Indian accessory brand Baggit has announced its plan to re-enter international markets through strategic local partnerships.
The retailer aims to establish a presence in the US, Australia, the Gulf Cooperation Council (GCC) region and the UK, according to reports in the Economic Times Retail (ETRetail).
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Before the Covid pandemic, the brand offered products in countries such as Nepal, Bangladesh and Sri Lanka through exclusive partnerships, which expired during the pandemic.
Baggit managing director and chief design curator Nina Lekhi stated that the company will leverage major online marketplaces such as Amazon for initial expansion.
Nina Lekhi was quoted in ETRetail: “Now, we are re-entering the Gulf region through a non-exclusive arrangement. Unlike earlier, this time we will begin with our online operations and then open offline stores. We are expected to complete the first phase of expansion by the end of this fiscal year. And then we will keep on expanding to 4 to 5 new markets every year.”
In preparation for its international venture, Baggit is allocating a large portion of its budget to create awareness in these new markets, capping marketing expenses at 25% of turnover.
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By GlobalDataThis is a considerable increase compared to the 10% spent within India.
The brand has invested Rs50m ($0.59m) to establish a manufacturing unit at Bhiwandi in the Indian state of Maharashtra.
The facility spans 40,000ft² and has a monthly capacity of 80,000 bags.
Nina Lekhi continued: “We only manufacture premium products at our manufacturing unit. Currently, only 50% of the capacity has been utilised. In the next financial year, we will be further investing $0.54m to $0.67m to expand its capacity.”
The expansion plan also includes adopting an omnichannel approach and increasing the number of stores across India from 101 to 161 by the end of the fiscal year 2024 to 2025.
The retailer will focus on tier 2 cities and beyond.
Lekhi added: “Out of the 101 stores we operate, 67 stores are run by franchise partners, and the remaining 34 stores are company-owned and company-operated. Going ahead, we plan to operate all the new 60 stores with franchise partners.”
Baggit’s current retail footprint includes 300 shop-in-shops. For new franchise partners, the initial investment for a store is set between Rs1.5m and Rs2m.
The brand’s revenue is currently split, with 60% coming from offline sales and the remaining 40 percent from online channels.
The company is also planning to expand its product range by venturing into categories such as trolley bags, backpacks and cabin bags.
It is also exploring the addition of jewellery and footwear to its offerings.
