Dollar Industries Aims To Boost Online Sales Even As It Expands Offline Reach
Dollar Industries aims to increase the share of e-commerce in its sales from 2-3% now to 5%, says Managing Director Vinod Gupta.
Dollar Industries Ltd. is focusing on scaling up the share of e-commerce in its sales even as the maker of underwear expands its brick-and-mortar retail footprint.
E-commerce represents only 2–3% of the company's total turnover, Managing Director Vinod Gupta told BQ Prime in an interview. The company's first target is 5%
The company will also look to acquire more shelf space in retail stores to compete with smaller regional players and other brands. Dollar Industries plans to increase reach from 1.25 lakh retail stores to 4 lakh in the next two to three years.
Already implemented in six states, that initiative has helped double their contribution to its domestic sales rose to 19%. The management expects to add 140 distributors in the ongoing financial year 2024 alone.
The athleisure segment is also making a significant contribution to the company’s revenue, according to Gupta, with a 13% contribution in FY23 and an expected growth of 35–40%. Dollar Industries is targeting to the share of this category at least 30%.
The company is currently short on material for this line as it sold the majority of the stock in the ongoing first quarter of the financial year itself, he said.
Dollar Industries has a 15% market share in India's fragmented hosiery sector with organised, unorganised, and regional players.
Cotton Prices Ease
The company's revenue growth has been volatile in the last three fiscals at 7% in FY21, 29% in FY22, and 3%–4% in FY23. Gupta attributed that to the high cost of cotton, which prompted retailers and distributors to curtail orders. High input costs also ate into its profits.
The high-priced inventory has since been sold in the fourth quarter ended March, eliminating its impact on the current financial year, according to Gupta. Since the company's products are indispensable to day-to-day living, demand will remain steady, he said.
Cotton prices have fallen off their peak to an average of Rs 55,000–60,000 per candy, according to Emkay Research. The government of India, too, recently increased the minimum support price of cotton 7%–9%.
Gupta said these factors will help the company be prepared for cotton prices of around Rs 60,000 per candy and manage inventory to maintain their target operating margin of 12%–13%.
Watch the full interview here:
