Vaibhav Global Management Discussions



A. Digital Retail

The global e-commerce market reached a size of US$ 16.6 trillion in 2022. The shift in consumer behaviour during the COVID-19 pandemic took the e-Commerce industry forward at least by five years, with the industry expected to reach 27% of retail sales by 2026. Many other factors are also driving this growth including mobile device ownership, marketplace expansion and logistics.

The market is expected to reach US$ 70.9 trillion by 2028, according to an estimate, exhibiting a CAGR growth of

27.43% during the period. The E-commerce industry is usually classified based on numerous business models, which include Business to Business (B2B), Business to Customer (B2C), Customer to Business (C2B) and Customer to Customer (C2C). It offers various benefits to the seller including widening the reach, minimal transaction costs, better margins, direct communication between those involved and quick delivery of goods and services.

Growth Drivers

Online shopping provided a practical alternative during COVID-19 as retail locations closed and people stayed in their houses. In fact, global e-Commerce rose from 15% of total retail sales in 2019 to 21% in 2021, but now has stabilised at 22% of total retail sales, according to data from the International Trade Administration (ITA).


Rapid urbanisation across the globe is one of the key factors driving market growth.

Increasing internet penetration and usage of devices such as smartphones, laptops and tablets to access e-Commerce portals is also providing a boost to the digital retail market.

By combining IoT, big data, and digital solutions and placing fully integrated supply chain systems, omnichannel retailing not only keeps customers involved and reduces downtime, it also helps improve efficiency and effectiveness.

Surfing the digital wave

There has been a seismic shift towards digital shopping in the past few years. A new generation of over one billion digital native consumers are emerging in the next decade, creating new areas of growth for companies like ours. These next generation of consumers and their changing behaviours presents a significant opportunity and offers key insights for companies to capture the next wave of commerce-driven growth. At Vaibhav Global Limited (VGL), we are making more and more investments on the digital front to expand customer touchpoints. We also upgraded our technology infrastructure on Salesforce Commerce Cloud. Technology is also being utilised for marketing automation through the Salesforce Marketing and Service Cloud for paid and organic marketing, and for customer retention - email automation, SMS automation and chatbots. The platform is also being utilised in targeted campaigns based on customer segmentation.

We are leveraging digital as an enabler across distribution channels - TV, OTA, website, mobile apps, OTT, social media, and third-party marketplaces, further strengthening outbound logistics through GEEK+ robotic automation at US and UK warehouses.

The advanced robotic system GEEK+ improved our picking productivity and also reduced the error rates. GEEK+ provides customisable solutions in picking up material efficiently and making warehousing management affordable, efficient, flexible and safe.

Other strategic initiatives include accelerating digital paid campaigns, search engine optimisation, expanding affiliate network and live streaming.

During the year, we partnered with some of the latest technology employed vendors like North Beam and Triple Whale for attribution purpose. Through these platforms, we can track customers journeys in terms of order attribution types like linear paid, linear all, first click, and last click, among others. This is expected to optimise the marketing spend with better visibility of channel-wise sales. A strong IT team is supporting us in satiating the dynamic business requirements of our business. On the other hand, we are developing an internal talent pool to cater to emerging business needs.

B. Teleshopping

With an increasing number of television viewers across urban and rural areas, the global teleshopping market revenue is projected to reach US$ 48,900 million by 2029, registering a 1.3% annualised growth rate through this period. In addition, the increasing standard of living and changing consumer interest, as well as preference for new and innovative ways of shopping is boosting growth in the global teleshopping market.

Growth Drivers

Rising number of television sets

The global TV shopping market is estimated to grow at 1.3% in the next 5 to 6 years owing to a consistent rise in the number of TVs in rural and urban areas. The upgraded standard of living coupled with consumers increasing preference and interest in online shopping is providing a fillip to the adoption of TV shopping. The increase in standard of living is leading to a change in consumer preferences, as it offers convenience and eases placing of orders from the comforts of home.

Growing digitisation to propel product demand

There is a growing demand from customers for more accessible shopping options. Due to rising disposable income levels and expanding regional e-Commerce penetration, TV shopping is projected to experience decent growth by 2030. Increasing smart TV usage and rising regional demand for home shopping channels have been driving market expansion.

Availability of various payment methods

Numerous payment alternatives, specifically for TV shopping, offers significant growth potential. Several payment methods such as online banking, Apple Pay, EMI option, mobile wallet payments, debit cards and credit cards, which are a result of technological developments, are propelling growth in TV shopping. Methods other than cash-on-delivery and increased security features on these modes of payment have expanded consumers spending capability.

