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FabIndia (“the fabric of India”) is an Indian retail chain platform selling garments, garment

accessories, furnishings, organic food and body care products. It was established by John
Bissel to market the handloom tradition of India through products made using hand-based
processes, selling products using traditional skills which provided a sustained employment to
the artisans in rural areas. The two early collaborators of FabIndia were Habitat (UK based
Retail Company) which contributed 60-65% of FabIndia’s revenue and Bharat Carpet
Manufacturers (BCM) supplied hand-knotted woollen rugs; Desert Artisan Handicrafts
(DAH) were major supplier of printed fabric later. By 1988, FabIndia was well-established
and fairly successful business, mostly concentration on exports.

Around 1995, the home market sales had overtaken exports, which made FabIndia focus on
expanding the retail stores in India. In order to create a distinct identity for craft-based
products in face of increasing competition from machine-made products, All India Artisans
and Craft Workers Welfare Association (AIACA) was set up to improve - domestic market
for crafts and living conditions of craftsmen, which later launched the Craftmark Initiative to
distinguish Indian handicrafts from machine-made products.

Relationship with artisans proved to be the biggest asset, as they established the production
process. FabIndia supported them with resources and encouraged them to invest in
infrastructure. Supply was thus stabilised and minimum quality requirement was ensured
through this. Since there was no mechanised process quality control team played a major role
in making sure that quality is maintained through proper checking of the products before it
went for sale and deliver the value customers are expecting. They have strong and wide
network of artisans and centralised warehouse from where the products are moved to various
store locations.

FabIndia gave store managers the leeway in customising the garment product line as per their
clientele and with stores all over India, it started to organise production for seasons as well as
for festive occasions. It also started to source for the “direct purchase” product and decided to
use fabric other than handloom (at least one aspect of handicraft was added to the power
loom base of the product).

But the changing retail landscape brought additional problems. FabIndia customers now had
a choice to choose from MBOs and local brands, some of which expanded their Indian ethnic
wear selection. Additionally, the burgeoning middle-class had access to more credit, more
products, new lifestyle trends, diminishing geographic constraints and had a habit of
“snacking.” There was a trend towards “fusion-wear,” a mix of Indian and Western element.

Lack of knowledge and communication was cited as a factor limiting visits to FabIndia’s
Women’s Garment section, whereas for Men’s Garments and Furniture & Furnishings, lack
of visibility and low awareness were the limiting factor respectively.

FabIndia believes employees, artisans everyone is a stakeholder thus profit is shared among
all and are encouraged to maintain the standard and quality of their work.

Talking about critical success factors:

1. Relationship with craftsmen and artisans that provided the standard and quality in
the products which matched with the value to be delivered to the customers. The
positioning of FabIndia is done to meet the customer value proposition achieved
through wide network and relationship with artisans
2. Combination of achieving social objectives and profitability through venture by
providing employment to artisans and treating them well by incentivising them
3. Expansion to metro cities with the increase in competition and introducing new
trends to influence the customers
4. Maintaining consistent standard of service to the customers and achieving high
level of personalisation shows how focused FabIndia is in terms of delivering
5. Good customer interaction to know the trends and take feedback and follow up to
continuously improve the quality and remain relevant with their style and fashion
6. The stores of FabIndia was managed by themselves and was not given for
franchise in order to maintain the brand value and prevent it from diluting
7. Successfully eliminated the need of middlemen that reduced the margin
8. Innovation in maintaining supplier relations by introducing Supplier Region
Companies (SRC) which gave local artisan right to own a part in FabIndia and
have a sense of ownership towards the organisation
9. Wide variety of garments available and well-trained employees to handle the
10. Diversification in products and expanding into ranges of furniture and organic