How Fashionara.com was conceptualised?
Arun Sirdeshmukh (AS): Having worked with Madura Garments and then setting successful start-ups and new businesses with IBM and Indus League, where I worked for seven years, I decided to venture into a new territory, which was different and something that required more of my entrepreneur skills. I have always been fascinated with the idea of starting something from scratch and creating something out of nothing. So I partnered with Darpan Munjal, as he knows the e-commerce space very well. Both of us have knowledge of retailing, products and brand building. He has also built some large e-commerce businesses in the US, such as Sears.com, which he built from scratch to a US$1 billion plus business. He also set up Indiatimes shopping and was previously the CTO with Kaplan, a subsidiary of Washington Post Company. He has a lot of technical expertise of online and social marketing.
As far as the financial aspect is concerned, Helion Venture Partners and Lightspeed Venture Partners, have supported us right from the start, fund us. They have helped us make all the right decisions – right from putting together an idea to getting the right people.
How has Fashionara changed since the time it started?
(AS): In terms of changes, our philosophy remains the same. We like to provide the best quality of online user experience that you can get. The site was designed to provide ease to a customer while he or she shopped. It is fashionable in the way the visuals and products are shown. As far as business is concerned, we were the first to launch a video catalogue. We are also the only site that offers customers an express shipping option with an overnight delivery guarantee in eight metros. When it comes to packaging and delivery of products, we have a customer support team to take care of that. Normally, when one dials a call centre in India, it is never a pleasant experience. So, we wanted to provide our customers with the best experience in this case, where they could find solutions to issues or even get replacements or refunds for products they purchased – all through a simple phone call. We think that in the last few months we have set up the business in a manner in which we get a lot of comments and feedback on our sites.
How long does an e-retailer take to break even?
(AS): We are growing at 40 to 50 per cent every quarter and we have around 50,000 people visiting our site on a daily basis. We have over 40 per cent repeat sales. Fashionara.com has managed the last mile with markets like Bengaluru and Delhi. We also plan to open up in Hyderabad soon. So, there are times during the setup that you do not want to scale up in order to get your act together. What is important to us is the kind of repeat sales that we get. The metrics, the average order value, the way in which we design helps us focus on a very good quality business. It is like setting up a retail market, so you may decide to be a big player in one or two cities, but when you go all over India, you just multiply your turnover. The highest performance comes from the NCR, where we get the bulk of our business. If we have to expand our business, we need a lot more customers, but we need to know whether our shoppers coming to us are really happy and would repeat their visit.
How is Fashionara.com different from other businesses?
(AS): The difference between this business and any other business is not about the costs involved; it is actually the bucketing of costs. In a retail store, you will have rentals and in an online store, you have logistic costs. In a retail store, you have certain people costs in the front end; here, we have returns and packaging costs. So, it is a different sync of costs that we incur versus an offline retailer. The important thing here is that you are making money on the transaction that you incur. There is more in terms of margin compared to the cost taken to deliver and handle the queries. To that extent, we have always been focused on running a very profitable venture. During the first month, I may sell only 10 units, which is not enough to pay for anybody. So, it is just a matter of time to make the volume grow. Even offline retailers may not break even after setting up the first two stores, but they may record a growth after their 10th or 11th store, where they will be able to generate enough money per store to pay the people at the back end. Clearly, we cannot expect our fortunes to turn around in just a year’s time; we need at least a couple of years to break even.
Other online stores offer similar brands at similar prices. How is Fashionara different?
(AS): It is not about what you offer, but about how you offer something that makes the difference. Our apparel range is a lot stronger and has a lot of built-up, as we have some brands that are exclusive to us. Also, if you are located in a city like Bengaluru, your order will reach you in a day while others may take two to three days. We also make returns very easy with a simple text message that we receive from a customer’s mobile. It is very convenient to shop on our site due to the ease of delivery.
Also, the kind of visuals and fashion content we have draws in a lot of customers, which is pretty similar to an offline mall space, where we have noticed that customers prefer shopping at trendier places. At Fashionara.com, we do not believe in carrying all the brands and products that we can find. What we have is a ‘curated’ selection. This means, when a customer looks at our site, they will notice that there is a certain look and feel or quality. So, we tend to attract a more affluent customer base, which largely consists of women, compared to other businesses. Currently, Fashionara.com has tie-ups with around 200 brands.
We run everything out of our distribution centre here in Bengaluru. It is all well controlled and well catalogued. We ship to all pin codes in India and the entire logistics is operated from one distribution centre.
Do women shop as much as men do?