Pay TV viewership and Over-The-Air

There is a decline in Pay TV viewership owing to a rise in alternative mediums of live and local TV content. In the United States, subscribers in the targeted audience of Gen X (50+ age) and Baby Boomers (65+ age), in TV households, reduced to 66% & 77% respectively in 2021 as compared to 80% & 86% respectively in 2015. Decline in TV viewership is being absorbed by Over-The-Air (OTA) adoption, which has a coverage of ~22 million households in the United States and is projected to reach 50 million households by 2025.

Keeping pace with the growing trend, we enhanced our presence in OTA households while also serving our loyal Pay-TV subscribers. During last 10 years, we have reached 17 million OTA households in US as against 1 million in 2013. While cord shifting is happening at a healthier pace through OTA TVs, the potential of full-power OTAs is relatively huge and compelling. Today, Shop LC (US) has a coverage in almost 4 million full-power OTA households, whereas the total universe is around 22 million households in US. This implies a huge growth potential, as full power OTAs have relatively huge customer visibility and resultant higher customer lifetime value.

Over the Top Platforms

Viewership dynamics have changed the way consumers watch videos and consume TV content. Home entertainment has made its way via streaming services, enabling customers to consume the offered content. United States has a well- established infrastructure which generates a huge demand for OTT solutions in the region. The reason for dominance of developed countries is their well-established economies, which enables investments in new technologies.

Changing industry dynamics

Viewership dynamics have changed the way consumers watch videos and consume TV content. There is a drift from TV viewership to online content consumption, which acts as a major driver in growth of OTT players. Home entertainment has made its way via streaming services, enabling customers to consume the offered content. The United States has a well- established infrastructure which generates a huge demand for OTT solutions in the region. The reason for dominance of developed countries is their well-established economies, which enables investments in new technologies. market-41276741.html#:~:text=%5B188%20Pages%20Report%5D%20The%20 global,registering%20a%20CAGR%20of%2016.5%25

In the US, internet-connected video devices are expected to outgrow conventional media streaming devices in the next five years. This presents a growth runway for the teleshopping industry in US. At Vaibhav Global Limited (VGL), we are making planned, but conscious, investments towards OTT platforms. The response from these platforms has been encouraging, with revenue and customer count increasing year on year.

C. Leveraging Digital Space

The global social commerce market size, valued at US$ 727.63 billion in 2022, is expected to expand at a CAGR of 31.6% between 2023 and 2030. The increased adoption of online media and communication via digital technologies, the average time spent on these platforms and the convenience of buying products online is driving market growth. The convergence of content shopping, sharing, payments, and messaging features has enabled proliferation of social commerce in the past few years. Social commerce, and the use of social media platforms to drive and/or process online purchases, have led to new forms of shopping in a virtual environment. Seamless access to social media networking sites, coupled with the high level of impulse buying, especially amongst Gen Z and millennials, has created huge potential to increase sales and attract new customers. social-commerce-market#:~:text=The%20global%20 social%20commerce%20market,31.6%25%20from%20 2023%20to%202030.

We are adopting a multi-faceted approach - digital cum social commerce marketing through various platforms such as Facebook, Instagram, Snapchat, and TikTok, among others. We employ tools like media buying and performance marketing, influencer marketing, and customer experience management, among others, which is helping us drive sales through social commerce.

D. Proprietary Web Platforms

Post COVID-19, buying and selling of goods has undergone a substantial transformation. Also, as global internet access and adoption rapidly increase, with over five billion Internet users worldwide, the number of people making purchases online is ever-increasing. Companies are investing in developing their proprietary web-based selling platforms. One of the primary advantages of using a proprietary website platform for e-Commerce sales is that it offers a high level of customisation and flexibility. Leveraging latest technological tools have provided immense growth and innovation potential to companies to further upgrade their online sales operations.

To consolidate our website-based business, we are continuously strengthening and upgrading our tech platform with the latest packages. We expect that seeding these investments will provide required synergies for growth and will complement our proprietary TV channels and other digital medium.

E. Marketplaces

Marketplaces are online shopping platforms that facilitate commerce between sellers and buyers. The global reach of e-Commerce marketplaces helps retailers in testing and penetrating into relevant geographies quickly. On a marketplace, consumers can shop and compare options between different brands. Marketplaces offer express checkout features to ensure a seamless payment process.

VGL has been making relevant investments in marketplaces as part of its omni-channel strategy. Today, we are reaching out to customers on key platforms such as Amazon, Walmart and E-Bay. The Company is following a comprehensive integrated e-Commerce marketing framework with focus on customer acquisition. Its key initiatives include investments in targeted advertisement campaigns, viral gamification campaigns and high-quality backlink campaigns, among others.


