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<v Speaker 1>William, Thank you so much for joining us on the

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<v Speaker 1>show today. I think it's a really special occasion to

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<v Speaker 1>be sitting down with you after all these years and

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<v Speaker 1>get to understand the evolution of FAB India, especially in

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<v Speaker 1>the post COVID era. So thank you so much for

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<v Speaker 1>taking the time out.

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<v Speaker 2>It's a pleasure to.

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<v Speaker 1>So Fab India. William has always been a brand that's

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<v Speaker 1>been associated with purpose, with of course, empowering rural artisans,

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<v Speaker 1>with sustainability. How have you managed to ensure that the

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<v Speaker 1>brand maintains its purpose but also aligned to the goals

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<v Speaker 1>of profitability and scaling the business.

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<v Speaker 2>Wow, it's a tough first question. So you know, if

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<v Speaker 2>you look at our journey over sixty five years, that's

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<v Speaker 2>how old we are, and you look at the journey

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<v Speaker 2>of the Indian consumer in the last sixty five years, it's

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<v Speaker 2>been a very parallel track. I mean, we started as

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<v Speaker 2>an export business at a time when India needed the

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<v Speaker 2>foreign exchange and we were an exporter basically providing access

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<v Speaker 2>to artisanal products in international markets. And that was the

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<v Speaker 2>first phase of our growth. And then I sensed that

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<v Speaker 2>there was a growing middle class. This is after the

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<v Speaker 2>reforms of nineteen ninety one, when the economy began to

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<v Speaker 2>open up and there was a resurgence in growth in

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<v Speaker 2>a middle class, and I felt that they wanted an identity.

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<v Speaker 2>So we then pivoted to becoming a retail retailer. And

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<v Speaker 2>they were not many retailers in those days. I mean

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<v Speaker 2>ninety percent or more of Indian goods were unbranded. You know,

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<v Speaker 2>the more elite families, the more affluent families went to tailors.

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<v Speaker 2>Other people just bought unbranded goods at stores. And we

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<v Speaker 2>were the first people, among the first to come up

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<v Speaker 2>with the idea that you could actually go from unbranded

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<v Speaker 2>to branded. That was our retail journey and that journey

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<v Speaker 2>continued for a good fifteen to twenty years. And then

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<v Speaker 2>I felt the need that we really needed to become

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<v Speaker 2>more a lifestyle brand for because India had now emerged

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<v Speaker 2>and was taking its place on the world stage. So

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<v Speaker 2>that was the parallel track. And there was a self

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<v Speaker 2>assurance in people, a security about look we have, you know,

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<v Speaker 2>there was this whole sense that, you know, India is

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<v Speaker 2>an ancient civilization coming of age in the modern age.

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<v Speaker 2>And so we thought that it would be good to

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<v Speaker 2>pivot again from being a retailer to becoming a lifestyle concept.

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<v Speaker 2>And lifestyle is interesting because then because of that, we

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<v Speaker 2>added things like furniture, We added things like organic foods,

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<v Speaker 2>We added all kinds of products, which completed a kind

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<v Speaker 2>of three sixty degree lifestyle offering. So you could, you know,

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<v Speaker 2>wear Fab India, sit on a fab Inda so far

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<v Speaker 2>like you're sitting on have tables, have your wallet from

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<v Speaker 2>fab India, have your giftware from fab India. You know,

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<v Speaker 2>you could express yourself in many different ways years and

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<v Speaker 2>we found that journey really worked for us as a

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<v Speaker 2>lifestyle brand. We made that pivot and now we are

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<v Speaker 2>making really we're in the process of making another pivot,

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<v Speaker 2>and we're just beginning that process. And I think that

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<v Speaker 2>journey is going to be an interesting journey for us.

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<v Speaker 1>So that's what I'm really excited to learn more about.

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<v Speaker 1>Because you're in COVID. You know, most businesses, including yours,

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<v Speaker 1>went through a lot of churn and redirection. How have

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<v Speaker 1>you emerged with a new strategy given the current consumer landscape,

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<v Speaker 1>how perhaps behaviors have shifted in the last few years,

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<v Speaker 1>and what's exciting today.

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<v Speaker 2>So that's a very very profound question because what happened.

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<v Speaker 2>COVID showed us that you should not be leveraged. So

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<v Speaker 2>some of our retailers who were you know, in some

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<v Speaker 2>ways competitors of ours and all where you had leverage.

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<v Speaker 2>COVID was you know, a very difficult time for any

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<v Speaker 2>business with leverage because basically you were exposed. And this

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<v Speaker 2>was really a black Swan event that hit the economy

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<v Speaker 2>and it hit retail very hard. So we were very

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<v Speaker 2>fortunate to emerge from COVID. Like every company, we had

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<v Speaker 2>a lot of, you know, difficult issues to confront post COVID.

