Textile and furnishing company Welspun Living has incorporated a holistic and sustainable approach to growth. It is looking to have a prominent business-to-consumer presence in India in the coming years.
Dipali Goenka, the CEO of Welspun living, told The Core, “In the third quarter, this time, our emerging businesses contributed around 28% to the top line as well. Definitely that's an opportunity… (to become) a popular consumer brand. So a B2C (business-to-consumer) presence in India as well,” Goenka said.
Goenka said that the company is aiming to achieve a sales target of Rs 15,000 crore by 2026. The company is also expecting a surge in its overall revenue driven by strategic emphasis on the flooring business, which is expected to bring a growth of Rs 2,500 crore in this particular segment. Welspun Living invested about Rs 2,300 crore in expanding its flooring business and saw a 57% growth in this sector for the current year.
The Mumbai-headquartered Indian multinational conglomerate Welspun Group has a market capitalisation of Rs 15,053 crore. The company has business engagements with 50 countries, with a distribution network spanning 32 countries, including major markets such as the US, Canada, the UK, and Australia.
In The Core’s new weekly podcast series Future Compatible, business leaders will discuss their plans for keeping businesses agile in times of global uncertainties. In its first episode, financial journalist Devna Gandhi spoke with Dipali Goenka to understand the company’s growth trajectory despite global challenges.
You're coming off a few weak quarters, but your latest quarter has been outstanding. And one of your best yet. Did you expect this?
The market picked up. Last year was a complete slowdown, which I think was an aftermath of Covid. The freights went crazy. The commodities went crazy. And as a result, the retailers had very expensive inventories. By the end of it, the kind of de-stocking that they did, that's the reason the orders started coming in as well.
Let me just give you a little perspective of what Welspun Living Limited is all about today. The core businesses definitely are a very big part of it, then you have the emerging businesses as well. It’s a combination of both last year, and I think I've always seen that after these kinds of contagious illnesses that come in, there is that kind of slowdown that happens to an economy across the globe.
And you were talking about now you're not just home textiles, your flooring, your advanced textiles. Do you think all these diversifications helped, because you've had reasonable growth in your flooring business?
This is all part of the vision that we have as a company. So when we talk about home textiles, the clear thing that comes to your mind is that Welspun India or Welspun Living is a manufacturer. But today, yes, B2B (business-to-business) is an integral part of what we do. But, our consumer businesses also are taking on.
And when we talk about flooring, which is a part of what we are taking on, this is going to be a part of our home solution that we have. And consumer business is going to be where we are going to be seeing India grow. As Martin Wolf has said, by 2030, or 2050, India will be consuming 30% of the consumption, more than the United States of America (USA). So you can really see that happening now. And India is growing. And for us, India is going to be a very important market. And of course, the USA as well, as it consumes around 34% of the world's consumption of home textiles as well.
And leading from that, given that India is a leader in exports of home textiles to the US with a very significant market share, you are at the forefront of that. But now that the economy is growing at single digits, that is going to be a challenge. How are you going to be tackling that? And also Europe, people are almost proclaiming Europe as a near-dead economy, which is obviously an exaggeration. But how are you dealing with this?
There's no one thing, let's be very clear. And as I earlier said, as well, the USA will continue to be this mammoth that's going to consume and guzzle the kind of home textiles because it consumes 34% of the home textiles globally. Even that single digit is important. Let me just give you a perspective of the landscape of retail in America first, and then I'll come to India as well.
When we talk about the USA, you have a landscape of mass retailers. You have the clubs, you have departmental stores, and we were the private label. And now if I look at where we are today, the consumption of mass retailers is growing, the clubs (segment) is growing, and the discounters are growing. The discounters and mass retailers are kind of positive and create results, comparatively and you will see the footfalls there.
But it is the departmental stores that are struggling. Now when I come to Welspun, where we are. I think we're not just doing towels and sheets, we are also doing fashion bedding, we are also doing rugs and carpets, and of course, the flooring. And for us, the whole thing is about the share of shelves. When I talk about the share of shelf, which is not just the core and private label that I'm talking about, I'm going to increase my share of shelves and how am I going to do it? I'm going to do it with the kings of the brands that I'm talking about, the licences that I'm talking about. And you know, Martha (Stewart) came to India as well, right now, and we have a licence for Martha and America. So that gives me a share of shelves not only in the terms of towels and sheets, but in the other categories as well. Other retailers as well, which are not present otherwise. And I have something like a creative collab, that I have these influencers on the West Coast, East east coast, and they give me a turnaround not not just in the United States of America, but in Canada as well. That is the kind of opportunity they have. Now that happens.