#E-Commerce businesses going global

Global retail sales growth will continue to rise and take up more retail market share. Our addressable markets in US and UK are amongst the top 5 e-Commerce markets globally since 2018 and market estimates suggest that the scenario will remain the same for the next couple of years. ecommerce-statistics

#Increased connectivity, convenience and servicing

Internet usage and increased connectivity are significant drivers for e-Commerce growth, with customers spending more time online. This creates a significant opportunity for digital retailers to reach out to more customers with varied offering and tailor-made approach.

One of the top differentiating factors for e-Commerce platforms is supply chain and fulfilment capabilities, which empowers better customer servicing. Improvements in digital payments is also further driving changes in consumer behaviour and their preference for digital purchases. forecast-2022

#Voice search becoming commonplace

More than 65% of the users between 25-49 years use at least one voice assistant daily. It has become important for e-Commerce businesses to change the way they serve content with the prevalence of digital assistants like Alexa, Siri and Google Home, as well as the use of voice assistants in Smart TVs and mobile devices.

#Rise of Augmented Reality technology

The technology of Augmented Reality (AR) on e-Commerce sites enables consumers to see the new products in real action. Over 35% of the consumers in the United States are already using the technology of AR for product visualisation for numerous items like clothing, jewellery, artwork, flooring, among others.

#Growth in subscription-based products and services

McKinsey & Companys research states that subscription commerce is witnessing exponential growth. Today, online shoppers prefer subscription on e-Commerce sites. Introduction of subscription-based services and products into e-Commerce leads to higher customer retention ratio, greater business predictability and opportunities to upsell and cross-sell products and avoiding purchase of that product from another platform.

#Leveraging Al-powered growth opportunities

Based on the history of shopping and browsing, AI and machine learning assist in predicting the habits of online buyers. This not only improves customer experience, but also brings new opportunities for businesses to upsell and cross-sell. AI enables a website or online store to customise products uniquely for every customer. Several e-Commerce companies are already using this platform to personalise products for every customer.

#Rise of social and video commerce

Video social commerce, which are majorly driven by influencers, and have disrupted the current online shopping experience. Online businesses are increasing their budget on social commerce and revamping the existing social media strategy. Over 35% of online shoppers in the United States make at least one purchase through social commerce. Users can also share photos and videos on the platform, which further boosts the engagement rate. Social commerce is a small but rapidly growing segment in the United States, which is one of the largest addressable markets for the VGL Group.

#Need for rich user interface and user experience

Having a rich user interface (UI) and user experience (UX) is today a necessity to grab customers attention. Modern web technologies enable businesses to implement two versions of the entire site or specific pages to understand and analyse performance, with variations in terms of fonts, layouts, colors, UI or other metrics. Thumb-friendly navigation on mobile devices is another important UI aspect, with menus, navigation bars and other crucial buttons kept well within the reach of users thumb. VGL Group is also employing various tools to provide a rich experience to the end-user of our digital platforms. Few metrics that we focus upon include time on page, pages per visit, bounce rate, percentage of returning visitors, and returning visitor frequency, among others.



About the Company

Vaibhav Global Limited (the Company) is a vertically integrated fashion retailer with nearly four decades of industry experience. We are a global digital retailer of fashion jewellery, gemstones, lifestyle products, home decor, beauty care, hair care, apparels and accessories on TV and Digital platforms. We have a multi-channel presence across well- integrated platforms, comprising 24x7 proprietary TV homeshopping channels, OTA platforms, e-commerce websites, mobile apps, OTT platforms, social media platforms and third-party marketplaces. Our supply chain is spread over 30 countries, while our retail operations are in the US, UK and Germany.

Well-Integrated Omni-Channel Retail Operations

In an environment where sales channel boundaries are overlapping, our omni-channel presence drives and deepens customer engagement and provides a significant growth opportunity for the future. Our retail platforms provide us with direct access to ~141 million households, which are well served through our proprietary TV Channels, Websites, OTT and digital platforms, including marketplaces, social media platforms and mobile apps. We are expanding our customer funnel through continuous onboarding on new and prominent transponders, OTT, OTA and other digital platforms. This establishes our ability to attract a higher wallet share from our customers.

Two Pools of Product Verticals: Having ~75,000 SKUs

A major portion of up to 73% of our B2C revenue is dominated by fashion jewellery, with lifestyle products contributing to the rest of our revenue. The share of lifestyle products in total revenue is constantly growing, as we continue to enrich our product mix with enhanced customer engagement. Our product assortment includes different lifestyle products including home decor, beauty care, hair care, other fashion items and accessories. We have established a strong reputation for superior customer value proposition encompassing deep value, low-cost manufacturing, and quality products.