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<v Speaker 2>We had a lot of extra inventory and all, but

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<v Speaker 2>we also saw an opportunity because you're absolutely right, the

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<v Speaker 2>consumer preferences in that period had shifted. And one thing

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<v Speaker 2>that exploded post COVID, which is born out in the statistics,

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<v Speaker 2>is digital commace exploded. That is what has led to

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<v Speaker 2>the rise of the rapid rise of quick commerce players

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<v Speaker 2>like Blinket and instam Art. And because consumers became very,

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<v Speaker 2>very comfortable with ordering from home because COVID taught them that.

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<v Speaker 2>In a way, I think it took a five to

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<v Speaker 2>seven year period and compressed it into one year, and

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<v Speaker 2>so consumer behavior changed. So what do we do. We

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<v Speaker 2>realized we needed to have a two prong strategy. One is,

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<v Speaker 2>we needed to build a moat around our physical retail business,

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<v Speaker 2>which was at that point ninety five percent of our sales.

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<v Speaker 2>Today it is eighty percent of our sales. And that

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<v Speaker 2>involved changing our physical retail business to taking it from

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<v Speaker 2>a seller of just goods to adding whole lots of

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<v Speaker 2>services that you can't get online. For example, we did

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<v Speaker 2>a lot of interesting things with bespoke, with interior design studios,

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<v Speaker 2>with getting customers to come in. We have a lot

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<v Speaker 2>of gifting services, so we added a whole layer of

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<v Speaker 2>services and we noticed that that helped bring people back

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<v Speaker 2>into physical stores. We added in some stores, cafes. You know,

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<v Speaker 2>we really made it about our community spaces. You're not

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<v Speaker 2>going to drive in a big city like Bangalore. You're

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<v Speaker 2>not going to spend two hours in a car to

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<v Speaker 2>go to a store. But if you live in a

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<v Speaker 2>neighborhood and it's Sunday morning, you might go to a store.

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<v Speaker 2>And you know, many people can do different things. So

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<v Speaker 2>we wanted to bring the joy back to physical retail

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<v Speaker 2>because otherwise you can't. Physical retail would not have survived

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<v Speaker 2>the e commerce onslaught because it's too comfortable. You can

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<v Speaker 2>be sitting at home in your pajamas, order whatever you

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<v Speaker 2>want and most of it will be delivered either the

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<v Speaker 2>same day or the next day, or in some cases

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<v Speaker 2>if you go to quick commerce, within fifteen minutes. So

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<v Speaker 2>we needed to pivot in such a way that we

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<v Speaker 2>need to say that how are you going to make

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<v Speaker 2>physical retail enjoyable a community, a family experience, a community

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<v Speaker 2>experience and all that. And I must say that that

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<v Speaker 2>has shown very strong. I mean, it's a good place

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<v Speaker 2>for us to be. But we're also focusing very much

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<v Speaker 2>on quick commerce. The interesting thing is we sell more

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<v Speaker 2>sc use of certain types like white Cota pajamas on

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<v Speaker 2>quick commerce than we do in our regular stores. So

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<v Speaker 2>what's been exciting for us is that quick commerce, to me,

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<v Speaker 2>represents a whole new area of business that didn't exist

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<v Speaker 2>before hour. So people know no quick commerce about buying

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<v Speaker 2>butter and biscuits, and what are you going to be

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<v Speaker 2>selling put tabajamas on quick commerce? I said, it doesn't

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<v Speaker 2>hurt us to try it. So the trick about quick

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<v Speaker 2>commerce you have to have a lot of ready inventory,

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<v Speaker 2>which is why if you're making butter, you have it

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<v Speaker 2>or soap. But in our case, we also had a

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<v Speaker 2>lot of ready inventory, so we were able to quickly

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<v Speaker 2>offer that to quick commerce players. They could put it

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<v Speaker 2>in there five thousand plus dark warehouses and get it

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<v Speaker 2>out to customers. But it's not a game for the

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<v Speaker 2>faint hearted because you need deep inventory and then if

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<v Speaker 2>something doesn't do well, it comes back and then you

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<v Speaker 2>need to have the ability to absorb it.

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<v Speaker 1>And exactly that's in fact, that's just what I was

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<v Speaker 1>going to ask you because both in terms of what

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<v Speaker 1>you're describing in quick commerce as well as going back

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<v Speaker 1>to you know, restocking the stores, even though it's now

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<v Speaker 1>more service led, but there is still once again that

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<v Speaker 1>risk on inventory and and you know, building operational capital

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<v Speaker 1>to in fact sustain this. So do you see a

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<v Speaker 1>risk there or you feel that you've had the learnings

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<v Speaker 1>and this time it's well mitigated.

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<v Speaker 2>No, there's a huge risk because if you see, digital

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<v Speaker 2>businesses have actually split into four areas. So when someone

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<v Speaker 2>says what's your e commace strategy, I said, it's there

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<v Speaker 2>are four types of digital businesses. You have our own

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<v Speaker 2>web and app where we get over one hundred thousand

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<v Speaker 2>unique visitors a day, we have marketplaces like Mintra, like Amazon.

