Having grown in double digits in FY24, Modenik Lifestyle is on the path to grow in the mid-teens this year and plans to double the growth in the next three to four years. This revenue growth will be driven by leveraging its two major brands— Enamor and Dixcy across various channels, expanding the geographic footprint, and capitalising on India’s economic growth.
Apart from brick-and-mortar stores and e-commerce presence, interestingly, for Modenik Lifestyle, quick-commerce has become a significant channel for growth.
In an interesting conversation, Shekhar Tewari, CEO of Modenik Lifestyle, talks about how the company continues to target both metro-centric sophisticated audiences and buyers in the hinterlands.
Last month, Modenik Lifestyle- backed by Advent International, also announced the appointment of L.V. Vaidyanathan, former Chief Executive and Managing Director at P&G India, as its Executive Chairman effective July.
Tewari highlights how the company is set for accelerated growth after Vaidyanathan’s appointment.
Read more: P&G’s L.V. Vaidyanathan joins Modenik as executive chairman
The innerwear maker’s portfolio includes five brands: Dixcy Scott Originals, Dixcy Scott Maximus, Josh by Dixcy Scott, Slimz and Enamor. In the country, it competes with Page Industries, the exclusive licensee of Jockey International Inc.
Edited excerpts:
How do you intend to grow in the current fiscal?
As a company, we grew double digits in FY24 and grew higher than the top quartile of the competition. By the end of this fiscal, we expect mid-teens growth for Dixcy and much higher growth for Enamor. The revenue ratio between Enamor and Dixcy is 30:70, respectively.
Overall, the company aims to double its revenue growth in the next three to four years.
What gives the confidence?
The men’s and women’s wear markets in India are substantial, but precise figures are unavailable due to the lack of syndicated studies. The men’s wear market is highly branded, with five or six major national brands earning revenues between Rs 1,000 and 4,000 crores, dominating the unbranded segment.
In contrast, the women’s wear market is similar in size but predominantly unbranded. Few large national brands exist, yet the branded segment is growing faster due to rising brand awareness and financial independence among women. Our company holds a significant share in both markets, though specific figures are not available.
We aim to capitalise on the trend of women becoming more fashion-conscious and financially independent, driving growth in the branded women’s wear market over the next 8-10 years. We are confident these strategies will achieve substantial growth in both men’s and women’s wear markets.
Overall, Dixcy’s established strong presence in smaller towns and Enamor’s entry into largely unbranded markets position both brands well to capitalise on the growth opportunities in Bharat.
How receptive is Bharat to your brands?
Both Dixcy and Enamor are experiencing significant growth in Bharat, which includes smaller towns and rural areas in India. Dixcy, with sub-brands like Dixcy Slimz targeting various niches such as the economy women’s segment, is already widely distributed in tier-two and three towns, maintaining a presence in tier-one cities as well. The growth in these smaller towns is driven by increasing media consumption through television, OTT platforms, and digital channels, which create demand even in areas without a physical presence. This demand is further supported by online orders from these regions.
Enamor, positioned as a mid-premium to premium brand in women’s lingerie, has also seen notable growth in Bharat. Over the past five to six years, the increasing penetration of mobile and digital media in smaller towns has exposed consumers to similar media as in urban areas, leading to a surge in demand. Although high distribution costs pose a challenge to establishing a physical presence, the rise of online shopping allows Enamor to reach PIN codes without physical stores.
Additionally, the growth of e-commerce has significantly expanded market reach, allowing both brands to serve customers in areas where they lack physical stores.
As P&G’s L.V. Vaidyanathan joins Modenik, how is the company set for accelerated growth?
The company’s long-term vision remains steadfast, emphasising continuity and stability. LV brings with him extensive experience from his 28-year tenure at P&G, renowned for his leadership in sales and business turnaround strategies. His addition promises significant value to our team, enhancing our capabilities and guiding us towards future success.
How have you strategised the growth plan for this year?
Our growth will be driven by strategically leveraging the brands across various channels, expanding the geographic footprint, and capitalising on India’s economic growth. By focusing on these areas, we aim to achieve mid-teens growth and solidify our market position.