Being a Vertically Integrated Retailer

We are a vertically integrated retailer with an in-house manufacturing base for majority of fashion jewellery items and apparels. For the lifestyle products portfolio, we engage with third parties to cater to customer needs and provide them with a wide range of product assortment. This model helps us remain agile, scalable and flexible. Our deep sourcing capabilities provide assistance in sourcing products from an extensive network of over 30 countries globally, including India, China, Asia Pacific region, Africa, Europe and Latin America. The acquisition of Encase Packaging in the previous financial year of FY22 has enabled us with cost arbitrage, while navigating supply chain constraints. This robust vertically integrated supply chain helped the Company navigate supply headwinds and maintain our gross margins at 61%.

Leveraging our in-house brand strength

Strengthening the brand portfolio involves leveraging manufacturing and digital capabilities to optimise business outcomes. With 31 brands in the portfolio, the focus remains on enhancing their performance. Currently, revenue from branded products contributes approximately 29% to the overall B2C revenue mix, while our target is to increase this share to around 50% by FY27. This growth is expected to be facilitated by carefully selecting and integrating new brands into our portfolio, based on a comprehensive brand matrix that considers factors such as price laddering and unique offerings. Additionally, improving customer repeats and retention will be achieved by strategically leveraging brand archetypes, allowing for a deeper connection with customers and fostering long-term loyalty. By implementing these measures, the brand portfolio will be fortified, leading to increased market share, revenue growth, and sustained business success.

FY23 in Brief

After a massive jump in FY21, e-Commerce as a percentage of US and UKs overall retail sales has been on a decline. This reflects the effect of two macro environments - firstly, the opening of economies after almost two years of travel restrictions post-COVID, which led people to go out for revenge outings and in-person shopping, impacting the overall digital retailing industry. Secondly, the high inflation in western economies resulted in high level of uncertainty in consumers, leading to subdued spend on discretionary items.

As a result, the e-Commerce industry across the US and UK (which are VGL Groups immediate addressable markets) faced temporary headwinds with a declining mix of online sales. Despite the challenges, we maintained our business resilience, optimally utilised our resources and operated with a keen focus on profitability.

The Groups performance during FY23 has been against the backdrop of current moderating consumer demand amidst recession fears. In UK, economic situation is relatively more strained owing to the cost-of-living crisis. The situation further accelerated owing to strikes at major delivery partners during the third quarter of the year, thus impacting industry wide deliveries in UK. Further, during the third quarter, the Company faced a cyber-attack which resulted in temporarily disruption to our US and UK businesses. However, all our IT systems were restored in a record time of 72 hours.

Talking about the latest trends, there are some silver linings visible in terms of softening of inflation rates in US and UK (although marginal, but trend is positive). We hope this will trigger the consumer sentiments positively and create new opportunities as both economies continue to evolve. Further, the recent incidents around the financial sector in the US might also instil some fears in the minds of individual investors and consumers which can impact demand. Online retail sales in UK too are still struggling to grow, but we hope as the economic situation further improves, digital sales can regain the momentum. In US, though the overall online sale is increasing, the performance of teleshopping companies has seen a dip during the last few quarters. It is satisfying to share that amidst all this too, our market share continues to improve as we performed better than our peers.

Further, our 4R framework - Widening Reach, New Customer Registration, Customer Retention and Repeat Purchases - continue to be our key levers for growth. By the end of FY23, the reach of our TV networks was approximately 141 million TV homes, which is ~14% higher YoY. We are expanding our customer base by leveraging our diverse product portfolio and omni-channel presence. Our unique customer base currently stands at 4.6 lakhs, while new registrations are at 3.0 lakh. New customer acquisition this year was 2.2 lakh, which is 13% lower YoY, but higher by a significant 52% compared to pre-COVID period of FY20. Overall, comparing the period against pre-COVID numbers of FY20 will provide a more accurate and relevant perspective on performance of the business during the current period.

We are keeping a close eye on the situation, as the overall consumer sentiments remains muted. As a general consumer phenomenon, we have tweaked our offering to best suit consumer demands, such as high-end jewellery (that people tend to buy in inflationary environment), and communication on value-conscious buying to facilitate consumers spending power.

