 Hello and welcome to Pitch Brantor. After spending close to two decades with the German sportswear major, Puma, and taking them to the pole position in the Indian market, my guest today then decided to travel the road, less traveled. He then put on his entrepreneurial hat and launched Agilata Sports and his first move was the acquisition of B2B's sportswear manufacturing firm, Mokitsha Shoes. They even managed to raise over 400 crores. Now you can say he has literally hiked over the Alps and forged a partnership with an Italian major. Well, he does seem to have his running shoes on and to tell us more, please welcome Abhishek Ramwali. Abhishek, welcome. Thank you. Thank you for having me. Abhishek, first can you just tell us more now that you plan to bring in the Lotto into the Indian market. So what was it that prompted you to make this move and what are you seeing the synergies with the parent company? Well, before I get to Lotto and our license partnership with Lotto as a brand, I would say that the thesis of setting up Agilitas was primarily to see that sportswear is growing phenomenally in India and by all terms, this is going to become like forex of today's size in the next eight years, driven by a lot of macro factors. Most importantly, with the widening of the Indian middle class and more disposable income and India having a very young demographic. So my thesis to set up Agilitas was primarily stemming from that. While we were doing that, I didn't want to just play into one part of the value chain. So we decided between Amitathul and myself, the co-founders of Agilitas that we should play end to end from manufacturing to retail. Our first acquisition was a manufacturing company and now we are getting into the consumer business, our investment in the consumer business. Our first announcement on the consumer business is acquisition of a 40-year license with the Italian sports brand Lotto, which has a lot of history, a lot of heritage and authenticity around sport and has also a very substantial brand recall in India. Now with this license, which is around manufacturing, so we have the license for manufacturing, design, product creation, distribution and retail on an exclusive basis for certain markets led by India, we are going to really get into the entire wide spaces that we believe today exist, which would be to deliver high quality sportswear, both on the performance in athleisure side to the Indian consumer at a price which is in favour of the consumer. You mentioned the forex growth, so can you give me an idea about the market size currently and where you see it down the road? Yeah, so the market today by various estimates as well as reports suggests that the premium and the mid-price sportswear market performance in athleisure put together is about a couple of billion dollars. I am ignoring the extremely entry price point product categories and the price points, but I am talking more of the mid to premium, that is couple of billion. What is very interesting is what I previously said that this is going to become 8 billion by 2032, so the size of the price is really growing at the behest of a lot of other things that is happening around the category and even beyond that. You mentioned about the manufacturing acquisition, can you elaborate a bit more on your business model? Well, yeah, so Agilitas is a full scale comprehensive sportswear company. We aspire to be India's largest sports company. We also aspire to be originated from India, but for the world we do have aspirations to take an Indian sports company global. In the quest for this, we want to play on manufacturing brand management as well as retail and that is why our first investment was on a pure play manufacturing company, Mochiko Shoes which was set up 16 years back by Virender Aval and five other promoters of that company and they went on to build India's largest sports footwear manufacturing company which is still in its very nascent stage because on the apparel side manufacturing in India, India has been around for decades onto this but sports footwear is very early days and hence has a huge headroom for growth. Most of the global brands today that is a customer of Mochiko Shoes whether it is Adidas, Puma, Skechers, New Balance, A6 and all these brands want to actually move their supply chain closer home to India due to various reasons of speed and agility and also being an end-to-end play from India and because of this there is a lot of growth on that front so that is one business which Mochiko is already the largest in the space of sports footwear manufacturing delivering to India and that has a potential to become 3x this year. Mochiko's revenues in this financial year will be to the tune of 1000 crores which is quite substantial and we see this to go to two and a half thousand crores in the next four to five years. On the other side we would be investing into consumer business and with different brands with different positioning and offering for the consumers so we will be investing into three to four brands not ten but also not one because we want to be relevant to a large base of target consumers in India and the starting the first brands that we are announcing is Lotto but there is more in the offering and all of these brands will be complementing each other it will not be like an overlap competition to each other because we want to increase our addressable market by having all these multiple brands all these brands will have separate management team and resource capital allocated to these brands for growth so that you know we don't want to spread ourselves thin but we build these brands very very deeply into you know from a brand perspective and into distribution perspective and product perspective so all of these brands will be built very deep with separate management teams so yeah we are we as a business we are into business to business contract manufacturing we will be into consumer businesses with multiple brands but when do you foresee that Lotto will be out in the market when are you looking to launch it