The other important thing, India is at the forefront of outsourcing. And you know where China is, and China will be continuing to do what it is. But I think India stands a great opportunity in terms of outsourcing and being the country of sourcing for a lot of countries now. So it's going to be also the displacement strategy that I think a lot of retailers are looking at, because India is a strong democracy. And it is becoming that supply chain partner to lots of retailers as well. I think that's something I will see continuing happening along with the share of shelves that will continue to take off.
Let's come to the UK and Europe. The UK and Europe consume another 34% of the consumption of home textiles, they are challenged. So I have tied up with a brand called Disney here, Disney Marvel here in the UK and Europe. That gives me an opportunity to get the share of shelves. There are a lot of retailers that you wouldn't be even aware of, a lot of distributions that the brands go to which we are not even aware of. It also gives me that share of shelves and the extension of that share of shelves, that's going to be an opportunity again. The FTA (free trade agreement) which is right around the corner for the UK will be another opportunity where you know that we were at a disadvantage compared to countries like Pakistan and Bangladesh. I think that's going to be another important aspect to talk about.
Now let's come to the other part of the rest of the world, which is like the GCC countries (Gulf Cooperation Council), we're definitely going to see growth here. Now with Australia, we already have an FTA. That gives me an opportunity to penetrate not only with home textiles, but with my flooring, and hospitality as well. Japan again, is an opportunity, because there's a displacement of China happening there as well. If I look at this kind of a global landscape, this is where India has an opportunity, not just Welspun.
And now when I come to India, India is going to be a very big opportunity. We've been into this market since 2003. When I started my stint into business, I launched Spaces here. Today, if I look at where we are, I think we have that lead here, and we are the highest distributed brand for home textiles now. We have 15,500 stores for Welspun, in the MPOs I'm talking about and Spaces is the most popular brand in modern retail as well. And if I look at our 2026 numbers, we are looking at around Rs 15,000 crore for Welspun Living with a CAGR (compounded annual growth rate) of 23%. And retail is going to be (Rs) 1,700 (crore) out of that. And (Rs) 500 (crore) is going to be flooring as well in that. And if I look at the flooring business in totality, that's going to be around Rs 2,500 crore and advanced textiles at 1,000 crore and we can see that happen. If I look at the third quarter, this time, our emerging businesses contributed around 28% to the top line as well. Definitely that's an opportunity. But that's a part of the strategy in terms of becoming not only just an important b2b partner to our retailers and partners, but also a consumer popular brand. So a b2c (business-to-consumer) presence in India as well.
The anti-China sentiment, do you think that is substantial right now, or are they coming back? Is that sentiment going to help the Indian sort of companies maintain their numbers, even in a slowdown?
Let me give you a perspective here. First of all, China is the factory of the world. Even to compete with China, China is a decade or decade ahead of India, and even in the terms of what we're talking about. As an opportunity, China needs it, right? They have their satellite extensions into Vietnam, they have satellite extensions into lots of other countries. Having said that, India has a great opportunity in terms of the relationships that we have with lots of countries and becoming supply chain partners.
Now let me talk to you about even cotton. Earlier, China was the biggest exporter apart from the biggest grower of cotton. But today, if I look at India, India is becoming the biggest exporter of cotton, because of the Xinjiang cotton and the traceability issues that China had. And the kind of relationships that are happening, I think, India definitely stands a chance there. And not only because China is at a disadvantage, because India has an opportunity here.
As you said, India is a democracy where relationships are forged with rational, sustainable partners.
Yes, you're absolutely right, because even if I talk about the whole supply chain, when I talk about cotton, which is the raw material, and also, in terms of manpower, I think we have it all here. And if any kind of infrastructure that we're talking about. I'll give you a perspective about flooring. And I think that's where we've seen a kind of an upside. We are actually one of the most modern plants in this part of the world, for flooring, a lot of its supply chain is dependent on China. But we are indigenising the whole supply chain in India. That's a huge opportunity that we have, and also with the kind of MSME partners that you build the relationships with. Today, Welspun works with more than 200 such kinds of MSMEs here. What it is doing is also building an ecosystem here. And the opportunity that we have as Welspun here is about sustainability. That, again, is a very key index to whatever we are doing. Our vendor partners are on a platform called Sedex. In IT, people have already registered and we are continuing to grow that. I think the whole thing is going to be in a way of sustainable growth that we're looking at here.
Pressure points, obviously for the future, do lie in the fact that the US is precarious, if yet growing, and the UK in Europe pose definite sort of risks, freight costs, and war. The recent war in Israel, has it had an impact? Obviously, freight costs have started normalising but all these things pose a threat, right? Like war, climate change, global instability. How do you deal with these pressure points, even Forex volatility? There's sort of pressure from everywhere? While there's opportunity? How are you dealing with that?