Notably, the year under review did not deter us in making long-term business investments as we continued to seed future growth levers. We have identified the following strategic initiatives and have been investing towards achieving these milestones:

Accelerating ‘Digital: Revenue mix to become 50% by FY26 from 37% currently

Our continued investments on OTAs and digital ecosystems comprising OTTs is expected to play a major role in expanding our reach and enhancing customer experience. Shop LC (US) and Shop LC (Germany) ventured into ‘live video commerce on selected social media platforms. Our customers can now shop on livestreaming on Facebook, Instagram and TikTok. This new shoppable stream is helping us acquire new customers in spaces they already love to frequently visit, i.e., ‘Social Media. We are also adopting a focussed approach on expanding our OTT coverage. In US, OTTs are projected to become the fastest growing video distribution medium. Keeping pace with this digital transformation, we have been investing in ‘Live & Interactive Apps. Our tech infrastructure, which was upgraded in FY22, is aiding us with informative data metrics to take informed decisions on buying behaviour of customers.

Expanding ‘Lifestyle Category: Revenue mix to become 50% by FY28 from 27% currently

Having a full-fledged sales network spanning across TV and digital medium, the Company ventured into lifestyle products in 2013. Today, this category contributes ~27% of our global B2C revenue mix. Being a natural extension of fashion jewellery with cross-selling potential, we are accelerating the expansion of this category, and aim to increase its revenue contribution to 50% by FY28.

Strengthening Own Brand Portfolio: Revenue mix to become 50% by FY27 from 29% currently

Another long-term strategic objective of the Group is to expand and strengthen the in-house brand portfolio, which are relatively margin-accretive vis-a-vis third-party brands. We are delighted to share that the acquisition of global digital brand rights of ‘Rachel Galley in 2021 is witnessing better traction with 100% YoY growth, albeit on a lower base. Today, we have 31 in-house brands across fashion jewellery and lifestyle products which contribute ~29% to our global B2C revenue. We have set an ambitious yet achievable target to increase our revenue mix from branded products to 50% by FY27. We plan to achieve this through new brand additions, brand matrix (price laddering), increase repeats and retention through brand archetypes.

Retail Operations

a. United States

Global headwinds, rising inflation and increasing commodity prices affected the US market during the year. Cyber-attacks also temporarily disrupted operations in the region. At Vaibhav Global, we took proactive measures to mitigate the impact of inflation on consumer sentiments, including expanding our portfolio of Gold and diamond products that people tend to buy in inflationary environment, content improvement, and accelerating household expansion through OTA, digital and the OTT medium. These headwinds are transient and we are placed to leverage the potential of this region.

b. United Kingdom

In the earlier year, TJC (UK) upgraded its channel position to 22nd position, from its erstwhile 50th position. The Freeview channel upgrade yielded results and continued to give a positive outcome in terms of new TV customer addition. Customer acquisition growth was a bit lower compared to COVID high but was 82% higher than FY20, the last pre-COVID year. During the year, several major delivery partners faced strikes which led to an industrywide impact on deliveries. Cyber-attack also temporarily disrupted operations in the UK business. We expect market-leading growth from the business in the long run.

c. Germany

We completed two years of our operations in Germany and faring well, with our performance being as expected. We are present on prominent TV networks, digital platforms including website, marketplaces, OTT and social media. Recently, we arm-partnered with Vodafone on its nationwide cable network. With this arrangement, we added 13 million households on Shop LCs TV network, thus taking the total tally to ~38 million households. Additionally, we are also serving ~2 million households in Austria. Our investments in digital too are yielding the desired results, and today digital contributes 29% to our revenue mix. Today, we are clocking ~Euro 1.4 million sales per month at higher gross margin of 61% and despatching 3,500 pieces per day. Our positive customer orientation has led to a CSAT store of 96%+.

Supply Chain

The acquisition of Encase Packaging in FY22 has enabled us to get the cost advantage by providing packaging boxes to our shopping channels at much more competitive prices vis-a-vis the erstwhile imports from China. Though the Group has a well-entrenched sourcing base and manufacturing capabilities, we look forward to further deepen our sourcing venues through localising at some of the best locations, thus enabling further competitive prices and margin improvement.

Strengthening Customer Trust

We constantly update ourselves with the evolving customer needs through continuous interaction and customer feedback. To maintain our customer-centric approach, we follow a 4R strategy of enhancing Reach, Registrations, Retention and Repeat Purchase, in addition to enhancing customer engagement. This also gives the business an objective assessment framework.

Our Budget Pay services help us provide a hassle-free shopping experience to our customers and enable them to make purchases based on equated monthly instalments (EMI) with an easy return policy. Launched in FY16, the service continues to gain good traction. Currently it contributes ~39% to our total retail sales.

