Greeting cards and gifts major, Archies plans to sell its products through the Internet as part of its strategy to expand globally. This has been reported by a national daily.
Archies (FY99 revenues: Rs 603 m) commands 45% of the Rs 3 bn Indian greeting cards market. The company also has a major presence in the soft toys, gifts and stationery segment. Apart from selling cards under its own label, it sells Gibsons, Paper Magic and Paper Rose cards through a licencing arrangement with these global majors. The company has also diversified into marketing music CD's, cassettes and perfumes. In FY99, it derived almost 71% of its revenues from selling greeting cards.
Initially, the company plans to sell Archies brand of e-cards on the Internet. Later, it will introduce the entire range of products that can be ordered on the net. The company is already strengthening its retail distribution network. It has a network of around 400 franchisees in India and 14 franchisees abroad giving it a presence in Bangladesh, Nepal, Sri Lanka, Bhutan, Muscat and Abu Dhabi. The company's FY99 forex inflow stood at Rs 17 m.
The company is focusing on increasing its global contributions. The strategy of selling on the net will give Archies a platform to expand its reach overseas and increase brand awareness in the overseas market. But for making this foray worthwhile, the company will have to make significant investments in strengthening its distribution network worldwide. The company will not find it easy to charge customers for e-cards, as currently Internet greeting cards are largely available free of cost on various web sites.
The stock is on the 'BUY' list of most analysts because of its dominant position in the Indian greeting cards market. The company's strong distribution network has supported the rating.
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