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<v Speaker 2>They're the marketplaces, which is a whole different kind of

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<v Speaker 2>business because in the marketplaces you are competing, in our

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<v Speaker 2>case with hundreds of others where the price to French

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<v Speaker 2>you'll give me twenty five rupees up and down. Then

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<v Speaker 2>you have quick commerce where you have to have very

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<v Speaker 2>deep pockets and the ability to absorb huge returns. And

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<v Speaker 2>then you have social commerce, which is all Instagram led.

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<v Speaker 2>So the digital space has divided into four really distinct markets,

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<v Speaker 2>so you need a separate strategy for each one.

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<v Speaker 1>So then if we were to look at consolidated margins,

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<v Speaker 1>would you say that? And I think there's still always

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<v Speaker 1>a little bit of a tug with margins and having

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<v Speaker 1>them expand correct if I'm wrong. Is that due to

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<v Speaker 1>a large part because of again still building up the

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<v Speaker 1>physical retail part, or is it because of a structural

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<v Speaker 1>shift and demand that you're seeing altogether.

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<v Speaker 2>So if you see physical retail, the rule in the

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<v Speaker 2>game is intake margin versus lifetime out right, So let's see,

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<v Speaker 2>if your intake margin is sixty percent and your lifetime

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<v Speaker 2>margin is fifty six percent, then it's four hundred basis

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<v Speaker 2>points to exit them. So you bring it in and

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<v Speaker 2>by the time it's exited at a discount, you've lost four

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<v Speaker 2>hundred basis points. Now, if you're losing anywhere up to

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<v Speaker 2>five hundred basis points in physical retail, you're doing a

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<v Speaker 2>great job in the product life cycle. Quick commerce is

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<v Speaker 2>very different because in quick commerce you have to have

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<v Speaker 2>the ability to forecast correctly. So if they sell Rockies,

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<v Speaker 2>they sell a lot of Rockies, then the day after

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<v Speaker 2>Rocky they're selling zero Rockies. Then those Rockies have to

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<v Speaker 2>come back to you and you need to know what

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<v Speaker 2>to do with them. Similarly, you know if you take

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<v Speaker 2>anything in quick commerce, the game is a very fast game.

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<v Speaker 2>It's fast and sharp and there's no room for error.

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<v Speaker 2>So if six thousand quotas are ordered and four thousand

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<v Speaker 2>come back, you have the ability to absorb that four thousand. So,

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<v Speaker 2>in a way, you can only make money in quick

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<v Speaker 2>commerce if you have figured out the algorithm how it

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<v Speaker 2>works in both directions, and for that you really need

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<v Speaker 2>to have a team that is totally focused on it,

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<v Speaker 2>because if the returns exceed a certain percentage, your margin

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<v Speaker 2>is gone and you move into losses very quickly.

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<v Speaker 1>Got it the physical store to e commerce kind of contribution.

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<v Speaker 1>How do you see that changing over time? And you're

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<v Speaker 1>currently also expanding and opening news stores, so tell us

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<v Speaker 1>a little bit about that as well. How do you

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<v Speaker 1>see that intensity deepening across maybe tier two, tier three,

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<v Speaker 1>or which city is as well as how the overall

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<v Speaker 1>contribution to revenue is likely to play out.

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<v Speaker 2>So essentially, every business is going to have to become

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<v Speaker 2>a tech company. We are going to have to become

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<v Speaker 2>a tech company simply because the data rivers that are

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<v Speaker 2>reaching us are shifting all the time, and we are

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<v Speaker 2>going to be competing with people who are using AI

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<v Speaker 2>and a gentic AI to figure out micro shifts and

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<v Speaker 2>consumer demand, and they're going to do it much faster

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<v Speaker 2>than retailers who don't use the technology. So the next

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<v Speaker 2>challenge for us is to become an AI company, an

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<v Speaker 2>AI first company. So we have a project called the

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<v Speaker 2>Self Driving Enterprise in which we have made a plan

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<v Speaker 2>within three years to be completely all systems and all

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<v Speaker 2>data responses to data have to be filtered through our

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<v Speaker 2>AI platform, and without which decision making what I would

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<v Speaker 2>call human decision making is too slow to be able

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<v Speaker 2>to allow us to compete in situation like that. So

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<v Speaker 2>we have to move completely out of human decision making,

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<v Speaker 2>remove the humans from the process, and put in the AI.

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<v Speaker 2>If you don't do that, you can have an excellent

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<v Speaker 2>search engine optimization, which we have today, but people won't

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<v Speaker 2>use search engine optimization. And if they're not using search

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<v Speaker 2>engine optimization, all that money and effort you spent on

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<v Speaker 2>a SEO is a waste. And if they're using AI

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<v Speaker 2>engines to help make choices for them, then that's different

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<v Speaker 2>because in a search engine optimization you made the choice.

