Mothercare plans to expand in India

The Indian arm of the UK-based retailer for expecting mothers and kidscare Mothercare Plc is on an expansion mode in India.

The company's exclusive franchisee here, Shoppers' Stop, is now expanding the retail network to 14 stores at a combined investment of about Rs 9-10 crore in four months.

Since its entry in April this year, Mothercare has opened three franchisee outlets at Shoppers' Stop in Mumbai and one each in Bangalore, Hyderabad and Pune.

After receiving encouraging response from customers in these cities, the company is gearing up to open five more stores by the end of December this year and another three by the end of March 2007.

The first year of its operations in India will see Mothercare occupy a retail space of 45,000 sq ft in the country, Rajiv Nair, business head, Mothercare India, said.

"We have planned multiple sales channels in the country. In the first instance, we opened shop-in-shops at Shoppers' Stop stores and now we will open a few large format stores, where the entire investment is being done by our franchisee. This will give us wide visibility for our brand," Nair told Business Standard. The product development will be done by Mothercare Plc.

The new stores will be in cities such as Bangalore, Chennai, Hyderabad and Ahmedabad in the next four months, Nair added.The company has been importing the furniture and interiors for its shops and in the second phase of expansion plans to use materials sourced within the country.

According to Nair, "The babycare market in India still largely falls in the unorganised segment. What is known is that demand is huge but there is no hard research determining the size."

According to a study conducted by KSA Technopak for Mothercare in India, the total organised and semi-organised market for maternity range of products, infant and toddler care including apparel for kids up to 8 years of age, is in the range of Rs 5,100 crore in India and growing at 12-13 per cent annually.

The company aims to capture a sizeable portion of this market in the next few years and is targetting an annual sales of Rs 110 crore during the fourth year of its operation in India.

By the end of its first year of operations in India ending April 2007, Mothercare is expecting a business of about Rs 40-75 crore. He said the company was targeting a network of 40 stores at least in the next four years.

It also plans to increase local sourcing from 30 per cent 50 per cent next year. It is currently importing some products from over 13 countries in Europe and China.

As of now, it is procuring apparel from manufacturers in Tirupur, Coimbatore in Tamil Nadu and Ludhiana in Punjab.