Operational Performance Snapshot of FY23 Total Revenue

As discussed earlier, the broader economic challenges in our addressable markets of US and UK, consequent muted consumer sentiments and recessionary fears had a direct impact on our revenue stream. In FY23, in constant currency, Shop LC (US) and Shop TJC (UK) registered YoY decline of 11% and 8% in revenue, respectively. However, comparing this against pre- COVID period of FY20, the growth is stronger at 14% and 22%, respectively. We perceive the current revenue pressure as transient and remain optimistic about the future. We are confident of our ability to navigate these challenges and regain the earlier growth trajectory.


EBITDA margins in FY23 were at 8.4% of revenue vis-avis 11.0% in FY22. Drop in EBITDA margins reflect our planned investments on digital marketing, marketplaces, increased airtime for OTA platforms, and initial losses attributable to Germany. Although the margins appear to be lower, since last four quarters we have seen continuous improvement in quarterly EBITDA margins owing to cost rebase initiatives undertaken at the group level. We are optimistic of reverting back to our earlier levels of mid-teens of EBITDA margin in the medium- term, led by continued customer growth, improved productivity and cost optimisation.

Profit Before Tax

Profit before tax for the year was 141 crore (5.3% of revenue) versus 242 crore (8.8% of revenue) YoY. Planned investments on building digital capabilities, airtime investments and losses of Germany impacted our overall profitability. Adjusted for German losses and exceptional items, PBT would have been 193 crore, i.e., 7.5% of revenue.

Operating Cash Flows, Free Cash Flows and Dividends

Operating cash flow and free cash flows stood at 126 crore and 162 crore (90 crore after adjusting for term deposits worth 72 crore with maturity of more than three months), respectively in FY23. This is against 86 crore and -214 crore in FY22 and reflects the impact of capex reverting to normal levels and an increased focus on profitability.

Despite the challenging times, we continued with our endeavour of returning meaningful value to our shareholders. During the year, we declared a total dividend of 6.00 per equity share (including interim dividends of 4.50 per share). Going forwards too, we will keep our focus on growth and profitability with prudent capital management.

Key Highlights

Live 24/7 TV Shopping Network

At the end of FY23, the reach of our TV networks was approximately 141 million TV homes, which is 14% higher YoY compared to 124 million TV homes at the end of FY22. We reach TV homes through cable, satellite, telco networks, and over-the-air antenna, also called OTA platforms. During the year, TV contributed ~63% of total retail sales. Annual sales volume stood at 5.3 million pieces, with an average selling price of US$ 38.

Digital Sales

Digital Sales, which comprised sales from mobile platforms (including proprietary mobile apps and mobile web browser) and live TV streaming on proprietary digital platforms, third- party marketplaces and social media platforms, contributed 37% to the total retail sales. Revenue from Digital Sales declined marginally by 1% YoY, compared to 8.5% growth in the previous year, despite the onslaught of macro-economic challenges during the year. Volumes were 4.44 million pieces in FY23 vis-a-vis 5.48 million pieces in FY22, while the average selling price per piece stood at US$ 27.4 in FY23, as compared to US$ 24.2 in the previous year.

B2B Sales

In FY23, B2B revenue stood at 81 crore compared to 67 crore in FY22, indicating a growth of 21%, owing to our focussed approach on the B2B segment. Directly serving B2B customers from the existing supply chain in Asia led to better ROIs. With B2B having no front-end expenses and elevating our scale to supply chain, we offer a compelling value proposition owing to our manufacturing strength and pricing leverage.

Key Financial Ratios Standalone


FY23 FY22

Explanation to significant changes, wherever applicable

Debtors Turnover (Times)

3.07 4.97

Owing to increase in receivables and corresponding decline in revenue

Inventory Turnover (Times)

3.71 4.20

Interest Coverage (Times)

30.39 89.87

Increase in interest cost and reduced profitability

Current Ratio (Times)

2.15 2.14

Debt-Equity Ratio (Times)

0.18 0.16

Operating Profit Margin (%)

20.5% 20.6%

Net Profit Margin (%)

22.9% 26.3%

Return on Net Worth (%)

16.8% 23.2%

Impact of decline in profitability



FY23 FY22

Explanation to significant changes, wherever applicable

Debtors Turnover (Times)

11.40 13.81

Inventory Turnover (Times)

4.26 5.17

Interest Coverage (Times)

29.62 62.03

Increase in interest cost and reduced profitability

Current Ratio (Times)

2.36 2.25

Debt-Equity Ratio (Times)

0.10 0.09

Operating Profit Margin (%)

8.36 10.93

Net Profit Margin (%)

