The Welspun Group, which supplies home furnishings to Wal-Mart and JC Penny among its clients, plans to start an e-commerce portal in the US to expand its customer base and avoid competition with its overseas clients, a top company official said.
Welspun USA's e-commerce plans comes at a time when only 3-5 per cent of home textile sales in the US is ordered over the Internet.
The New York-based company is targeting the mid to upper end of the American home textile market, pegged around $15-17 billion. A couple of established retailers such as JC Penny have built the online retail model over the last decade.
"We are looking at selling through the internet in the US as we do not want to launch own stores and compete with our retail clients. To begin with, we will sell our brands that will not affect the business of our buyers,'' said Bob Hamilton, director, Welspun USA, and advisor to Welspun Retail, the retailing arm of the Welspun group.
The information website is expected to come up by the year-end with plans to start the e-commerce site by the next year. He declined to share financial details, including sales from the proposed model.
The company, which also supplies to K Mart and Target, plans to expand its US share through three brands - Smart, Vitere and an affordable luxury label Luxus.
"The retailing of home textiles through the internet has its own limitations as it is more of a touch-and-feel process. Hence our emphasis will be on visual and decorative products for e-tailing."
Welspun is one of the largest suppliers of home furnishings and towels to the US retail majors and has a warehouse and showroom in Charlotte in North Carolina to cater to retail chains and a showroom and studio in New York.
Retail analysts said the e-commerce venture would work out well in the US as it has a deeper internet and television penetration.
"Both internet and TV are very strong channels of communication in the US. Products which do not require much feel and touch can do well in e-commerce,'' said Pinakiranjan Mishra of management consultancy Ernst & young.
Hamilton said Welspun, known for its terry towels, has diversified its product portfolio in the American market.
The company has entered into the decorative and basic bed and bath category.
The acquisition of a 76 per cent stake in Portugal-based Sorema-Tapates e Cortinas de Banho has allowed Welspun to enter the bath rugs business.
"We will have a complete portfolio of home furnishing products with Welspun's own facilities, Christy and Sorema. We can look at both developed markets and emerging markets,'' said Hamilton. In 2006, Welspun bought an 85 per cent stake in the UK's largest towel company, Christy, and turned around the loss-making firm within a year.
Welspun has also launched Christy in the US and plans to bring the brand to India soon.