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<v Speaker 2>In a generic system, the system is made. The AI

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<v Speaker 2>is making the choice for you. It goes to where

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<v Speaker 2>to eat, where to stay, what to where, how to shop.

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<v Speaker 2>I mean, it is profound what's happening. And I just

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<v Speaker 2>hope that we are agile enough to be able to

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<v Speaker 2>make that trying to change.

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<v Speaker 1>So do you think today it's more relevant that you're

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<v Speaker 1>accessible to the consumer or is it equally or more

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<v Speaker 1>relevant to be actually culturally relevant for the consumer in

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<v Speaker 1>the terms of is constant innovation the priority or is

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<v Speaker 1>technology the priority?

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<v Speaker 2>Wow, innovation is there to excite the consumer. You need technology,

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<v Speaker 2>just like it's like saying every office building needs electricity.

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<v Speaker 2>It's a completely non negotiable. It means that you're operating

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<v Speaker 2>a building on kerosene in candle lights, and your competitors

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<v Speaker 2>operating using in operating electricity. Because what is happening in

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<v Speaker 2>terms of the AI transformation is ai is ability to

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<v Speaker 2>crunch data and come up with trends that humans cannot see.

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<v Speaker 2>Is that a speed that is unmatched in history. So

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<v Speaker 2>we can break groups of consumers into tiny groups and

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<v Speaker 2>monitor their trends by the way they drop data, and

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<v Speaker 2>figure out a strategy for them, all of which would

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<v Speaker 2>be very difficult for human beings to do, very easy

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<v Speaker 2>for AI to do.

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<v Speaker 1>Okay, all right, that sounds like a really interesting time.

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<v Speaker 1>Has this been an experience or a journey for you

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<v Speaker 1>as well as someone who's been building this company in

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<v Speaker 1>this brand for decades now, to see you know the

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<v Speaker 1>kind of transformation that can happen through AI.

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<v Speaker 2>Well, I remember someone once said to me, they said

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<v Speaker 2>be flexible, And I think those two words are really

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<v Speaker 2>important because the second you get set in your ways,

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<v Speaker 2>you're over and AI is gonna you know, if you

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<v Speaker 2>if we don't build our business around AI, they might

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<v Speaker 2>not be a business in the future. And I know

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<v Speaker 2>that sounds very dramatic, But that's the change, the speed

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<v Speaker 2>of change that we're seeing.

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<v Speaker 1>Okay, you had the sale of Organic India to the

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<v Speaker 1>Tatas in twenty twenty four. Yes, and you know, I

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<v Speaker 1>wanted to understand from you your experience of engaging with

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<v Speaker 1>some of these investors in terms of understanding again the

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<v Speaker 1>fact that your core of your business has always been

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<v Speaker 1>linked to purpose as well. So as you scale and

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<v Speaker 1>ask questions around profitability and scale come up, do you

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<v Speaker 1>see pressure from investors in terms of finding the right balance,

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<v Speaker 1>maybe compromising on some things in order to reach those milestones,

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<v Speaker 1>or do you find a healthy balance?

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<v Speaker 2>See, it is a balance, and you've really struck the

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<v Speaker 2>right word, because you have to balance growth in sales

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<v Speaker 2>and profitability with the purpose and it involves always looking

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<v Speaker 2>at the trade offs one versus the other. So we

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<v Speaker 2>do certain things that I think would be very good

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<v Speaker 2>for our sales and profitability that maybe are not key

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<v Speaker 2>to our social mission, and then we do things that

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<v Speaker 2>are key to our social mission, and you need to

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<v Speaker 2>maintain the balance between the two.

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<v Speaker 1>Okay, fair enough, And at that time, of course you

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<v Speaker 1>had that deal go through. The IPO plans were shelved

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<v Speaker 1>at that time. Was it a decision based on timing,

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<v Speaker 1>valuations or other factors.

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<v Speaker 2>So I think that we came out of COVID like

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<v Speaker 2>most businesses, like COVID was a period where you really

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<v Speaker 2>a business got damaged. I mean it was. It was

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<v Speaker 2>just the nature of what happened. And then coming out

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<v Speaker 2>of COVID and bringing the workforce back and was harder

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<v Speaker 2>than I thought it would be, and doing an IP

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<v Speaker 2>at the same time was not possible to we realize

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<v Speaker 2>it was too much for the organization to take on

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<v Speaker 2>and we had a large amount of debt on our books,

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<v Speaker 2>which we had taken on during COVID, because that is

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<v Speaker 2>when you know you live you walk your talk, basically,

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<v Speaker 2>because we kept saying we're a social vision driven company,

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<v Speaker 2>a mission driven company, we have a strong social objective. Well,

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<v Speaker 2>during COVID, what happened is that a lot of our

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<v Speaker 2>artisan base was crumbling and really so we had to

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<v Speaker 2>keep ordering some amount. So we ended up going from

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<v Speaker 2>zero debt to about seven the course of debt, and

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<v Speaker 2>in order to retire the debt, we sol long Anakinda.