yeah we will be launching it early next year we plan to launch Lotto with you know wide set of product offering different multiple categories multiple distribution channels and with a very strong marketing you know ethos building you know you mentioned leaving aside the lower end of the market so Lotto has been positioned to the mid to premium segment and this is a very cluttered segment so how are you planning to build the brand salience and also position the brand well honestly I don't think that it is a very cluttered segment there are a few brands serious into India and there is a huge headroom for them the market itself as I said is growing at 4x there is a lot for lot of brands the way we want to position Lotto is that we want to over index ourselves into consumer value for the cost to the consumer or to the or the price to the consumer we will put disproportionate efforts to ensure that the consumer gets maximum value for the price and that is from a standpoint coming from a very strong you know lineage of sport and also then taking that to the street you know today sports is actually transcending the boundaries of the pitch and the court and going to the street and and and that's a space of athleisure that we will really bring about and and we really want to stand for a great brand focused into India a brand with a lot of heritage focused in India with a very strong sports you know investment thesis or on the other hand bringing about products that the people on the street and on on outside the pitch can wear with you know and and that adds to their fashion quotient coming to marketing what are the key marketing pillars that you will be looking is there any platform that you will be aggressively targeting or is it a 360 degree marketing plan that you plan to roll out well by the time we come to the early next year we will have a very clear marketing plan but if I have to comment on to what I broadly believe as as marketing channels will be extremely digital in our approach and that's where the young consumers are it's a mobile first world I have I'm strongly believe that you know building the right right connect with the consumer's mind because products are made in the factory and the brands are made in the heart in the head of the consumer if you have to get in the head of the consumer and the consumer starts engaging with the brand that can only happen if you if you stay relevant and if you then for staying relevant you need to give the consumers the the opportunity to engage with you and and resonate with communities not just you know with not just just with you know certain products but what is relevant to the community that they resonate with so I'm a firm believer that the creator economy will grow young creators will come about and an authenticity of that brand resonating with these creators who today who today build out content which the consumers you know especially the young consumers relate to a strong a strong thesis of that is how authentic are you or how credible are you so we'll don the very authentic credible lens on one side that on the other side we will invest heavily into grassroots sports into India into athletes clubs not just at the top end of the curve but also deeper down because what is going to happen to Indian sport in the next 10 years it will be unprecedented and we not just with the lotto brand but with the rest of the brands here a group company Agilita strongly believes that the there would be a great mindset change and also growth in sports culture in India and we want to just be you know we call it call it catalysts or in some ways we would enable us in some ways investors into this in this change that is donning us from today to the next 10 15 years now you know I know it's too early but I'm just gonna push my luck any how much would you plan to allocate for marketing in terms of your budget sorry I'm sorry finish your question please no it's just how much do you plan to allocate for marketing to make a buzz in the market well personally I'm not new to the consumer business and into the world of consumer marketing and I have never absolutely believed that it is the marketing investment percentages that make or break a brand and I also believe that it's not just what comes into the budgeting and the profit and loss account of what is the line item under marketing that is really a marketing as a consumer company the various elements of your business is marketing when you create products product is a very very important part of the marketing mix pricing is an important part of the marketing mix you're doing retail then absolutely you know focusing on consumer experience and convenience is marketing and so a brand never gets built because they signed one ambassador or they did a one large scale media campaign right you are in the business of marketing on a daily basis right every time you open a store every time the store team interacts with the people who walk in is as much a part of marketing than before I'm not intending to say this to dilute and get away from the question and digress from the question because I firmly believe that we will be a marketing company in our consumer business I mean that's the business if you're in consumer business you are in the business of marketing you are in the business of connecting your brand with your consumer right so every element of our business will be oriented that's the way we will win and that's the way agilitas will win is to the entire approach on our consumer business will be marketing as far as specifically talking about how much we will spend yes you're right we have not earmarked anything specific for this but in the first two three years we will allocate a lot of our capital towards ensuring that the brand the ethos of the brand the positioning of the brand as well as the key products of the brand are visible to the to the consumer and hence we will put you know a lot of capital into doing that in a in an efficient way it we will not spray and paint but we will stand for a few things we will dig that