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Fab India Case Study Essay

FAB INDIA Company profile • History In 1958, well before American companies were sourcing from India, John Bissell left his position as a buyer for Macy’s New York to work as a consultant for the Ford Foundation in order to develop India’s export potential in its emerging textile industry. What Bissell discovered was a village-based industry with a profusion of skills hidden from the world. Determined to showcase Indian handloom textiles while providing equitable employment to traditional artisans, Bissell established Fabindia in 1960 in order to fuse the best aspects of East/West collaboration.

Fifteen years later the first Fabindia retail store was opened in Greater Kailash, New Delhi with a range of upholstery fabrics, durries and home linens. By the early eighties, we started producing garments made from hand woven and hand block printed fabrics. Over the years the focus of Fabindia’s marketing shifted from exports to the local Indian retail market. What started as an export house has today become a successful retail business presenting Indian textiles in a variety of natural fibers, and home products including furniture, lights and lamps, stationery, home accessories, pottery and cutlery.

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Extending this partnership to the farmers in rural areas, Fabindia launched its organic food products range in 2004. Fabindia’s authentic Personal care products range is also being launched at all Fabindia outlets. Today they have retail outlets in all major cities of India – 110 at last count – in addition to international stores in Dubai, UAE; 3 stores in Bahrain; Doha, State of Qutar and Rome, Italy. • Vision and Mission Fabindia believes that it does more than just collect and sell handicrafts. It sees itself as an enabler of a certain way of life. By doing its business n a certain way, it is trying to demonstrate that the urban living model is not the only path to development for a society. It istrying to prove that old patterns of living do not have to be sacrificed forthe sake of modernization and development. Gandhiji had a vision of an India built around its villages but the model of development followed in India and elsewhere led to the growth of an urban centric economy. Fabindia is trying to present an alternate vision. Growth of urban areas does not necessarily mean the death of the village. One is not necessarily better than the other. Both need each other.

There exists a symbiotic relationship. Long before corporate social responsibility and eco-friendly business practices were seriously talked about in management, Fabindia practised these concepts. production of organic products, bringing out the village based skills which were hitherto hidden from the world, providing equitable employment to traditional artisans and market for their products, enabling the rural craftsmen to form self sustaining community based organizations and promoting natural dyes, natural fabrics, etc, were some of its activities symbolic of its socially responsible and ecofriendly practices. Future From a turnover of 36 crore rupees in 2000-01, Fabindia has grown to having aturnover of Rs. 130 crore in 2005-06. It registered a CAGR of about 38% in the period 2002-06. Such phenomenal growth has not come at the cost of profits. The profitability has been maintained at a rate of 6% for the entire period. For Fabindia William Bissell has set a very ambitious target of reaching 250 stores and a turnover of Rs. 1000 crore by 2011. The growth is expected to come from new stores as well as increase in sales from existing stores.

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That increase will be achieved by increased emphasis on premium products. Also, Fabindia has attempted to decrease its dependence on fabric based businesses by increasing its other product lines. Currently organic foods, body care products and handicrafts form a significant part of its total sales. Growth in locations was expected to come from expansion in promising overseas markets as well as a greater penetration of the markets in smaller towns in India. Fabindia planned to expand significantly in tier-II and tier-III cities in India. • Products

The product range consists of garments for men, women, children and infants; garment accessories; home furnishings – bed, bath, table and kitchen linen, upholstery fabric, curtains, floor coverings and a range of non textile products like furniture, lights, lamps and stationery. In addition to handcrafted clothing and home furnishings, Fabindia’s product line includes organic foods and personal care products. Fabindia Organics carries several types of cereals, grains, pulses, spices, sugar, tea, coffee, honey, fruit preserves and herbs.

Fabindia Sana- Fabindia’s range of authentic bodycare products includes soaps, shampoos, hair oils, pure oils, moisturisers, body scrubs, face packs, hair conditioners & special skin care products. It also designes a line of trendy and informal wear for youngsters under the brand ‘Teen Spirit’. ” • Presence in India and the world From a turnover of 36 crore rupees in 2000-01, Fabindia has grown to having a turnover of Rs. 130 crore in 2005-06. It registered a CAGR of about 38% in the period 2002-06. Such phenomenal growth has not come at the cost of profits.

The profitability has been maintained at a rate of 6% for the entire period (See Figure- 2). For Fabindia William Bissell has set a very ambitious target of reaching 250 stores and a turnover of Rs. 1000 crore by 2011. The growth is expected to come from new stores as well as increase in sales from existing stores. That increase will be achieved by increased emphasis on premium products. Also, Fabindia has attempted to decrease its dependence on fabric based businesses by increasing its other product lines.

Currently organic foods, body care products and handicrafts form a significant part of its total sales. Growth in locations was expected to come from expansion in overseas markets as well as a greater penetration of the markets in smaller towns in India. As mentioned earlier, Fabindia planned to expand significantly in tier-II and tier-III cities in India. India has a flourishing retail business but most of it is in the unorganized sector. There are estimated to be over 120 lakh stores in the country. Of this, organized retail is only 3% but is growing at the rate of 18%.

This organized retail sector is vying for a share of the spending of India’s rapidly growing middle class whose purchasing power is estimated to be around Rs. 10 lakh crore. An estimate made by a professional demand forecaster shows that out of the total retail business potential, the Indian market for ethnic wear is likely to be a about Rs. 9000 crore. For geographies outside of India, there is a strong mysticism about Indian culture and hence the products reflective of Indian folk art hold great potential in those markets.

Given the over 8% growth in the Indian market and an upwardly mobile India consumer, it was quite clear that product and services enable a customer to make a statement, are going to grow in volume and value. The question before Fabindia Management is that of making Fabindia product exclusive or mass product. If he decided to make it exclusive, then it will have to look at issues of product design, store layout and even the store ambiance. Increasingly, its competitors were using ethnic themes for their store layouts as also for designing garments exhibits. Online shopping presence Fabindia extends its international presence to new delivery destinations for online orders. Now people can shop from different destinations in the world, and Fabindia will deliver their order. These global destinations include Australia, Bangladesh, Belgium, Canada, Denmark, England, France, Germany, Greece, Holland, Hong Kong, India, Indonesia, Italy, Japan, Malaysia, Mauritius, Mexico, Nepal, Northern Ireland, Philippines, Portugal, Scotland, Singapore, Spain, Sri Lanka, Switzerland, Sweden, Taiwan, Thailand, U.

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A. E. , USA and Wales. • Manufacturing and sales facility |Fabindia does not have a company owned production unit. Our mission has always been to work with village-based | |artisans across India employing their regional textile skills and specialities. This commitment has helped preserve | |the traditional crafts of India and created employment opportunities in rural areas. Fabindia sources its products | |from over 40000 craft persons and artisans across India.

We support the craft traditions of India by providing a | |market and thereby encourage and sustain rural employment. Today we have retail outlets in all major cities of India | |- 110 at last count – in addition to international stores in Dubai, UAE; 3 stores in Bahrain; Doha, State of Qutar | |and Rome, Italy. | | |

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Fab India Case Study Essay
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FAB INDIA Company profile • History In 1958, well before American companies were sourcing from India, John Bissell left his position as a buyer for Macy’s New York to work as a consultant for the Ford Foundation in order to develop India’s export potential in its emerging textile industry. What Bissell discovered was a village-based industry with a profusion of skills hidden from the world. Determined to showcase Indian handloom textiles while providing equitable employment to traditional
2018-10-22 04:58:33
Fab India Case Study Essay
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