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<v Speaker 1>Got it And would you at any stage reconsider going

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<v Speaker 1>down that path?

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<v Speaker 2>I do feel that personally not not for the next

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<v Speaker 2>few years, because I think that we have enough to

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<v Speaker 2>keep ourselves occupied with. But I do feel that the

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<v Speaker 2>next revolution, any FMCG company that doesn't become a company

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<v Speaker 2>with a purpose like wellness is going to be just

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<v Speaker 2>a commodity. And wellness is where the future lies. I mean,

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<v Speaker 2>people really want to look good, they want to be healthy,

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<v Speaker 2>and they're putting a huge premium on their health. And

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<v Speaker 2>I think that if one creates put wellness at the

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<v Speaker 2>core of what you're doing, the whole FMCG sector will

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<v Speaker 2>be reinvented.

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<v Speaker 1>Okay, going forward, would the strategy then be to gradually

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<v Speaker 1>consolidate everything under that wellness player around that wellness play

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<v Speaker 1>or is it still more about further diversification. Which way

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<v Speaker 1>do you see things going or which way are you

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<v Speaker 1>choosing to approach it?

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<v Speaker 2>So, I mean the conversation on where Organic India was

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<v Speaker 2>built as India's first wellness company, and you know, because

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<v Speaker 2>of circumstances, we have to sell it. I do feel

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<v Speaker 2>that the wellness space is huge, and it's part of

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<v Speaker 2>the concept of having a lifestyle brand, because a lifestyle

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<v Speaker 2>brand is almost like an ideology. I mean, it speaks

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<v Speaker 2>to you as a person, what you believe in, the

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<v Speaker 2>way you want to live your life, your values, So

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<v Speaker 2>we want to be in alignment with those and we

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<v Speaker 2>want to say that look, if you have these values,

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<v Speaker 2>if this is what you believe in, this is the

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<v Speaker 2>way you want to live your life, then where the

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<v Speaker 2>brand for you got it? So?

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<v Speaker 1>How much of revenue is still from apparel?

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<v Speaker 2>So apparel currently is interesting. It counts for about seventy

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<v Speaker 2>percent of our revenue. That's across both digital and physic.

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<v Speaker 2>But within that, the interesting thing is that ethnic is

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<v Speaker 2>growing very slowly, whereas Western ware is growing very fast

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<v Speaker 2>Fusion in Western ware. So in apparel we really have

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<v Speaker 2>the traditional ethnic, we have Fusion, which is a blend

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<v Speaker 2>of East and Western. We have Western where and the

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<v Speaker 2>fastest growing segment is really westernware.

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<v Speaker 1>Okay, that's super interesting. And is that something that you

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<v Speaker 1>found challenging here at Fabindia or you found it exciting

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<v Speaker 1>in terms of coming up with a new line products innovation.

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<v Speaker 2>Well, it was both challenging and exciting. Challenging because we

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<v Speaker 2>did not want to be You don't want to be

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<v Speaker 2>a tzara this is already done. You don't want to

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<v Speaker 2>be a unique cloth that's already done, and you want

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<v Speaker 2>to be distinctive. If we are offering Western ware, what

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<v Speaker 2>can we offer that is different enough and exciting enough

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<v Speaker 2>for a consumer not trying to be some other brand?

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<v Speaker 2>Because they are very well established westernware brand, so why

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<v Speaker 2>should we try to be like them? So that took

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<v Speaker 2>us a few years to figure out our language in

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<v Speaker 2>Western ware. And what I'm really excited about the fact

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<v Speaker 2>that we have a language in westing with and that's

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<v Speaker 2>that language is unique and customers are beginning to recognize

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<v Speaker 2>it as our language.

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<v Speaker 1>Okay, So when you say there's still scope for the

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<v Speaker 1>wellness market, how would you articulate, you know, how you're

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<v Speaker 1>going to be approaching that in terms of creating something

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<v Speaker 1>that could go towards IPA. Would it be a combination

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<v Speaker 1>of the offering, would it be a fresh product?

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<v Speaker 2>Tell me, well, if someone once said to me, everybody's

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<v Speaker 2>going to be forty or fifty one day, everybody, right,

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<v Speaker 2>So when you become when you enter your forties, you

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<v Speaker 2>start thinking about your lifespan. You start thinking about you know,

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<v Speaker 2>the first aches and pain start coming into people's bodies

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<v Speaker 2>and they start thinking, Wow, I want to be really

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<v Speaker 2>fit and I want to be healthy and I want

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<v Speaker 2>to be able to run upstairs, and I want to

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<v Speaker 2>manage my BMI and I want to do all these things.

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<v Speaker 2>And so that opens up, and is India becomes more affluent,

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<v Speaker 2>and is India ages, which is inevitable, they will be

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<v Speaker 2>an explosion in wellness.