Last year was a very interesting year for us. And for me, as a leader, it was an introspection time to look at how we were working. And the thing is, don't the other industries work like this? Closer home, you have gold, right? When I look at gold, there's a turmoil, there's kind of an MRP that is set. But how do you work backwards? Now, post Covid, the world hasn't been the same, it has changed forever and changed for good. These challenges are going to be there. The war is going to be there. It was Ukraine, and now, there's another war that's coming. And the challenges will be there, the freight, commodities. How are we going to take our destiny in our own hands? How we are going to look at ourselves is what we're working on. A big example I'll give you is about Pakistan. They only have one kind of cotton. They are the most competitive cotton, how do they do it? They made it into the advantage. We have lots of lessons to be learnt. And that's what I did last year. There are going to be challenges and they're going to remain. America, you know. But we are very clear on our path or what we need to do here. And that's what we're focused on here in terms of commodities. Yes, freight is a challenge. I myself went and made all the freight parties that we have.
Do you keep your contracts really agile now? Rather than long term?
They have to be. And relationships are agile, open ended everything is a mix of everything.
What about climate change on commodities? Climate change is a serious threat. How do you plan for that?
Climate change is going to be a reality and I'll tell you one thing. We took this on very early and sustainability is kind of everybody talks about it as a buzzword. Sustainability is only the way forward to do business sustainably. Now imagine Anjar and we used 30 million litres of water there every day for home textiles. But not a drop of fresh water is being used, because we invested in the STP (sewage treatment plant) there, and he paid loyalty to the villages. The farmers get water for irrigation. And there's potable water for the communities there.
Similarly, now that the green, the GHG (greenhouse gas) emissions, we're going green, as a company, and as well as for Living by 2030, we want to be green. And the other things as well reaching out to communities, 100,000 people, we are working with the farmers. This is going to be for real, it is about how you want to do business.
For us. Dow Jones Sustainability Index is for real. We get measured every year. Our index is now 59, I am targeting 70. I'll have to also look at my scope three now. I upcycle rags for Welspun Living at Anjar and the other factories, and my women are using it to make rugs and carpets and cushions out of it. And they are earning around Rs 20,000 per month. And they're operating their bank account and the child is going to school. It is all about everything, embracing the communities, looking at what the reality is going to be in terms of sustainability. This is the only way we got to do business. And it's going to be the only way forward for all of us here. Even in terms of governance. I always tell everybody when we share numbers and our results, I always say, please stop judging us and evaluating us quarter-on-quarter, look at the long vision that we have and the sustainable vision that we have. We are going to be best in the terms of sustainability, we are going to be best in the terms of governance. And that is the resolve that Welspun Living has, and I have.
That's fantastic. Lastly, given the challenges that have happened over the last couple of years, you've been an incredible leader. I think even before Covid, there were challenges, but after that there have been global uncertainties and threats that have come up that are new that India hasn't seen before, that globally, companies have not seen before. How do you keep leadership, agile, mentally strong? There must have been moments in the last couple of years where you feel incredibly nervous for the future.
Yes. Sometimes as leaders, I think all of us go through our own phases where you wonder what needs to be done. But there's one thing that I always do - communicating very transparently to my teams, even the challenges, and it is about collaborating and owning the responsibility together. I remember the last year when the commodities went up, but I think each one of us, even the factories, we all work together to see how we can make the product more competitive. Even during the Covid times, I was more in front of my people on the floor, celebrating with them every small thing. That we are together. And I think it's about communicating and talking about other things as well. Industry 4.0 is for real, AI is for real, predictive analytics is for real. So for me, now my whole factories are working on Industry 4.0. One of my programmes, which my teams took and led, got a NASSCOM award as well. Key thing is to get them and lead it and see for themselves. Make them your leaders, make them the owners of that vision is where things happen. I have 17,000 people, how do I inspire them? I have a programme called Manthan where people on my shop floor are recognised for the kind of innovations that they do. These are the small, small things that really make a difference.
Do you think India is going to face its own challenges? Unemployment? Upskilling, lack of upskilling. Do you think there is going to be some impact of the global recession on India and Indian jobs for the future? Is that going to be a big challenge? Not to mention AI?
No, no, I think AI is an opportunity. And it is about upscaling. My teams at Welspun Living in India are being upskilled. My blue-collar workers are being upskilled for industry 4.0. The programmes that I'm doing for my teams as well. There is a challenge, but there’s an opportunity. We are talking with the largest population in the world. We're talking about the largest manufacturing in the world now. There'll be jobs for everyone here. And from the blue-collar to the white-collar to everybody here, and along with the women now. That's the opportunity that the government is giving us as well and getting recognised. Definitely, challenges will remain, but they're always solutions for everything as well. And we also have to as corporations take the responsibility and accountability to make that happen. It's not just going to be the government, we have to work together to make that happen.