THREE-YEAR-OLD START-UPS: RANK 1
What's in a look? A lot, actually. Especially if you are a woman. There's the dress. And then there are the accessories. Wait! We forgot the shoes... and quite a few other things really. Besides, no woman would be caught dead in last year's fashion. Finding the right products to construct a 'look' is a challenge for women - one met by painstakingly trawling through shops in marketplaces and malls. Then there are fashion websites such as Jabong and Myntra. And then there is LimeRoad.
LimeRoad works on a simple premise. It allows you to create your own look - on a virtual scrapbook - using products from 1,500 small vendors on its site. And share it with others. If you're not the creative type, you could 'buy' a look created by someone else. You could also discover styles by subscribing to LimeRoad's feed or follow people whose concoctions you like.
This model works well for everyone - the creator of the look gets a kick out of showing off her creativity, besides getting reward points; the buyer is happy as she gets a full fashion package; the vendors rake in the moolah because when one 'look' is sold, more than one product is sold; and LimeRoad cheers on because more products sold equates to more commission!Despite its unique business model, LimeRoad, which is registered as AM Marketplaces, looks puny when compared with market-leading fashion websites Myntra (now part of Flipkart) and Jabong. Data from the Registrar of Companies show LimeRoad clocked Rs 2.6 crore revenue in 2013/14, up from Rs 1.1 crore the previous year. In comparison, Myntra was at Rs 552 crore and Jabong at Rs 527 crore in 2013/14.
But Suchi Mukherjee, founder and CEO of LimeRoad, is upbeat. "Women fashion customers come back to the LimeRoad mobile app 85 times a year on average, which is the highest in the industry," says Mukherjee, 41, a former managing director at one of UK's largest online classifieds sites Gumtree, who has also had stints at eBay and Skype.
All fashion vendors realise that a fashion purchase is more an experience than a mere transaction and, therefore, content is crucial. So, while Jabong plays up imagery - letting users see models walk the ramp with every dress they click on - Myntra has a content team to create look-books, celebrity interviews, style tips and trend alerts. LimeRoad leverages its users to create looks through its scrapbooks. "The way women consume fashion is different," says Anshoo Sharma, Principal at Lightspeed Venture Partners, an early investor in LimeRoad that invests in India out of a $1-billion fund. "They love to browse, mix and match even without buying, and want to come back to do so again and again."
The community of scrap-bookers on LimeRoad is growing fast. From creating around 20,000 looks a month a year ago to two million a month now, users have taken the total number of looks on the platform to 20 million, says Mukherjee. Today, there are 40,000 active shoppers on LimeRoad.
Starting out from its investor Lightspeed's Delhi office, LimeRoad had a humble beginning in 2011 with three co-founders: Mukherjee; Ankush Mehra, who handled supply chain at Reliance Industries and Metro Cash & Carry; and Prashant Malik, who earlier worked with Facebook. The company formally launched in December 2012. It has raised $50 million from marquee investors like Tiger Global, Lightspeed and Matrix Partners.
LimeRoad, which operates on a marketplace model, keeps its cash burn low. Logistics is outsourced to partners like Aramex, FedEx and BlueDart. Over 100,000 stock-keeping units from 1,500 vendors are managed by four people. There is no sales force and the total team strength is 200, and most operations are technology-driven. The company sees 85 per cent of its gross merchandise value (or GMV, the total value of products sold) coming from organic traffic, and the remaining from paid marketing efforts. It declines to give actual numbers.
Tiger Global has also taken bets on Roposo. The fashion discovery site allows women to post selfies or bloggers to write content on their platform. One can post a query and get recommendations from other sites such as Jabong. "We want to take search and discovery for women's fashion to the next level," says Mayank Bhangadia, co-founder of Roposo, who claims to have achieved a million page views a day on Roposo.
A Google report pegs the Indian online fashion market at $35 billion in the next five years, roughly 35 per cent of the e-commerce market. Currently, most companies offer discounts to achieve GMV figures. But gradually prices will stabilise. That is when customer engagement will begin to matter. "We are still at day one in lifestyle, unlike other segments like electronics where there are just five big manufacturers to choose from," says Mukherjee. "The biggest e-commerce platforms have less than one per cent of millions of SME vendors online."
There is time - and space - yet for LimeRoad to flourish.