The pandemic was a testing time for anyone in retail, perhaps more so for brands in discretionary spending categories. For Archies, the greeting cards to cakes to gifts player, it was a wake up call to focus on its existing online presence. The brand is slowly rebuilding its retail presence as it simultaneously pushes the pedal on online commerce, reveals ED Varun Moolchandani. Edited excerpts.
The first store was launched in Delhi in 1987. The 100th Archies Gallery was opened in 1993. According to the website, Archies currently operates over 230 exclusive outlets in 15 states across 66 cities and nearly 300 franchise outlets across India and neighboring countries. What are the current numbers? When did you start selling online? When was ArchiesOnline.com launched?
That number was before Covid. We have reduced a couple of stores. We are at 125 to 140 now. We are opening a lot of stores in high streets now rather than malls. We are more comfortable with the rent there, the accessibility is more there and it’s more economical. Earlier we used to open 60 pc in malls and 40 pc high street but now we have shifted to 60 pc high street and 40 pc malls. And we are focusing right now majorly on North India. Under franchisees, we are touching 200 stores. We had to do a lot of corrections after the years of pandemic. We have reopened about 18 to 19 stores in the last two quarters majorly in Noida, Gurgaon, Faridabad and Delhi. A couple of stores are coming up in Dehradun and Rajasthan. The major focus will be in North India to bring us back to that 200 number.
We started selling online even before Amazon and Flipkart were around. But now we are revamping our online business, starting last November-December. After Covid, we realised the power of online. Our major emphasis will start from Rakhi this year. We sell our entire range on Amazon, Flipkart, Nykaa, Myntra but consumers shop majorly on occasions through our own website. For regular purchases, people see our website but eventually shop from marketplaces.
What is the turnover and how is it growing? What is the split in overall sales between offline and online today?
Last fiscal we did a turnover of about Rs.98 crore. The revenue has increased (by double digits) and we have booked a profit of about Rs.1.5 cr as compared to the loss of Rs.4 crore last year. So things are shaping up. Consumers are coming, everyday gifting is increasing. Occasions are there, so we are kind of seeing good growth.
We were a retail company and an offline company. Before Covid, we had 240 stores, 300 franchises. Then shut down happened, the lockdowns happened, the odd-even started, the timings were initiated. So it was a bit messed up for offline. It was a tough phase for us, and for all retailers. We learnt a lot also.
The major part is offline. Plus we have set up our manufacturing export business of paper bags and paper products. We have been exporting for the last three years now. We export to entire Europe and America, Africa. That’s also adding up. As for online, we revamped our website then we focused on marketplaces. Currently online is very negligible, but it will start moving from Friendship Day and Rakhi and thereon.
You also sell via marketplaces like Flipkart. What is the contribution from online outside of ArchiesOnline.com?
Major sales are coming from marketplaces only. Everyday consumers see our website but they shop majorly from those marketplaces because those marketplaces eventually give them discounts, offers, schemes and all. On our own website major traffic comes from the occasions, because Archies is all about occasions and celebrations. During those times we have good sales, otherwise everyday business happens from marketplaces – they have about a 75 pc contribution. In the year-end, when we have our Rakhi, Karva Chauth, Christmas, Diwali, New Year, then it becomes about 50-50.
You also have tie-ups with brands like MamaEarth. Can you tell us more about these tie-ups and what are other brands that you have partnered with? Is there a vision to be a marketplace for ‘social expression’ as you call it?
In chocolates we have Ferrero Rocher, Lindt, M&Ms. In pens, we have Luxor, Parker and Submarine. For perfumes, we have got our very own brand coming from Turkey and we have Ajmal. In electronics, we have been selling SaReGaMaPa Carvaan for four years now. We have MamaEarth for two years now. mCaffeine is going to join us soon by the end of this month. Another big tie-up is coming that I can only share in July (for Rakhi and Friendship Day).
Marketplaces sell everything. In our category, we are the leaders. There is a space for our category. We have also tied up with BlinkIt – we have been doing it for the last two months and getting phenomenal results.
Which are the largest markets (Indian cities) for Archies, online and offline? How much do metros and tier 1 contribute? What is the share of tier 2 and 3?
North India is the largest market. Then comes the West – Mumbai, Pune. Then Kolkata and Hyderabad, Bengaluru and Chennai. In other B-towns and C-towns we already have our franchisees. Metros is about 65 pc and the remaining is tier 2 and 3.
Of the 66 cities you have exclusive stores in, how many are in metros and tier 1 and how many in other markets?
65 pc of our stores are in metros. I count Noida, Faridabad, Gurgaon in metros. Nagpur, Raipur, Trichy, Guhawati they come in B category. Madhya Pradesh is B category. Dehradun is also not a metro. Jaipur comes in the metro category.
Is there a plan to expand the retail footprint? If yes, to which cities? Will it be through the franchise route?
We are opening more stores and adding 20 to 25 more franchisees this year. During Covid, we had about 22 stores in the IT parks wherein they have their food outlets and all. So, when everything was shut, it took time to reopen the stores. Now we have opened about 10 to 12 stores. Another 9 to 10 stores are still closed which are expected to open by next month. The remaining stores which were closed due to WFH will eventually start opening in July and August.
North still has a potential. Punjab has a huge potential – Mohali and Chandigarh are big markets. We have a lot to accomplish in terms of expansion. Even in Gurgaon, every month there is a new mall coming up. In all the major centres of Gurgaon, an Archies store is already there. The whole North belt we have to cover this fiscal. Being a Delhi-based company, with our head office in the North, our focus is to reestablish what we had before the pandemic.
Archies today competes in the world of Amazon, Flipkart and Ferns N Petals. Gifting options online are aplenty. How is Archies differentiating itself?
They are all e-commerce guys. We are selling our stuff through them and our website. We have Swiggy Instamart and Blinkit and they also add to the channels. For offline, we have our own store network. We just need to polish all of this.
When did you launch Archies Perfume? How is it growing? How are you marketing it?
We launched Archies Perfume in 2000. It’s been about 23 years and for 10 to 12 years we have been importing everything from Turkey. The same brand, but with a new look and packaging. Perfume is one of the finest categories in gifting for us, be it online and offline because we have established our brand. We are also eco-friendly.
Is there an intent to extend the Archies brand to more categories? If yes, which ones?
We are now focusing more on home decor. There are a lot of things happening. There is one more big thing which will happen next month.
How has Archies marketed itself, historically? With expansion into new categories and growing competition, have marketing spends grown? Do you feel the need for a brand campaign to match the visibility of otters in your categories?
For us, advertising in earlier days was more of organic marketing. We still advertise but now we are more inclined towards social media. We have also started making ads for different occasions that we upload on YouTube as well. For Insta and Facebook, everyday we have a post.
No, we haven’t expanded our marketing spend. Only last year, we got a full fiscal wherein we grew about 10 to 14 pc. America, Europe and Germany are all in recession and I hope it doesn’t come to India. This will be very challenging for everyone. Now the elections are coming. Let’s see how people’s sentiments are. Inflation factor also matters. This is going to be a full-fledged non-Covid year for everyone.
MN4U SYNDICATE
(Feedback: fpjbrandsutra@gmail.com)