3.91 8.61

Impact of decline in profitability

Return on Net Worth (%)

9.03 22.68

Impact of decline in profitability


• A strong and omni-channel presence in US, UK and Germany retail markets, also having presence across proprietary

TV home shopping, proprietary e-commerce platforms, social and third-party marketplaces

• A vertically integrated supply chain with multiple sourcing options

• Providing deep value to customers with ability to offer lowest ASP

• In-house manufacturing units providing requisite flexibility

• Keen emphasis on sustainability as expected by consumers

• Budget Pay: Accounting for 39% of our global B2C revenue

• Solid IT infrastructure with integration on AI, IoT and automation

• Strong governance approach, management expertise, a professional management team, and an independent Board and reputed Auditors

• Easy scalability and scope of expansion into newer geographies

• Curated collections (such as Sukriti, Bali Legacy, Bali Goddess and Milaan), homegrown brands (such as Tamsy, Iliana, Rhapsody, J Francis, Karis, Elanza, Strada, Genoa and Eon 1962) and exclusive designer brands (such as Giuseppe Perez, Rachel Galley, Lucy Q) adding to our strategic product mix

• Human resource management and learning and development resulting in high retention rates and acquiring the right talent

• Diverse products, deep value proposition and engrossing content owing to customercentric business approach

• Exposure to global challenges, including risk from fluctuations in forex markets

• Cord cutting in linear TV leading to viewer migration to connected TV. This we are attempting to mitigate by increasing investments on digital platforms like OTAs, OTTs, Marketplace and Social DR. Also increasing our Over The Air (OTA) footprint, where the cordcutters are migrating. This service is free to consumer therefore gaining marketshare.

• Growth in online shopping

• Change in consumer preference resulting in a growing need for omni-channel presence

• Portfolio expansion to newer categories including home, beauty and apparels

• Growing geopolitical tensions

• Sharp increase in competitive intensity with advanced logistics capabilities

• Consumer sentiments impacted due to rising inflation in addressable markets of US and UK

• Cost of living crisis in UK owing to unprecedented economic headwinds

• Potential supply chain issues in future

• Potential rise in cyber-attacks, especially post-COVID


During the year FY24, we expect to deliver revenue growth within 8% to 10% range. However, our mid-term outlook remains intact, and we expect to deliver mid-teens revenue growth in subsequent periods with operating leverage. We have increased our market share across geographies, driven by our deep value proposition and well supported by a growing range of products and increased market penetration.

Going forward, our 4R framework - Widening Reach, New Customer Registration, Customer Retention and Repeat Purchases - remains our key levers for growth. We are expanding our customer base by leveraging a diverse product portfolio and omni-channel presence.

Amidst global macroeconomic challenges, the underlying long-term business prospects remain promising, and we are well prepared to capture future growth. We shall closely monitor the economic landscape and adapt to the strategies to take advantage of the growing opportunities. We are optimistic about the future and also confident of our ability to navigate the challenges and achieve market-leading growth. We look forward to maintaining a balance between growth, investment, and quarterly pay-outs to generate sustainable value for all our stakeholders.

Robustness of our business model will continue to drive forward our growth ambitions. With long-term business prospects, we will continue making tech-related investments and improvising digital platforms and marketing strategies. We shall remain well-prepared to capture future growth, improve margins and maintain operating leverage with multiple growth levers.


At VGL, we continued making strategic investments in technology adoption, upgradation and on our digital platforms and automation. We leveraged AI and other technological mechanisms to enhance operations and customer convenience and incorporated features such as wallet integration, new ERP, and deployment of product personalisation. Technology advancement supports us in being relevant to our customers, in aligning ourselves with evolving market trends and staying ahead of competition. Technology also strengthens our internal processes and protocols.


We have received Great Place to Work certification across all operating entities within the Group (except Germany). Mr. Sunil Agrawal, our Managing Director, was recognised as one of Indias best leaders in times of crisis by Great Place to Work.

Our employees are the backbone of our business success, and we prioritise their growth and well-being. We also strive to enhance employee experience in diverse ways, while investing in their professional development. We have an open and dynamic work culture that respects inclusivity and inspires individuals to contribute to their best abilities. We provide an enabling work environment, care for the wellbeing of our people, and act on their feedback.

This is duly recognised by our workforce and the external agencies.

During FY23, the health and well-being of our employees continued to be our top priority. In FY23, we initiated several employee engagement initiatives such as town halls, management training and engagement programmes. We also conducted several training initiatives for Leaders, Managers and shop floor employees, including the World of Business Forum on Negotiation Skills by George Kohlrieser, Goal Setting, Humanocracy: Creating Organisations as Amazing as the People Inside Them, Effective Communication and Design Thinking.

