One of the first apparel groups to go online during the pandemic, Arvind Fashions has launched ‘specially made units’ or ‘SMUs’ to focus on e-commerce operations.
SMUs guarantee full price for garments
As per Kulin Lalbhai, Director, these units will help the company design and sell garments at full price by leveraging data and consumer insights generated by e-commerce channels. During the year ended March 2021, the company’s online channel’s revenues doubled to Rs 705 crore compared to previous year. They also increased their share in the company’s total sales from 14 per cent last year to 32 per cent during FY21.
Of the total online sales generated by Arvind Fashions this year, 35 per cent came from direct-to-consumer channels such as its portals nnnow.com, while the remaining came from third-party portals including Flipkart. Arvind Fashions has had a tie-up with Flipkart for around seven years via various brands such as Flying Machine. The company also received Rs 260 investment from Flipkart for its subsidiary Arvind Youth Brands after the first lockdown. It now plans to launch specially curated products for the online channel to boost profit margins, adds Lalbhai.
Quicker business to cash conversion
Another reason, Arvind Fashions aims to focus exclusively on online business is the speed of this business, says Lalbhai. Each process in this business from receiving orders to being paid for their completion is quicker. The clothes are made as per orders and shipped immediately. Manufacturers also receive their payments on time due to faster cash conversions, adds Lalbhai who focuses on flexible production with low volumes for this business
Even though the company is bullish about online growth, it is not completely ignoring brick-and-mortar stores. The company’s offline retailers plan to open stores gradually in the first week of June, shut since April to control the spread of the second wave in India.
