Things changed for Sabare in 2001 after retailers started dealing with the exporters directly. “We started exporting to the US from 1997 and it was only then I hit upon this idea of setting up bases outside India. This allowed us to think big and take bold risks,” he explains.
Direct sourcing by retailers helped Susindran come up with new strategies for the company such as setting up manufacturing centres outside India, which reduced shipping costs and helped Sabare operate closely with the retailers till the product was sold.
In fact, the new strategy has worked well for the company, improving margins by 5 per cent for retailers, prompting them to place more orders. This has also helped Sabare register in a staggering CAGR of 111.1 per cent as compared to 37.7 per cent of Gujarat-based Welspun India and 16.02 per cent of Mumbai-based Alok Industries in 2005-06.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.