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Khadi ties up with retailers to enter shopping malls

Khadi has finally entered shopping malls in tieup with retail chains, in what is seen as an attempt to tap the middle-class market it has been losing to Patanjali.
Last week, Khadi made a beginning through a tie-up with retailer Globus to launch Khadi Korner, a shopin-shop concept, at an outlet in Noida. The plan is to move to Chennai, Varanasi and Ahmedabad later this month. Next month, Khadi & Village Industries Commission (KVIC) will go for a similar launch in Mumbai in tie-up with Cotton Bazaar. Discussions are underway with Shoppers Stop and Big Bazaar too, sources told TOI.
For years, KVIC had stayed away from shopping malls as it didn’t have the financial muscle to spend anywhere between Rs 2-5 lakh a month on leasing space. So, it came with a different model, where it will have a revenue-share arrangement with retailers, which could range between 10% and 20% of the sales.
Gone are the days when loyal customers travelled long distances to reach khadi bhandars. Today, availability is one key focus area and we want to be available at the doorstep,” said KVIC chairman V K Saxena. The initial experiment in Noida is for a fortnight but, Saxena said, the initial sales numbers are promising. On Sunday, sales were estimated at around Rs 28,000, just a fraction of the over Rs 25 lakh that the flagship store in Delhi’s Regal Building notched. The sales staff at the Noida Khadi Korner, however, said things could be better starting with a more prominent banner at the entrance. In addition, they complained that the space allocated is not too prominent.
Currently, what’s on offer are garment and cosmetics but depending on the feedback more products could be added. Over the last few years, Ramdev’s Patanjali, which was pushing for a tieup with KVIC, has massively ramped up its presence in shopping malls, especially through the franchisee route and has eaten into the government-backed entity’s market for products such as spices and honey.