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<v Speaker 1>Okay, Okay, So we'll have to wait and see how

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<v Speaker 1>that well we're all getting there transpires. Okay, fine, So

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<v Speaker 1>something is brewing in the wellness space. And who better

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<v Speaker 1>than William to of course be doing this, given the

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<v Speaker 1>enormous value you created with Organic India. So we look

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<v Speaker 1>forward to that. I also want to come back William too.

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<v Speaker 1>You know what you spoke about with regards to going digital,

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<v Speaker 1>and I was asking how much of the revenue makes

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<v Speaker 1>you see changing on the back of that. Is there

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<v Speaker 1>any insight you can give me whether it's going to

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<v Speaker 1>take two years five years to see that substantial shift.

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<v Speaker 2>I think it's going to take two to three years

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<v Speaker 2>because the use of agentic search and agentic engines and

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<v Speaker 2>all the technologies that are coming out is going to

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<v Speaker 2>make quick commerce grow and marketplaces grow at a much

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<v Speaker 2>faster rate. So I can see our business being fifty

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<v Speaker 2>percent physical, even though we're growing physical and fifty percent digital.

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<v Speaker 2>The other thing is that with the logistics revolution that's

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<v Speaker 2>taken place, you can be living in a really small

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<v Speaker 2>village in a really distant district of India and still

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<v Speaker 2>get the full selection online. And that you know is

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<v Speaker 2>going to be It'll open up every market, every product

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<v Speaker 2>to every market, which wasn't the case earlier.

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<v Speaker 1>That's going to be huge.

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<v Speaker 2>It's going to be a game changer. That's why I'm

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<v Speaker 2>confident saying that fifty to fifty is going to happen.

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<v Speaker 1>Okay, all right, and you said you're still investing in

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00:22:33.960 --> 00:22:37.559
<v Speaker 1>physical and is that because it's perhaps more to be

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<v Speaker 1>present across regions, maybe more as an experience center, or

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<v Speaker 1>because there is also growth there. It's just that the

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<v Speaker 1>mix is changing, you know.

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<v Speaker 2>It's it's like people still like to go to restaurants.

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<v Speaker 2>They might not want to go to a restaurant which

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<v Speaker 2>looks like I mean in e commerce delivery place, but

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<v Speaker 2>they still like to go to restaurants because you want,

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<v Speaker 2>you know, you want to socialize, you want to meet people,

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<v Speaker 2>you want to celebrate things. For everything else, you'll order

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<v Speaker 2>zomato at home, so tomato comes to your home. But

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<v Speaker 2>once in a while, you want to go out and eat,

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<v Speaker 2>so we need to be there in both places.

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<v Speaker 1>And the overall growth, then how would you pinpoint or

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<v Speaker 1>define the kind of growth that one could look at

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<v Speaker 1>going forward?

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<v Speaker 2>You know, a lot of it is going to depend

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<v Speaker 2>on the growth in the middle class, in middle class households,

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<v Speaker 2>in disposable income. And I think that if the economy

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<v Speaker 2>is able to grow at you know, seventy eight, nine,

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<v Speaker 2>ten percent, then you know, you're you're adding you know,

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<v Speaker 2>a number several million households to the middle class every year,

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<v Speaker 2>and then that would mean that, you know, you can

424
00:23:45.839 --> 00:23:49.799
<v Speaker 2>have a long runway of sustainable growth. But it depends

425
00:23:49.839 --> 00:23:52.400
<v Speaker 2>on now the growth in the economy.

426
00:23:53.240 --> 00:23:54.680
<v Speaker 1>Is this a good time to ask you about the

427
00:23:54.720 --> 00:23:56.200
<v Speaker 1>Iran war and the impact?

428
00:23:57.440 --> 00:24:00.960
<v Speaker 2>You know, the Iran war is unfortunate, it's really sad,

429
00:24:01.000 --> 00:24:04.559
<v Speaker 2>and you know, like most people here, we you know,

430
00:24:04.599 --> 00:24:07.839
<v Speaker 2>feel awful about what is happening. But I do feel

431
00:24:07.839 --> 00:24:11.599
<v Speaker 2>that its impact will be felt, even if it ends

432
00:24:11.599 --> 00:24:15.200
<v Speaker 2>soon for the near future, for the next couple of months.

433
00:24:15.759 --> 00:24:21.119
<v Speaker 2>I mean, we don't use any petrochemical products like polyester yarns.

434
00:24:21.119 --> 00:24:23.599
<v Speaker 2>We don't use the yarn, so we're not affected that much.

435
00:24:23.640 --> 00:24:26.359
<v Speaker 2>By any price rises that take place. We are also

436
00:24:26.359 --> 00:24:29.759
<v Speaker 2>one hundred percent made in India and so we are

437
00:24:29.920 --> 00:24:33.160
<v Speaker 2>in that we protected from the inflationary pressures that will

438
00:24:33.200 --> 00:24:36.920
<v Speaker 2>come with an oil shortage. We're also protected from any

439
00:24:37.559 --> 00:24:40.640
<v Speaker 2>foreign exchange risk because we are an exporter. We don't

440
00:24:40.680 --> 00:24:44.160
<v Speaker 2>import at all, one percent made in India. So you know,

441
00:24:44.240 --> 00:24:51.599
<v Speaker 2>I thank our artisans for keeping us at home and.