We continued to engage with our people and motivate them to help them perform to the best of their abilities. We remain inspired by the idea of Humanocracy (propounded by Gary Hamel and Michele Zanini) and are implementing its principles across the organisation.

Focus also remained on engaging with our employees through formal and informal communication and training forums, and on maintaining cordial industrial relations. Moving ahead, we will keep emphasising on the well-being of our employees and expanding our team. As on 31 March 2023, we had 4,140 employees on our payrolls, including outsourced labour.

For more details on Human Resources, please refer to our ESG report ( and Human Capital section in the Integrated Annual Report.


Risk management is core to our business strategy and continuity. VGLs robust risk management framework ensures efficient and timely identification of risks, and accordingly, the Group formulates strategies to mitigate these. In effect, it ensures better management and risk reporting systems. Activities of the organisation are inter-related at all levels and drive an enterprise-wide risk management framework with a strong focus on risk assessment, risk management and risk monitoring.

Since it is critical to deliver on the Groups strategic objectives, risk management is embedded in our business-critical activities, functions, and processes. Our risk management framework is designed to manage rather than eliminate the risk of failure to achieve business objectives and provides reasonable, and not absolute assurance, against material misstatement or loss.

Materiality and risk tolerance are key considerations in decision-making. The Company has put in place a robust Integrated Risk Management Framework, aligned with the internationally accepted framework issued by the Committee of Sponsoring Organizations (COSO). VGL Enterprise Risk Management (ERM) process is centred around stakeholder interests and enables to strengthen the risk mitigation while capitalising on opportunities efficiently.


The responsibility for identifying and managing risks lies with every manager and business leader. Additionally, we have key risk governance and oversight committees in the Group. These are:


We are socially responsible corporate citizens, committed to serving the community. VGL continues to work in the fields of education, healthcare and poverty alleviation to achieve its CSR-related goals and objectives. At the Group level, we contributed 6.93 crore (4.9% of reported PBT) towards several CSR initiatives in FY23, as compared to 8.21 crore (3.4% of reported PBT) spent during FY22. During the year, the Company was conferred with ‘Certificate of Recognition by ICSI for its CSR activities.

The mid-day meal programme ‘Your Purchase Feeds..., which isourflagshipCSRinitiative,isaimedat uplifting underprivileged school-going children. Through this programme, a child is provided with a free wholesome meal, for every product sold at our retail channels. We have provided 75 million meals to under-privileged children since the inception of this initiative, and currently serving ~50,000 meals every school day

For more details on this, please refer to our ESG Report for FY23.


We have a well-defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions and are committed to a high level of corporate governance.

In keeping with this commitment, we have a robust well devised internal control framework which are appropriate to the nature and size of the business, and commensurate with the scale and complexity of its operations. The Internal control system is designed and implemented, which inter alia, helps us to safeguard our assets, timely preparation of reliable financial information, maintain accurate accounting records, prevention and detection of frauds and errors and provide reliable financial information and other data to our stakeholders.

We ensure periodic internal audits, management reviews to ensure a robust internal control system. We also have a set of well-documented policies, guidelines, and procedures. For smooth business execution, we have in place a distinct organisational structure, authority levels and internal rules and guidelines. We remain committed to strict adherence to all applicable laws and statutes, and intend to undertake further measures, as necessary. In accordance with the Companies Act, 2013 and globally accepted risk-based framework as issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission, we have outlined the current system of Internal Financial Controls. This technologically advanced robust framework details entity- level policies, processes and Standard Operating Procedures (SOPs). We use technology supported platforms to keep the Internal Financial Control (IFC) framework robust.

We ensure robustness of our internal controls across multiple functions and locations due to our strong internal audit. Corrective measures are taken by the concerned process owners in their respective areas, as indicated by the internal control function. The Audit Committee of the Board is duly apprised about the significant audit observations and corrective actions. Our internal audit function is carried out by Deloitte Touche Tohmatsu India LLP, an external independent firm, also responsible for reporting its findings to the Audit Committee. The effectiveness of the internal control system is closely monitored by the Internal audit function, also responsible to ensure that the system remains competent and robust. The Audit Committee reviews the risk-based internal audit plan followed by the Internal audit function.


Statements in the Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations, or predictions, may be forward-looking statements within the meaning of applicable securities, laws, and regulations. Actual results could differ materially from those either expressed or implied.

Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/supply and price conditions, variation in prices of raw materials, changes in government regulations, tax regimes, economic developments, and other incidental factors.