Financial Daily from THE HINDU group of publications
Tuesday, Nov 08, 2005
Financial Daily from THE HINDU group of publications Tuesday, Nov 08, 2005 |
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Marketing
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Strategy Benetton plans exports from India, to expand in tier-2 cities Nina Varghese
Chennai , Nov. 7 BENETTON has started test marketing its branded garments manufactured in India in other Asian markets as a prelude to regular sourcing from here, said Mr Luciano Benetton, Chairman, Benetton Group. Mr Benetton told Business Line that the initial response in these markets was positive. The company plans to double its production in India and aims to grow by about 30 per cent. The garments are mainly of cotton, silk and linen. Knitted garments are manufactured in-house and wovens outsourced. Benetton has a network of 59 vendors in India. Mr Benetton said the next growth area would be Asia, with India and China being the drivers of this growth. He said Europe is saturated and growth from this region has been stagnant. According to the company's Web site, in 2004, Asia contributed to 10 per cent of its revenue, Europe 85 per cent, America one per cent and the rest of the world four per cent. The increased production will also supply the company's retail outlets in India. The company also plans to double its retail footprint in India to 100 stores in three years. The growth will be mainly through the franchisee mode (95 per cent of the Benetton stores worldwide are franchised), he said. The expansion will be mainly in the secondary cities in India. The styles and colours for each season are designed at the company headquarters in Treviso in Italy and manufactured mainly in Italy and other parts of Europe. Mr Benetton said the Italian character is seen in the style, quality and design of the company's brands (United Colors of Benetton, fashion oriented Sisley, leisurewear Playlife and Killer Loop street wear). According to the company's Web site, in 2004, United Colors of Benetton, its main brand, accounted for 51 per cent of the turnover, while Playlife and Killer Loop brought in 3 per cent. Sisley contributed 20 per cent and UCB Kid 26 per cent. The Benetton Group is present in 120 countries around the world — a retail network of about 5,000 stores and a turnover of 1.7 billion euro.
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