Mr. Harsh Bahadur
(Chairman)
Overview
OUR UNIQUE BUSINESS MODEL SETS US APART IN THE INDUSTRY. WE ARE PRESENT IN 130 MILLION TV HOUSEHOLDS ACROSS THE US, UK, AND GERMANY. OUR CUSTOMERS SHOW REMARKABLE LOYALTY, WITH AN AVERAGE REPEAT PURCHASE RATE OF 24 PIECES PER ANNUM AND A RETENTION RATE OF 39%.
Dear Shareholders,
FY 2023-24: A YEAR OF RESURGENCE
The past year marked a significant turnaround for our company, as we regained growth momentum after a short period of challenges. Our key markets in the US, UK, and Germany are showing signs of economic stability, allowing us to capitalise on new opportunities and sustain our market-leading growth.
BROADENING OUR CUSTOMER BASE
Our efforts to broaden our customer base were significantly strengthened by two strategic acquisitions we did during FY24. The acquisition of Ideal World, a well-established teleshopping brand in the UK, has enhanced our market share and opened new growth avenues. Additionally, Mindful Souls, an e-commerce company with sales presence in the US, UK, Canada, EU, and Australia, has positively contributed to our growth. We expect the digital expertise of Mindful Souls to strengthen our existing digital businesses.
We have also strengthened our digital infrastructure by enhancing our Salesforce Commerce Cloud, Marketing Cloud, and Service Cloud to improve the shopping experience and ensure security and reliability. We optimised our digital marketing campaigns and employed various tools such as SEO, SEM, Social Media Marketing, E-mail Marketing, and Affiliate Marketing. These data-driven campaigns have helped us engage more effectively with customers and driving conversions.
We are also leveraging AI to enhance customer acquisition and retention. AI-driven TV planning enables scheduling of high-performing products. AI-based demand forecasting and inventory planning match real time demand with supply, optimizing inventory level and increasing revenue predictability. Additionally, AI-generated content for ad creatives, product pages, and our website helps accelerate revenue. These initiatives are expected to capitalize on future opportunities while improving customer retention and repeat purchases.
Our unique business model
Our unique business model sets us apart in the industry. We are present in 130 million TV households across the US, UK, and Germany. Our customers show remarkable loyalty, with an average repeat purchase rate of 24 pieces per annum and a retention rate of 39%. Our vertically integrated model includes manufacturing facilities for fashion jewellery, supported by a global sourcing base across 30 countries for lifestyle products and gemstones. This integration allows us to maintain
high-quality standards and cost efficiency. Our omni-channel presence, spanning TV and digital platforms, ensures we reach a wide and diverse customer base.
BEING A RESPONSIBLE CORPORATE CITIZEN - THE ESG WAY
Our commitment to environmental, social, and governance (ESG) principles is integral to our operations. We operate two solar power plants in India, generating 4.1 million kWh of solar energy annually. Our afforestation efforts have resulted in the creation of two Miyawaki forests over two acres, comprising approximately 28,000 trees.
In water conservation, we harvest 6,100 KL of rainwater annually and recycle 4.8 KL of water daily. We convert 100% of our biodegradable waste into compost and recycle plastic and electronic waste through government-approved recyclers. Our fleet of electric vehicles now includes 184 two-wheelers and three electric cars, reducing carbon emissions and eliminating 12 buses from our fleet. Our SEZ unit has been certified as a ‘Net Zero Energy Building’ (NZEB) by the Indian Green Building Council (IGBC), a significant milestone placing us among only 16 projects in India to achieve this status.
VGL Group subsidiaries continue to be recognised as 'Great Place to Work®', underscoring our dedication to fostering a positive work environment, maintaining robust governance, and prioritising employee well-being and satisfaction.
WAY FORWARD
Looking ahead, our value-offering unique business model presents an opportunity to capture future growth. We will continue to enhance customer engagement through our omni-channel presence and extensive product portfolio of more than 25,000 SKUs. Our strong cash flows, dividend payouts, and commitment to the highest levels of corporate governance will ensure sustained shareholder returns. The future holds compelling opportunities for revenue growth and operating leverage, and we are well-positioned to capitalise on these prospects.
Thank you for your continued support.
Warm Regards,
Harsh Bahadur
Chairman
Mr. Sunil Agrawal
(Managing Director)
VGL AT GLANCE
We will continue investing in technology and deepen our omnichannel presence on various platforms that we offer our products on. We are well-positioned to capture future growth, gain market share, and maintain operating leverage. We are committed to balancing growth, investment, and regular dividend payouts to create sustainable value for our stakeholders.