442
00:24:50.160 --> 00:24:52.400
<v Speaker 1>On the export front. Have you been hit because of

443
00:24:52.680 --> 00:24:56.160
<v Speaker 1>the Trump tantrums that keep going back and forth or

444
00:24:56.960 --> 00:24:59.480
<v Speaker 1>have you been able to manage that.

445
00:25:00.599 --> 00:25:03.359
<v Speaker 2>We don't have a presence in it that we are

446
00:25:03.440 --> 00:25:07.119
<v Speaker 2>mostly in countries with the strong Indian diaspora, and our

447
00:25:07.319 --> 00:25:10.640
<v Speaker 2>job is to promote the brand and the values of

448
00:25:10.680 --> 00:25:14.279
<v Speaker 2>the brand, celebrating India around the world. So that's what

449
00:25:14.359 --> 00:25:15.079
<v Speaker 2>we focused on.

450
00:25:16.000 --> 00:25:20.240
<v Speaker 1>You also, of course implemented this new layer around community

451
00:25:20.519 --> 00:25:23.799
<v Speaker 1>and I think they are the FAB reward points for instance.

452
00:25:23.839 --> 00:25:25.680
<v Speaker 2>Tell us a little bit more about that. So we

453
00:25:25.759 --> 00:25:29.559
<v Speaker 2>have six point three members of the FAB Family program,

454
00:25:29.640 --> 00:25:33.559
<v Speaker 2>six point three million members, so and we you know,

455
00:25:33.880 --> 00:25:37.000
<v Speaker 2>we really try to look after them and we try

456
00:25:37.039 --> 00:25:39.519
<v Speaker 2>to make sure we offer them all kinds of benefits

457
00:25:40.039 --> 00:25:42.720
<v Speaker 2>to the members, and we're doing a lot of marketing

458
00:25:42.799 --> 00:25:45.759
<v Speaker 2>tie ups in which we get substantial discounts, so we

459
00:25:45.799 --> 00:25:48.519
<v Speaker 2>pass on to our members, so you can if you're

460
00:25:48.559 --> 00:25:50.759
<v Speaker 2>in the top tier, for example, you get ten percent

461
00:25:50.839 --> 00:25:54.759
<v Speaker 2>points for your shopping. So if for every thousand rupeece

462
00:25:54.799 --> 00:25:57.200
<v Speaker 2>you buy, you get a hundred points, and the hundred

463
00:25:57.200 --> 00:26:00.400
<v Speaker 2>points in some cases where we have tie ups, can

464
00:26:00.480 --> 00:26:03.079
<v Speaker 2>buy you a thousand rupeace worth. So we call it

465
00:26:03.119 --> 00:26:03.960
<v Speaker 2>shopping for free.

466
00:26:04.440 --> 00:26:08.039
<v Speaker 1>Okay fun, And it's taken off.

467
00:26:08.519 --> 00:26:11.400
<v Speaker 2>Yes, because you see, if you have an interesting project

468
00:26:11.480 --> 00:26:13.640
<v Speaker 2>or product and you want to get it to six

469
00:26:13.680 --> 00:26:16.200
<v Speaker 2>point three million people who are of a particular kind,

470
00:26:16.559 --> 00:26:19.279
<v Speaker 2>they happen to be our customer base and they're on

471
00:26:19.359 --> 00:26:22.240
<v Speaker 2>our database. So we use our database to promote a

472
00:26:22.279 --> 00:26:24.880
<v Speaker 2>product we believe in, and in return, we give our

473
00:26:24.920 --> 00:26:27.960
<v Speaker 2>customers the benefit of whatever benefit you give us.

474
00:26:28.279 --> 00:26:32.920
<v Speaker 1>Okay, great. You know a lot of investors such as

475
00:26:33.160 --> 00:26:35.599
<v Speaker 1>pram G invest and so fourth level, so beIN strong

476
00:26:35.680 --> 00:26:39.359
<v Speaker 1>backers of your story. Again, a potential exit for them

477
00:26:39.400 --> 00:26:40.759
<v Speaker 1>in time to come would look.

478
00:26:40.640 --> 00:26:43.279
<v Speaker 2>Like what watch the space.

