Rajeev Gopalakrishnan, Managing Director & Chief Executive Officer, Bata (Bata India) in an interview with CNBC-TV18 shared his thoughts on the impact of goods and services (GST) on the company and the outlook going forward.
He said, basically, GST in terms of profitability is neutral for them but since the tax for products below Rs 500 is 5 percent, they could look at expanding more into the tier-2, tier-3 markets more on the wholesale and franchise route. Products less than Rs 500 contribute about 35 percent to their overall revenues, he added.
However, the focus on premiumisation would continue but would also continue having balance between volumes as well as turnover and would look at expanding in smaller cities for sub-Rs 500 products.
He said, they are targetting a double-digit same-store-sales growth (SSSG)going forward. However, for FY18, it would be around 7-8 percent, he added.
With regards to new stores, he said they would look at opening 100-110 of them in FY18, of which 58 stores have already opened.
Talking about the competition from online stores, he said the online business they started 2-3 years back is today growing at over 70 percent compared to last year. This year they are targetting for USD 20 million business from last year's USD 10 million.
All investments for online business are in place and they are aiming to grow to USD 50 million in the next 3-5years.
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