{"id":4359,"date":"2022-06-24T08:32:00","date_gmt":"2022-06-24T08:32:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=4359"},"modified":"2023-11-05T10:19:14","modified_gmt":"2023-11-05T04:49:14","slug":"with-house-of-brands-model-abfrl-eyes-foray-into-d2c-market","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/with-house-of-brands-model-abfrl-eyes-foray-into-d2c-market\/","title":{"rendered":"With \u2018house of brands\u2019 model, ABFRL eyes foray into D2C market"},"content":{"rendered":"\n<p>Written By <a href=\"https:\/\/www.financialexpress.com\/author\/christina-moniz\/\" target=\"_blank\" rel=\"noopener\">Christina Moniz<\/a><\/p>\n<p><i>Prashanth Aluru, a former Facebook and Bain hand, will be behind the steering wheel for this venture<\/i><\/p>\n<div class=\"row\"><div class=\"col-sm-6\"><img decoding=\"async\" data-src=\"https:\/\/www.thirdeyesight.in\/wp-content\/uploads\/2022\/10\/aditya-birla-1.png\" class=\"img-fluid lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\"><\/div>\n<div class=\"col-sm-6\"><p>The Aditya Birla Group has just announced the launch of its \u2018house of brands\u2019 business entity, TMRW, to support digital fashion and lifestyle brands. TMRW, which will operate as a wholly owned subsidiary of Aditya Birla Fashion &amp; Retail (ABFRL), aims to build and buy over 30 brands in the next three years, the company said in a statement.<\/p>\n\n<p>With this move, the company expects to make its entry into the D2C market, which is expected to be reach $100 billion by 2025. \u201cWhat a brand like Shoppers\u2019 Stop does in brick and mortar, ABFRL is doing online. While in the past, the company was known for certain brands, it is now pivoting itself towards a wider pitch with bigger variety of brands that could potentially appeal to a wider range of consumers,\u201d said Ankur Bisen, senior partner and head, food and retail, Technopak Advisors. The launch could be ABFRL\u2019s next step in positioning itself as a fashion major, he said.<\/p><\/div><\/div>\n\n<p>Prashanth Aluru, a former Facebook and Bain hand, will be behind the steering wheel for this venture.<\/p>\n\n<p>ABFRL will compete with start-ups like the Good Glamm Group and Mensa Brands, among others. The number of D2C brands and online sellers in the country have grown over the last couple of years, and experts believe that TMRW could be the company\u2019s endeavour to become relevant to new-age consumers. Brands like Reliance Retail and Myntra are going down the same path, says Bisen.<\/p>\n\n<p>The opportunity is immense; according to a report by IMARC Group, the Indian textile and apparel segment reached $151.2 billion in 2021 and is set to grow at a CAGR of 14.8% between 2022 and 2027.<\/p>\n\n<p>ABFRL, which has a network of over 3,300 stores across India, is home to brands like Pantaloons, Van Heusen, Louis Philippe and Allen Solly, and has partnerships with labels like Forever 21, American Eagle and more recently, Reebok. The retail company has also forayed into the ethnic wear business and has forged strategic partnerships with designers such as Sabyasachi, Masaba and Shantanu &amp; Nikhil.<\/p>\n\n<p>Having reported losses for the last three years, the company narrowed its losses to `108.72 crore in FY22 on the back of revenues of `8,136.22 crore. The company reported a 55% surge in revenues during the last fiscal. While Madura Fashion &amp; Lifestyle contributed 68.4% to the company\u2019s FY22 revenue, the remainder 31.6% came from Pantaloons, according to Bloomberg data.<\/p>\n\n<p>Ambi Parameswaran, author and founder of Brand-Building.com, said ABFRL has already built a good retail presence for the brands in its portfolio. \u201cThere must be significant synergies at the back end, but the brands are managed separately,\u201d he said. \u201cI suppose the new venture, TMRW, will offer all these brands as well as all the other ethnic brands that ABFRL has acquired in the last three years.\u201d<\/p>\n\n<p>He said the synergies will probably lie at the back end with supply chain, logistics, finance and HR. However, the brands will most likely be given the space to build strong individual identities.<\/p>\n\n<p>This is not the company\u2019s first foray into the e-commerce space. ABFRL shut down its e-commerce venture, ABOF (All About Fashion) in 2017, though in August last year, it said the brand would be made available on Flipkart and Myntra.<\/p>\n\n<p>A concept like \u2018house of brands\u2019 is potentially beneficial to both \u2014 the large conglomerates and also to the smaller, emerging brands that are acquired. In a D2C framework, niche brands that would otherwise find it difficult to navigate the established multi-layered distribution and retail channels see greater feasibility in connecting with their customers directly through digital channels.<\/p>\n\n<p>According to Devangshu Dutta, CEO of retail consultancy Third Eyesight, this makes it viable to launch a product range, which would not be immediately entertained in established channels, and allows them to retain their distinctiveness. With the passage of time and with their growth, some of these brands could also expand into established modern retail and traditional retail formats and to a more mainstream audience.<\/p>\n\n<p>\u201cLarge companies, on the other hand, can find it difficult to grow their existing brands beyond a certain pace, and often may not be able to break new ground in terms of product development and customer experience. At some point, inorganic growth by acquiring other businesses and brands becomes an important element of their strategy,\u201d Dutta said.<\/p>\n\n<p>The house of brands model, to be sure, comes with its fair share of challenges. Angshuman Bhattacharya, EY India partner and national leader \u2013 consumer products and retail, said the strategy must have clear synergies from an operations and distribution perspective. \u201cPossible challenges could emanate out of the non-compatibility of categories with the distribution. Another potential challenge could be in supporting multiple brands with marketing investments, failing which the realisable value envisaged during acquisition could stay unfulfilled,\u201d Bhattacharya said.<\/p>\n\n\n<p>The other downside, as Dutta pointed out, is that over time there is consolidation of market power within a handful of companies. This has happened across the globe and across sectors, and can negatively impact consumer choice, supplier dynamics and pricing.<\/p>\n\n<p>Source: <a href=\"https:\/\/www.financialexpress.com\/brandwagon\/with-house-of-brands-model-abfrl-eyes-foray-into-d2c-market\/2551487\/\" target=\"_blank\" rel=\"noopener\">financialexpress<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>TMRW, which will operate as a wholly owned subsidiary of Aditya Birla Fashion &#038; Retail (ABFRL), aims to build and buy over 30 brands in the next three years<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[25,708,27,249,33,36,37,3,43,44,46,48],"tags":[685,26,220,100,295,52,53,353,28,600,144,32,239,145,113,191,69,82,670,690,166,256,499,581,70,65,124],"class_list":["post-4359","post","type-post","status-publish","format-standard","hentry","category-apparel","category-beauty-personal-care","category-branding","category-e-commerce","category-footwear","category-lifestyle-fashion","category-marketing","category-press-quotes","category-retail","category-soft-goods","category-strategy","category-textiles","tag-aditya-birla-group","tag-apparel","tag-apparel-industry","tag-brand-building","tag-brand-portfolio","tag-branding","tag-brands","tag-business-strategy","tag-clothing","tag-ecommerce","tag-entry-strategy","tag-fashion","tag-fashion-lifestyle","tag-fashion-brands","tag-growing-brands","tag-indian-market","tag-indian-retail-sector","tag-lifestyle-fashion","tag-ma","tag-mergers-and-acquisitions","tag-modern-retail","tag-omnichannel","tag-online","tag-online-retail","tag-organised-retail","tag-retail","tag-strategy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - 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