In a first, khadi is set to take the franchisee route besides entering into at least three marketing arrangements with garment manufacturers as it looks to expand its footprint and meet the growing demand for the traditional hand-spun and hand-woven product.
Sources told that Khadi & Village Industries Commission (KVIC) has clinched a deal with Raymond and similar arrangements are going to be stitched up with at least two players, Madura Garments and Arvind Mills, which will see availability of khadi fabric at some of their stores.
While Fabindia too was engaged in talks with KVIC to sell khadi, the deal did not work out as the retailer was unwilling to comply with the condition being imposed by the government agency. The arrangement will Raymond and the others ensures purchase of khadi fabric from KVIC, which is also looking at the private channels to push village products such as soaps and other items.
The government also cleared a franchisee scheme for KVIC, which will allow opening of 16 stores, of which nine will come up in the National Capital Region, four in Mumbai, two in Pudducherry and one in Jaipur. Based on the experience with this model, KVIC will open more stores, said a source. Currently, khadi products are sold through 7,100 stores that are operated by institutions registered with KVIC.
The stores come at a time when others such as Ramdev’s Patanjali are opening stores at a breakneck pace. While Patanjali has so far focused on food and home care products, it is entering the garment and footwear business too.
Through franchisee stores, khadi is hope to have a presence in newer locations, including shopping complexes, instead of confining itself to government and old buildings where rentals are lower.
In recent years, khadi sales have been growing at a rapid pace with fabric and garment sales rising nearly 29% during April-August. In contrast, there has been a slower rise in production, estimated at around 14%, which is becoming a problem for KVIC. Sources said that it hoped to increase production by adding to its existing network of 2,100 active institutions and a new registration initiative was launched on October 2.
Source: Times of India
