manage the inventories quite well.
You have been associated with brands like Speedo, Asics, Apple and Giant bicycles. Please talk about your experience with brands?
Besides focusing on the leaders, we partnered with brands at their early stage in India. We opened the first outlets for Asics and Speedo in India. Being associated with many brands in the fitness industry, we are aware of the shifting trends. It has also enabled us to understand how brands operate. We understand that Japanese brands like Asics are highly focused on their products and not on marketing. On the contrary, American brands like Apple focus on marketing in a big way. Hence, we can devise our strategy at the local level accordingly. With our customer-focused approach, we have grown our retail footprint to over 19 stores. We now have 9 Asics stores, 4 Speedo, 2 Jockey, and one each for Apple and Giant. In fact, Asics has recognized us as the most efficient partner in India.
What are the benefits and challenges of building a multi-brand and multi-unit franchise?
Every brand works in its own style, hence devising a strategy for each brand separately is a challenge. We need to capture customer behavior for each brand and keep inventories, which requires a lot of manpower. The benefit is that you are well placed in the segment. With our partnerships in fitness domain, we can leverage cross-branding and cross-marketing to increase overall sales. Simultaneously, we can leverage on the data insights for a brand to other similar brands.
(This article was first published in the August 2019 issue of Entrepreneur Magazine. To subscribe, click here)