Fab India

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SFI TERM PAPER

Value Chain Analysis (VCA) for FabIndia

Submitted By: Ebin S John

08MBI034

Abstract:

Fabindia( Fabindia Overseas Pvt. Ltd.) is an Indian Chain Store retailing garments, furnishings, fabrics and ethnic products handmade by craftspeople across rural India. Established in 1960 by John Bissell, an American working for the Ford Foundation, New Delhi, Fabindia started out exporting home furnishings, before stepping into domestic retail in 1976, when it opened its first Fabindia retail store in Greater Kailash, New Delhi. Today it has over 135 stores across India and abroad, and is managed by his son, William Bissell. In 2008, Fabindia had a revenue of $65 million, marking an increase of 30% from the previous year. Fabindia sources its product from across India through 17 community-owned-companies of which a certain percentage of the shares of which are held by artisans and craftpersons.

Here we will do the Value Chain Analysis for Fabindia. It is a very good and outstanding example of a unique strategy especially in the Indian scenario.

The Fabindia story is really fabulous. It started in the year 1960 with a strong belief that there is a need for marketing the vast and diverse craft traditions of India. Thereby provide rural employment. Their endeavor has been to provide hand crafted products which help support and encourage good craftsmanship. With 57 stores in the country and one each in Rome, Dubai and Guangzhou, Fabindia has managed to create a sustainable employment by providing jobs to close to 15000 artisans today.

INDIAN APPAREL INDUSTRY – ANOVERVIEW

The apparel industry is one of the India’s largest exchange earners, accounting for  nearly  16% of  the  country’s  exports.  The 1996 Indian textile exports approximately amounted to Rs. 35,000 crores of which apparel occupied over Rs. 14,000 crores. The Traditional clothes market is growing at 11% a year. An estimated 30,000 readymade garment manufacturing units and around 3million people are working in the Indian textile industry. Many leading fashionlabels  are being associated  with Indian products

However, till today, the industry is dominated by sub-contractors and consists mainly of small units of 50 to 60 machines. India’s supply base is medium quality, relatively high fashion, but small volume business. The weaving and knits sector lies at the heart of the industry. In 2004-05, of the total production from the weaving sector, about 46 per cent was cotton cloth, 41 per cent was 100% non-cotton including khadi, wool and silk and 13per cent was blended cloth. Three distinctive technologies are used in the sector – handlooms, powerlooms and knitting machines. They also represent very distinctive supply chains. The handloom sector (including khadi, silk and some wool) serves the low and the high ends of the value chain – both mass consumption products for use in rural India as well as niche products for urban& exports markets.  It produces, chiefly, textiles with geographical characterization (e.g., cotton and silk sarees in Pochampally or Varanasi) and in small batches. Handloom production in 2003-04 was around 5493mn.sq.meters of which about 82 per cent was using cotton fibre.

Fabindia Till Now from start

Founded in 1960 by John Bissell to market the diverse craft traditions of India, Fabindia started out as a company exporting home furnishings. The first Fabindia retail store was opened in Greater Kailash, New Delhi fifteen years later.

By the early eighties, Fabindia was already known for garments made from hand woven and hand printed fabrics. The non-textile range was added in 2000, while organic...
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