479
00:26:44.799 --> 00:26:46.880
<v Speaker 1>I'm trying to ask you in many different ways, but

480
00:26:46.960 --> 00:26:51.079
<v Speaker 1>what I'm essentially taking away is that yes, definitely there

481
00:26:51.119 --> 00:26:55.359
<v Speaker 1>is something something to wait for here William. You know

482
00:26:55.480 --> 00:26:58.799
<v Speaker 1>you always did so committed to a different way of

483
00:26:58.839 --> 00:27:02.000
<v Speaker 1>building the business true to your purpose and also building

484
00:27:02.000 --> 00:27:06.759
<v Speaker 1>one of India's strongest brand stories. You know, also with

485
00:27:06.839 --> 00:27:10.759
<v Speaker 1>phenomenal investors, partners that you've died up with in order

486
00:27:10.799 --> 00:27:14.119
<v Speaker 1>to scale and grow and so forth. Has there been

487
00:27:14.160 --> 00:27:16.799
<v Speaker 1>a point along the way where you've questioned your path?

488
00:27:18.240 --> 00:27:21.279
<v Speaker 2>You know, I think that you know. I talk to

489
00:27:21.359 --> 00:27:24.119
<v Speaker 2>young entrepreneurs about this all the time. I say, you know,

490
00:27:24.200 --> 00:27:28.039
<v Speaker 2>what makes you live in the long term is maybe

491
00:27:28.079 --> 00:27:29.880
<v Speaker 2>not something you think is a good idea in the

492
00:27:29.920 --> 00:27:32.920
<v Speaker 2>short term. So if you want to live for the

493
00:27:33.000 --> 00:27:37.720
<v Speaker 2>long term, you have to forsake the pleasures like a

494
00:27:37.759 --> 00:27:40.680
<v Speaker 2>glass of booze or a cigarette in the show, which

495
00:27:40.759 --> 00:27:43.440
<v Speaker 2>gives you short term pleasure to live for a long life.

496
00:27:43.519 --> 00:27:45.039
<v Speaker 2>And as a business, we have to do the same thing.

497
00:27:45.079 --> 00:27:46.640
<v Speaker 2>If we want to be around and we've been around

498
00:27:46.640 --> 00:27:49.319
<v Speaker 2>for sixty five years, then we have to remember that

499
00:27:49.359 --> 00:27:50.799
<v Speaker 2>we have There are a lot of things we have

500
00:27:50.920 --> 00:27:55.079
<v Speaker 2>to give up in order to have the longevity, and

501
00:27:55.559 --> 00:27:59.559
<v Speaker 2>that's and often those things are in opposition to each other, like,

502
00:27:59.599 --> 00:28:03.559
<v Speaker 2>for example, sample when capital markets excessively reward you for profits,

503
00:28:03.920 --> 00:28:08.400
<v Speaker 2>like they push your price earnings multiples hugely. Then you're like, okay,

504
00:28:08.480 --> 00:28:11.640
<v Speaker 2>let's try some cheap tricks to bump up your you know,

505
00:28:12.160 --> 00:28:14.599
<v Speaker 2>because the markets are giving you crazy rewards, why don't

506
00:28:14.640 --> 00:28:17.759
<v Speaker 2>we start shipping and they give you multiples of sales

507
00:28:17.799 --> 00:28:20.240
<v Speaker 2>and all this, and then you're under pressure to say, okay,

508
00:28:20.319 --> 00:28:22.960
<v Speaker 2>let me bump up the sale somehow. But in the

509
00:28:23.000 --> 00:28:26.079
<v Speaker 2>long term it'll hurt you. So I think it's really

510
00:28:26.119 --> 00:28:28.319
<v Speaker 2>important to be clear about where you want to be

511
00:28:28.319 --> 00:28:29.680
<v Speaker 2>in the short term of the long term.

512
00:28:29.759 --> 00:28:34.200
<v Speaker 1>Okay, So growth number though double.

513
00:28:33.920 --> 00:28:39.920
<v Speaker 2>Digit, Yes, this year. We completed last year with a

514
00:28:40.000 --> 00:28:43.559
<v Speaker 2>high single digit growth. It was a challenging year for

515
00:28:43.640 --> 00:28:47.680
<v Speaker 2>retail and we decided to consolidate rather than open new stores.

516
00:28:47.720 --> 00:28:50.400
<v Speaker 2>So that number is a high single digit for same

517
00:28:50.440 --> 00:28:53.640
<v Speaker 2>store sales growth, which is I believe the best in

518
00:28:53.680 --> 00:28:57.079
<v Speaker 2>the industry. But next year, this coming year, which has

519
00:28:57.160 --> 00:29:00.000
<v Speaker 2>just started, we are looking at a very aggressive growth

520
00:29:00.599 --> 00:29:02.720
<v Speaker 2>plan because we see lots of opportunity.

521
00:29:03.279 --> 00:29:05.799
<v Speaker 1>All right, William, thank you so much for sitting down

522
00:29:05.799 --> 00:29:07.599
<v Speaker 1>with me, and thank you for giving us an insight

523
00:29:07.680 --> 00:29:10.039
<v Speaker 1>into the world of fab India and all that's happening here.

524
00:29:10.240 --> 00:29:11.079
<v Speaker 2>You're very welcome.

525
00:29:11.240 --> 00:29:12.079
<v Speaker 1>Thank thank you.