New online fashion start-ups are promoting their own brands
Taslima Khan August 7, 2012Come midnight, for nearly two years now, Somnath Ghosh, a gynaecologist at Serampore, a small town 30 km northeast of Kolkata, switches to what he calls retail therapy.
"If I like a product and it is within my reach, I go for it," says the doctor, a shopaholic on online retail websites. The latest addition to the sites Ghosh shops at is Zovi.com. A shirt he bought recently from the site was less than half the sticker price of a Benetton shirt and of comparable quality. But what he likes most about sites such as Zovi is that they ship to Serampore.
Zovi is one of India's numerous fast-sprouting online fashion stores aiming at a market - both online and brick-and-mortar outlets - that is currently a shade less than Rs 2 trillion, according to an estimate by consulting firm Technopak Advisors. (A trillion equals 100,000 crore). Between its launch in July 2011 and December the same year, Zovi racked up sales of Rs 5 crore and is on course to close calendar year 2012 at Rs 80 crore. Founded by Satish Mani, 44, an aeronautical engineer who formerly worked with Oracle and ticketing site Cleartrip, Zovi competes with sites such as Yepme.com, SherSingh.com and Freecultr.com for custom from the likes of Dr Ghosh.
What sets apart these stores from the apparel sellers which entered the field earlier - such as Myntra.com or Fashionandyou. com - is that they provide only their own brands. The earlier ones all sought to build volumes by selling existing market brands, and offering large discounts. "We launched our own label to differentiate ourselves in a crowded fashion market where over 20 sites sell the same Reebok sunglasses," says Vivek Gaur, Yepme's founder.
Indeed they are promoting their own brands aggressively. When Yepme, for instance, launched its first line of men's wear, it did so with a fashion show in Delhi in which top models such as Dino Morea and Rahul Dev participated. Similarly, Freecultr, started last December by Sujal Shah, a former vice president at IMG Worldwide, tied up with Shah Rukh Khan-owned Kolkata Knight Riders as its official casual wear partner for the last IPL season, supplying a range of sportswear and accessories - T-shirts, denims, shoes, hats and wrist bands.
The primary market for these online fashion brands are Tier II and Tier III towns, where the top fashion labels are not easily available. Yepme, which, starting in August last year will soon provide a Hindi language option on its website. Why? "Because around 70 per cent of our shipments are going to the smaller towns," says Sandeep Sharma, its Chief Operating Officer. Around 49 per cent of Yepme's 200,000 customers so far have come back to it a second time.
While some, like Zovi, sell their branded clothes solely on their own sites, others like Yepme have their products on display at several sites other than their own. They all claim their products are as good as those sold by international brands such as Van Heusen, Benetton or Levi's, but point out that their prices are far lower in comparison. "The beauty of a private label online fashion brand is that it can offer comparable quality at a reasonable price and still make very attractive margins," says Mukul Arora, investment professional at SAIF Partners, which has invested in Zovi. Indeed Zovi makes it a point to sell its branded garments at not more than twice the production cost. It can afford to do so because it does not incur the kind of costs on renting space, employing staff and advertising heavily that the global brands do.
Manufacturing is outsourced to carefullychosen regional garment makers, so as to keep strict tabs on quality. "We look for vendors who can give us that signature finish, but design and the fabric used is provided by our in-house team of fashion designers," says Kavindra Mishra, Co-founder and Vice President, Sales, at Zovi.
Isn't there always the danger, while ordering clothes from an online store, of them not fitting? Apparel portals have sought to address this by offering extremely liberal 'return policies': any problem and the garment is promptly replaced. A bigger challenge is retaining customers. Does having one's own brand confer an advantage? "The future looks more promising for businesses with a very clear differentiator and a customer base which keeps coming back," says Kanwaljit Singh, Senior Managing Director at venture capital firm, Helion Venture Partners.