Our strategy includes tailoring communication to diverse markets and leveraging strengths to build a stronger presence. By focusing on areas where we already have a strong presence, we will use our learnings to expand into new regions and optimise our distribution networks.
Talking about communication, shed some light on your marketing strategy…
The advertising budget for this fiscal has gone up by around 25-30 percent over the last year. Our marketing strategy has evolved to prioritise consumer-centric approaches, adapting to shifts in consumer behavior and market dynamics.
Each brand’s ad budget allocation reflects its target audience and market positioning. For Dixcy, we prioritise mass media, such as television and out-of-home advertising, to reach a broad audience. Despite the higher costs, digital advertising has grown with 20-25 percent of Dixcy’s budget now allocated to digital media to enhance reach, especially in saturated markets like Uttar Pradesh.
For Enamor, a mid-premium to premium brand targeting a metro-centric and sophisticated audience, our focus is primarily on digital media. Almost all of Enamor’s advertising is digital or out-of-home, with about 70-80 percent of the budget allocated to digital media. This approach leverages celebrity endorsements and targets high-traffic areas crucial for apparel and fashion brands.
What importance do marquee properties hold for your brands?
For Dixcy, marquee properties are crucial, targeting males aged 18 to 45 in SEC B and below segments, with a strong focus in Andhra Pradesh. We leverage blockbuster movies like ‘Pushpa’ for extensive visibility and engagement. Cricket, particularly through events like IPL and the T20 World Cup, also plays a significant role, supported by brand ambassadors Yashasvi Jaiswal and Mohammed Siraj. Meanwhile, Enamor enhances digital engagement and explores innovative digital properties.
How has the retail presence of the brands been growing? Heard quick-commerce has also become a significant channel?
Levi’s innerwear sells through a strong presence on e-commerce, 350 exclusive brand outlets (EBOs) and multi-brand outlets (MBOs).
Dixcy is already well-distributed in tier-two and tier-three towns, with a well-established presence in tier-one cities. Its growth will come from expanding across various geographies.
Enamor spans four main channels: department stores, EBOs, online platforms, and MBOs, including small mom-and-pop stores and we see significant opportunities across all these channels. There are more than 70 EBOs for Enamor, and we should cross 100 this year.
One of our most successful recent initiatives is leveraging quick commerce. Initially focused on groceries and FMCG products, quick commerce is now expanding into new categories, including lingerie. Our early results on quick commerce platforms have been phenomenal, and we anticipate substantial growth from this channel. With the convenience of shopping and return policies, online sales are expected to continue growing.
In terms of sales, please share the revenue breakup between the offline and online channels?
Dixcy predominantly operates as an omnichannel business, with approximately 98 percent of sales from multi-brand outlets (MBOs) and online platforms, excluding department stores and exclusive brand stores. In contrast, Enamor’s e-commerce segment constitutes a substantial 25 percent to 30 percent of our total business and is rapidly growing compared to offline channels.
Our increased investments in online channels are pivotal, given their rapid evolution. We prioritise leveraging technology and data-driven insights to enhance supply chain efficiency, utilising AI and predictive modeling for optimised inventory management across the network of 300 warehouses and beyond.
Also, while we explore AI/ML applications, their integration into our operations is still in early stages.
Read more: Positive budgetary measures for rural to increase advertising spends by 15 percent in H2
How optimistic are you of rural revival?
The recent period has presented significant challenges, particularly in the post-COVID environment, impacting FMCG sectors which have endured several challenging quarters. However, recent data shows signs of a turnaround. Factors such as a favourable monsoon, supportive budgetary measures, and increased liquidity are starting to alleviate stress, particularly in essential categories like basic consumer goods. Consumer behaviour, as noted by Alan Greenspan, often mirrors broader economic conditions, including in categories like men’s underwear. Despite pressures such as down-trading and reduced consumption, optimistic signals of recovery are emerging, bolstered by stable inflation and supportive economic policies. Over the next three to four months, we anticipate a gradual demand revival, particularly in rural areas, buoyed by these positive developments.