TTK Prestige is ramping up its exclusive retail outlet – Prestige Smart Kitchen [PSK] – across the country with an aim to strengthen its brand. It has opened 370 retail outlets in 180-200 cities across 21 states. The company plans to add another 110 stores in FY13.
We believe that increase in PSK bodes well for overall growth and brand building as it provides an important marketing and distribution platform for new products such as water filter and World Kitchen cookware products. In addition, the company has also ramped up its dealer distribution network from 25,000 a year ago to 30,000 currently and simultaneously plans to bolster its distribution network in non-South India markets through increased dealer touch points.
TTK operates in a highly competitive and fragmented kitchenware industry. Given the low entry barriers, large players such as Bajaj Electricals and Hawkins, and small unorganised players with a variety of products have entered the market. For example, Havells has entered the kitchen electrical appliances market and a number of unorganised players have flooded the market with their products at lower price points in various categories. The entry of new players, specially the large ones, presents a risk to TTK’s growth