Dear Shareholders,
REGAINING THE GROWTH TRAJECTORY
We are pleased to report that our company regained its growth trajectory, showing improved profitability and strong cash flows. Our revenue grew by 13% year-overyear, with a healthy 5-year CAGR of 11%. We continue to gain market share, demonstrating the strength of our business model, a diverse portfolio of 25,000 products and deep customer engagement.
Significant investments in digital platforms have expanded our sales channels, including Over the Air (OTA) TV platforms, websites, mobile apps, OTT, and third-party marketplaces.
REGION-WISE PERFORMANCE
United States: Our performance improved as inflationary pressures eased, boosting consumer confidence and spending. Our agile supply chain ensured seamless product availability, meeting evolving customer demands. We also adapted our airtime strategies to align with consumer behaviours and optimised our broadcasting schedules accordingly.
United Kingdom: Consumers remains cautious due to the ongoing cost of living crisis. Our acquisition of Ideal World has strengthened our market share and provided new growth opportunities. We are pleased that within six months of the acquisition, Ideal World became profitable on a direct cost basis.
Germany: We have sustained sales growth momentum and market share gains since entering the market three years ago. Currently, Germany generates monthly revenue of over €1.8 million with gross margins exceeding 60%. Our strategic investments in TV networks and digital platforms have driven significant market penetration and increased revenue streams. Within three years, we have reached 95% of households in Germany. We are confident of achieving breakeven at the operating (EBITDA) level by the second half of FY25.
STRATEGIC ACQUISITIONS
During the year, we completed two strategic acquisitions funded entirely through internally generated funds.
1. Ideal World: Shop TJC Ltd (UK) acquired the IP rights, broadcasting rights, customer list and studio equipment of Ideal World for GBP 1.125 million. Ideal World, a major teleshopping brand in the UK with over 20 years of legacy, operates proprietary TV shopping channels for lifestyle products.
The integration with our UK operations was completed within a month, and Ideal World commenced live broadcasting on 29 September 2023. It currently reaches approximately 27 million households in the UK. By leveraging shared resources such as warehouses, studios, and workforce, we anticipate achieving profitability on a full-cost allocation basis in the coming quarters.
2. Mindful Souls: Established in 2018 in the Netherlands, Mindful Souls primarily serves the United States, one of the largest e-commerce markets, through its proprietary website and marketplaces. While over 80% of its revenue is derived from the US, it also has a presence in the UK/EU, Canada, and Australia, selling subscription boxes of fashion jewellery, selfcare and selflove products. We have
begun utilising VGL’s well-established supply chain to further improve the profitability of this business. Additionally, the digital capabilities of Mindful Souls are benefiting our existing digital businesses through cross-learnings across the Group.
SUPPLY CHAIN
Our company has developed a robust and dynamic supply chain system. Unlike our competitors, we possess both our own manufacturing facilities and a global sourcing network. This approach ensures agility, scalability, and adaptability to market demands, allowing us to achieve industry-leading gross margins while mitigating supply chain constraints.
UNREASONABLE HOSPITALITY
We remain committed to strengthening our performance based on the 4R’s – Widening Reach, New Registrations & Acquisitions, Customer Retention, and Repeat Purchases. Our TV networks reached approximately 130 million homes, with 0.3 million new customer acquisitions on TTM basis. Our customer retention rate was 86% for those making 20 or more purchases annually, and customers bought an average of 24 pieces per year.
Our continued investments in OTAs and digital ecosystems, including websites, applications, OTTs and marketplaces, are helping us expand our reach and improve customer experience. We aim to increase digital revenue to 50% by FY27 with CAGR of ~24%. Our in-house brands and innovation efforts aim to boost brand performance and increase branded merchandise revenue to 50% of total B2C revenue by FY28.
FUTURE GROWTH LEVERS
We are integrating the principles of ‘Unreasonable Hospitality’ into our operations, inspired by Will Guidara's acclaimed book. This concept focusses on exceeding customer expectations to provide memorable shopping experiences. By prioritising exceptional service, we aim to enhance long-term customer loyalty, as reflected in our increased ‘Net Promoter Score’ across territories.
Looking ahead
We will continue investing in technology and deepen our omnichannel presence on various platforms that we offer our products on. We are well-positioned to capture future growth, gain market share, and maintain operating leverage. We are committed to balancing growth, investment, and regular dividend payouts to create sustainable value for our stakeholders.
Warm Regards,
Sunil Agrawal
Managing Director
