Mothercare, Shopper's Stop team up for India foray

Mothercare, Shopper's Stop team up for India foray

Author | Source: The Economic Times | Tuesday, Oct 31,2006 9:26 AM

Mothercare, Shopper's Stop team up for India foray

Mothercare is a brand that "travels well", says Ben Gordon, global CEO of the British child and maternity products brand, which has been around since the 1960s. The brand now has a presence in 36 countries and is in the middle of implementing its big push into India in an exclusive partnership with Shopper's Stop.

For Mothercare, business in the UK has been flat with a growth of barely 1.5-2%, most of the excitement is from international markets where revenue has grown at 28% in the last six months.

In a free-wheeling chat with ET, Mr Gordon spoke about the challenges of growing the brand globally as well as Mothercare's plans for India. Currently, the key growth drivers for Mothercare are markets such as the Middle East, Russia and Greece. India is currently a nascent story. However, the company is looking at India as one of the future growth markets along with Indonesia.

With a total of 8 stores in the last 5 months, India for Mothercare is the largest growing market. The company had originally planned 40 stores in five years, which may now go up to a hundred now, says B Nagesh, managing director and CEO, Shopper's Stop.

India is also a large global manufacturing base for Mothercare. An astounding 90% of the brand's global sourcing for the company happens from India and China. So, while India has been manufacturing Mothercare products for the last 8 years from the company's hub in Delhi and Tirupur in Tamil Nadu, the brand was launched in the Indian market only in April '06.

He also further added that the products in India were initially priced at levels lower than the UK. That has now changed implying that that they are now at a perceived value which is about the same as the UK, he said. The company expects to breakeven in the first year of operations in India. "The advantage in India is that brand is well-known because customers have been exposed to it in markets like Dubai, Hong Kong and the Middle East," says Mr Gordon. Products are being indigenised for Indian needs, he added.

Though the response has been encouraging for the first few months, Mothercare will have to prove itself in the long run by competing effectively with cheaper Indian brands. Some of these labels are also currently being sold at the Shopper's Stop outlets.

Mothercare has chalked out plans for a big overseas push with 50 international stores scheduled to open in the next few months. It has already opened 34 stores outside the UK this year, including its 300th overseas shop in Russia.

In India, it has eight outlets - four in Mumbai and one each in Pune, Hyderabad, Bangalore and Chennai. The baby market for SEC AB Urban India is estimated at Rs 1,500 crore, and the market is likely to grow at 13%. Currently, the Indian baby care market is dominated by mom & pop stores, and there is very less awareness about branded products.

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