very very deeply rightly said so you mentioned retail and consumer experience and even I'm a big believer that I go to a brand where my consumers where the consumer experience is in which provide an elevated consumer experience so just taking off from that can you talk about your distribution plans offline online and how do you ensure a seamless how do you plan to ensure a seamless elevated consumer experience well let me talk specifically about lotto as a brand next year we will have a full-fledged launch now what I mean by full-fledged launch is that we won't be testing waters in one channel and hoping for that to grow and then invest into other channels I am a firm believer that's when you are a sports brand you need to be available in multiple channels and and and that's what we are getting ready this year with right we are getting ready this year with you know how do we launch our stores right I mean next year we will come up with at least 15 stores in just our first year with a great experience for our consumer so we will have 15 ebos at least we will come up with our own shopping app as well as our web store and and then go deep into building this direct-to-consumer online challenge we will also you know and that comes a stem stems from a bit of the background of all of us is that we would like to leverage the mark the marketplaces the the e-commerce marketplaces and partner up with up with them to deliver the consumer promise that we are creating around the lotto brand also we will be available in departmental stores and regional retail players with shopping shops so you will see lotto next year spreading its wings through various channels with you know deep engagement with the consumer and putting the consumer at the first first place in our focus area you also mentioned you know that you're not just looking at the top end but you're also looking at the grassroots level when it comes to sport so you know taking off from there are you looking I know it's early days but any collaborations or even collaborations with celebrities you know say in the range of an exclusive line or just having them on board anything any plans on that? absolutely absolutely both on the athlete as well as the club side on the sports side and also on the on the you know sports you know transcending the boundaries to be on the street on the lifestyle side on sports influence on culture on art music entertainment also on that side we will do different collaborations around music art culture entertainment and I would definitely collaborate with with the right kind of authentic brand partners and not I'm definitely not of the believer of you know having a brand ambassador who just holds your product and does it like for a commercial you know I'm not a believer of that kind of partnerships with ambassadors but those ambassadors for whom the brand and its objectives for the next five ten years mean a lot right we will get them on board build you know great partnerships with these collaborations whether we will have product collaborations of course we will have product collaborations as well so yeah I mean absolutely and are you planning to raise additional investments to scale up? well if you see in our first six months of setting up the company we raised got a bit of capital we did two rounds of fund raise it is raised about 530 crores of capital we acquired you know an existing manufacturing company which which is doing quite well and and hence you know I see that we are in a position today to have the right kind of capital required but we are also not building a cash dilutive business you're not building a business which guzzles cash every every year because you know we have to spend so much money on customer acquisition or spending a lot of money by hitting the right price in our effort to hit right price points diluting our gross margins sorry so we will not build an unprofitable business yes the businesses will require capital initially in the first three four years of its all the brands will require capital investment for which we have enough capital for the next two years and whenever we feel that there is a need to raise more capital we will raise you know look capital is not going to be in my mind it is a very important part of the play but I think what we are stitching forward if you build a very sustainable great business model great company I don't think capital will be a constraint for us so we're focused extremely focused on building a great organization building a great business model around the company having great brands which mean mean a lot for for its own consumers and hence if we are very focused in building the this and also stay focused to sportswear and and lifestyle then funding is not something that we are always we are not a company which needs capital every six months or one year and finally any projections that about the revenues that you're looking for the end of your one the growth rate you're looking and which segment are you betting on or which vertical well as I said in the business model manufacturing is a separate vertical with a separate focus and that in itself we are enabling with you know right investments on technology and on capacity building on the consumer brand side I think the opportunity where the growth growth rate is just phenomenal and both the sides of the business have huge potential I I don't want to you know say that we we have a specific one year or year to we are looking at it for the long haul but I can definitely tell you that building a company which is which has a net revenue of of a billion dollars in the next few years is a definite possibility from what we are attempting to do I I don't say that it will happen in five years or will it happen in seven years or eight years but we are focused to building a billion dollar company from India in sports and with a very long-term sustainable profitable approach. Thank you so much Abhishek and I was wishing you all the luck in building the billion dollar business. Thank you so much for taking time out. Thank you.