Profitability in Kid’s Retail

Kid’s retail is one of the sunrise sectors in retail franchising. India is world’s second largest populated country after China and the population is growing at the rate of 17.5% as per the data of 2016. In a way, parenting and baby care industry too is growing at the same pace. India is one of the biggest markets for kids products due to the population growth; however, the awareness to use safe and hygienic products for babies and mothers is very low compared to international especially first world markets. In an exclusive interview with Utpala Ghosh, Naresh Khattar, Founder and MD, Me N Moms Pvt. Ltd, shares his journey of developing his kid’s retail brand and growing through franchising.

Tell us about your entrepreneurial journey right from the beginning till now?

In 1989 I opened a modest sized store called ‘Mamta Collection’, named after my first daughter, in the suburbs of Mumbai. The store received an overwhelming response which pushed me to work on a distribution chain for baby care products. On 8th May 1994 we opened our first flagship store of Me N Moms Pvt. Ltd in prime location of Juhu. The year 2004 marked another landmark for us when we opened a 4000 sq.ft store. Today, the brand offers products in every category of childcare and mother care that are present across all Me N Moms outlets along with more than 3000+ leading baby stores and chemists across country.

Presently, many global brands in this sector are entering into India. What’s your take on that and do you see it as a competitor?

Currently, India is one of the biggest markets globally and has been the centre of attention for several international players. What makes it even more tempting for parenting brands is the population, however not every international brand that enters India have the ability to understand the pulse of an Indian consumer as well as speaking their language. Pricing of most of the international players make them restricted to a premium target audience too depriving the actual chunk of population from their products.

What kind of training and business support do you provide to the franchisees? Elaborate about the same.

The brand brings with it a unique franchise model, where the franchisees receive all the support to set up and run the store. We set up the store and hand it over to the franchisee. Post-handover to the franchisee, the company provides HR, training, marketing, stock, and IT support thereby considerably reducing the burden and hassle for the franchisee.

What are the eligibility criteria for taking up a Me and Moms franchise?

The eligibility includes a minimum store space of 800 sq ft and a basic franchise fees. Initially, the franchisee is also given 25% of inventory by the company and a 50% marketing budget is borne by Me N Moms. A franchisee is expected to ensure consumer’s interest is given the highest priority. The company has regional offices in all the zones of India to offer uninterrupted customer service to their retail partners/network and customers throughout the country.

Do you evaluate the performance of your franchisee? Please elaborate how do you audit?

Once the franchise is handed over to the franchisee, we evaluate them based on several parameters including the revenue the franchisee is deriving. We do impromptu audits guised as mystery shoppers to ensure customer service is maintained every time in all our stores. This helps in improving the customer’s experience. This technique also helps in improving our individual performance. We have a dedicated customer care team, which calls customers to inquire about their shopping experience with us. We take the feedback from customers very seriously and implement them earnestly at the stores.

Typically for an investor who is planning to invest in this sector, what are the factors that he/ she should keep in mind?

This is an ever growing sector however; the target audience is a dynamic one. We are dealing with parents who are emotionally invested in the entire buying process and to ensure that they are treated right is one of the most essential aspects of the business. An entrant should be aware of the needs of a parent as well as a baby and should bring with him the emotional intelligence. This industry is for someone who understands the importance of joy of parenting and would like to work for their customers to help them enjoy the same.

What is your expansion plans?

Our aim is to continue geographical expansion and reach out to more and more cities throughout the country. With 58 operational stores and almost 14 stores in pipeline, we are targeting for a “100” stores by this financial year end. With the kind of response and support we are getting from our consumers and partners we think we will achieve this number much before.