Lilliput to dress up kids in Dragon land
The company has entered into a joint venture with Shenzhen New World Development Company for its retail venture in China. It will hold 60% in the joint venture.
By Aman Dhall, TNN |
NEW DELHI: In probably a first for India Inc in the retail business, Lilliput Kidswear is all set to become the first Indian company to establish base in the land of dragons. The company has entered into a joint venture with Shenzhen New World Development Company for its retail venture in China. It will hold 60% stake in the new joint venture company being called Lilliput Kidswear China.
As part of its global plans, the company has also tied up with Bahrain-based Al-Fanar Investment and Holding Company for its retail venture in the Middle-East. The new joint venture company Al-Fanar SN Retail will be a 60:40 partnership with the former holding the majority stake.
The company is now eyeing countries such as the Philippines and Egypt to further extend its footprint across the globe. It intends to achieve 18% of its total turnover from international stores by March 2010.
“We believe that China, as a retail destination, is a very exciting opportunity. We have already done our internal research and calculations. There’s a perception that in China only cheap goods are produced, which is not true. China may be cheap in manufacturing but in retail it’s certainly not.
If the average retail price of merchandise in India is $14, the same is $25 in China, which points to the fact that there are higher margins there,” Lilliput Kidswear CEO Sanjeev Narula told ET.
The company plans to have smaller format stores spread over 500-800 sq ft in China while in the Gulf, the stores will be in a bigger format spread of over 1,200-1,800 sq ft. The company is targeting to set up 100 stores in China and 25 stores in the Middle-East by March 2010.
“We will have 70% of the stores on the franchisee model and the rest on ownership basis in China. In the Middle East, 70% of the stores will be franchised while the rest will be company owned. We will be spending around Rs 35 crore on our international ventures overall, which will be sourced through a mix of internal accruals and debt,” Mr Narula said.
As part of its global plans, the company has also tied up with Bahrain-based Al-Fanar Investment and Holding Company for its retail venture in the Middle-East. The new joint venture company Al-Fanar SN Retail will be a 60:40 partnership with the former holding the majority stake.
The company is now eyeing countries such as the Philippines and Egypt to further extend its footprint across the globe. It intends to achieve 18% of its total turnover from international stores by March 2010.
“We believe that China, as a retail destination, is a very exciting opportunity. We have already done our internal research and calculations. There’s a perception that in China only cheap goods are produced, which is not true. China may be cheap in manufacturing but in retail it’s certainly not.
If the average retail price of merchandise in India is $14, the same is $25 in China, which points to the fact that there are higher margins there,” Lilliput Kidswear CEO Sanjeev Narula told ET.
The company plans to have smaller format stores spread over 500-800 sq ft in China while in the Gulf, the stores will be in a bigger format spread of over 1,200-1,800 sq ft. The company is targeting to set up 100 stores in China and 25 stores in the Middle-East by March 2010.
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“We will have 70% of the stores on the franchisee model and the rest on ownership basis in China. In the Middle East, 70% of the stores will be franchised while the rest will be company owned. We will be spending around Rs 35 crore on our international ventures overall, which will be sourced through a mix of internal accruals and debt,” Mr Narula said.
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