(AS): If you generally look at the people who have internet connectivity in India, there are more men than women in the shopping space for various reasons. Our site, on the other hand, tends to get a fair number of women shoppers. Within a year, we are half in half with men and women in terms of speed shoppers on our site. If you look at the overall e-commerce business in India, there would be around 10 million people who do transactions across various online verticals, which includes shopping for train or movie tickets.
Women often tend to opt for CoDs (Cash on Delivery) as they are uncertain of the right fi t. How have you tackled this issue?
(AS): That is generally a problem with online shopping. When you look at our site and browse through some of our product range, almost one-third of the products have a new size guide that we have incorporated. What we do is that we measure all the garments. If it is a top, then there is usually an S, M, L and XL, out of which we further measure each of those garments that are warehoused and then give customers the exact measurement of all those sizes. So, the sizes at the bust, the waist, the bottom and even the neck drops are carefully measured. As a result, Fashionara gives customers two to three times the measurements that one normally gets elsewhere. In addition, we also make visuals where a customer can actually select L and M and see the difference between the two sizes. We also ask the customers to measure themselves, so they are sure about which of the sizes would fi t them.
Secondly, we offer the customer ‘try at home’ service in Bengaluru and Delhi, which is being managed by our team through the last mile. Here, our customer service person wait’s at the customer’s doorstep until the customer has finished trying the product. In case the customer needs a different size, they can immediately order for an alternate size from the customer support. The alternate size is then shipped out simultaneously while the customer service person collects the old one. This is almost like going to an offl ine retail store and trying the apparel in a trial room.
Are there issues with different brands having different sizes?
(AS): That is true. Here an interactive size guide will work, giving the exact measurement of that garment. There is not much we can do with the sizing being different across brands. So once you place your order, we will handle everything right at your doorstep through our customer service executive. We are extremely flexible in our approach; if it is a CoD, where you have ordered for three products and if you like only two of them, we take money for only the two. In case of a prepaid order, you can return all the three and get a refund by cheque or even expect a refund on your credit card.
What are the other challenges in running an e-store?
(AS): When I was working with Reliance and we were setting up stores at smaller towns, people suspected if we would have enough customers in the towns or have enough money to make deliveries. I believe one has to look at what is right for the business capabilities and the costs that are required. It is just in the last two years that fashion products are available online. Our job is to make it a very easy and comfortable experience online. It is not a luxury but a necessity. So, it is important to get the cost involved and keep tabs on the way products are being handed.
What are the different categories and contribution of sales coming from womenswear?
(AS): We get around 40 per cent of our sales from womenswear. When we started Fashionara.com, we only had westernwear that belonged to well-known brands of denim, T-shirts and tops. We later added activewear to the site and ever since (December 2012), we have been adding products in the ethnicwear segment. Currently, the website has a wide selection in ethnicwear from all the key brands, such as Biba, W, and Fabindia. We also have an exclusive tie-up with Bengaluru-based brand Souch. After the addition of saris and dress materials in the last three months, we have also added lingerie. On the footwear side, we have added many key brands like Inc 5, Catwalk and Clarks.
Fashionara.com continues to generate business from two key areas. One is typically the kind of product that is not dressy or fashionable tops. The other major part of the business comes from the ethnicwear category, not just kurtis but also salwar kameez, dupatta sets and even our sari section, which is gaining much traction. So, these are our core areas.
What are your expansion plans?
(AS): We need to stabilise and see the best parts of our business, the best customer types, and the best-selling products. Fashionara.com will soon increase their brands in the footwear and accessories side. We plan to add sunglasses and perfumes in our catalogue.
Tell us about the store you have on Facebook.
(AS): Since we get a lot of traffic on Facebook, it has become an important channel for us. Even before Fashionara. com was launched, we already had 100,000 likes on our FB page. Now, we have 400,000 likes, which is large for a young business like ours.
The store on our FB page helps shoppers to remain on the same page and browse through the catalogues, like how they would on the main web page, and then go on to place an order or transaction. Any new features on the website are also adapted on the FB page. We also have a presence on Pinterest.
What are the marketing strategies for Fashionara.com?
(AS): Since our repeats are 40 to 50 per cent, the balance is all new customers. So, half of our business comes from all the marketing that we do. Fashionara does not do any offline media like television advertorials or hoardings but is visible through all key online channels. We keep advertising on FB, Google and Yahoo!. One form of advertising is the display ad and the other is search marketing. So, what we do is Search Engine Optimisation (SEO) and Search Engine Marketing (SEM).