Luxury chocolate retailer Cococart India to add 200 stores in next 5 years
3 min read 06 Jun 2023, 11:11 PM ISTFor now, a majority of its stores, 33 of them, are in airport locations, which have the highest cost.
PremiumNew Delhi: A chocolate retail business that was born out of a necessity in the pandemic during various lockdowns by the family that runs the Flemingo Duty Free business, is now looking to rapidly expand its business in the country. Cococart Ventures Private Ltd-owned Cococart India, an independent business of the Ahuja family run by brothers Arjun and Karan is a gourmet chocolate retail company. It currently has 57 stores of which 18 are cafés, and the remaining retail stores are in malls and at airports. It will add anywhere between 200 and 250 stores in the next four to five years in the country.
It intends to franchise about 25% of the upcoming stores. The company’s co-founder Arjun told Mint that the business grew from a gross revenue of ₹52 crore in 2021 to ₹100 crore in 2022. It had a turnover of ₹175 crore in FY23 on the back of the rapid store and cafe expansion. Mint could not independently verify this information. Its projected turnover is expected to be about ₹500 crore in the next four years, he said.
“During the nascent stage of our growth, managing expiry of our perishable chocolates was a challenge because of lockdowns, especially considering the fact that many factories across the globe weren’t operational and inventory didn’t move as quickly on our e-commerce platform. Since then, we’ve grown exponentially and our logistics for our retail and online platforms are well operationalised. In case products are close to expiry, they’re given for free or at an offer post informing customers of the same," said Arjun Ahuja. The brothers are no longer directors of the duty-free business now.
For now, a majority of its stores, 33 of them, are in airport locations, which have the highest cost. Stores can cost anywhere between ₹20 lakh to ₹1 crore but typically fall in the ₹50-60 lakh range, he said. The remaining are in high street and mall locations in tier-1 cities. Apart from adding stores, it will focus on high footfall areas like industrial complexes, offices and key buildings in the metros using a kiosk model. The next phase of growth for the company will come from Delhi, Bangalore and Hyderabad because these cities have a high discretionary income and very few specialised chocolate retail stores.
According to industry research, the Indian chocolate market is projected to register a CAGR of 8.15% over the upcoming five years. But estimating demand for the category remains an ongoing challenge. Many online chocolate businesses which commenced operations during the pandemic had the support of importers to liquidate the existing stock which was soon going to expire. But some of those issues are being ironed out now.
One consultant feels the chocolate category is a clear beneficiary of the growth in organised retail. “We have seen a lot of interest from global chocolate brands wanting to establish shop in India to cater to local consumers," said Chennai-based L Nitin Chordia, an independent chocolate consultant, and bean to bar chocolate maker.
Chordia added that the premium chocolate market has evolved and expanded, as expected, into tier-2 and 3 cities as well. But the problem is that many imported brands, which otherwise sell as mass-produced brands in their own countries, are selling as premium products here.
“In the past, the size of the premium chocolate market was defined simply (of course wrongly) by the price is was being sold at. A more accurate way would be to refer to them as speciality chocolate. The market size of that in India is about ₹55 crore as of March 2023. This includes bean to bar chocolates and other imported chocolates which are not mass manufactured. The general premium chocolate market share could be pegged at 20-25% of the total market," he said.