Exclusively.in, a fashion and lifestyle portal focused on the NRIs, has been hitting headlines with speculations that the site may soon be up for sale. But in a one-to-one conversation with Techcircle.in, Sunjay Guleria, founder and CEO of Exclusively.in, and the co-founder of a separate private label site Sher Singh, clears the air by saying such assumptions are unfounded. He has also discussed how Sher Singh is shaping up, the challenges faced by private label brands in India and the company's growth plans.
Founded in June 2010, Exclusively.in offers a variety of products including apparels, jewellery, handbags and accessories. Last year, it raised a second-round funding of $16 million, led by New York-based Tiger Global Management LLC. Existing investors Accel Partners and Helion Venture Partners also took part in that round. The firm had also raised $2.8 million from Accel and Helion in November 2010.
Here are the excerpts from the interview.
Rumours are rife that Exclusively.in is up for sale. What do you have to say about that?
Exclusively.in is not up for sale. Instead, we have chosen to focus on some necessary restructuring to ensure that our business units become profitable. As a result, the site has become a profitable entity now. That restructuring was really important for us as we were aiming to scale up. During that period, we decided how best to invest most of the capital raised in a series B funding. We invested a lot in our private label brand Sher Singh to help it grow. But investing most of the fund was a board level decision and the company had never lost any money. The rest of the capital can be used over a period of two-and-a-half years.
It is also said that your investors are exiting. Is that true?
None of our investors is exiting. We all are a happy family. Such unfortunate rumours do the rounds as the market is very small. And I just have one thing to say: Let our results talk.
For some time, it has been noticed that you are doing away with a few product categories on the portal. But most of these are back now. What's the rationale behind it?
In e-commerce, you get to experiment a lot but some things work and some don't. Then you try and analyse the data for future course. Some of those merchandising decisions were based on the data we had received. It's true that we do flash sales because people do like to come on board for a short period of time and enjoy the excitement of flash sales. Hence, some of the older sections are back.
How is the private label portal Sher Singh faring?
It's growing quite rapidly. About a month ago, 30 per cent of the revenue came from there but now, it has gone up to 50 per cent. By end of this year, the site may actually churn out 80-90 per cent of our revenues.
In the long run, do you want to dissolve Exclusively.in and focus only on Sher Singh?
No, both our businesses will be running side by side. We have put in money in both the ventures and each made losses at times. But we have managed to preserve some cash and invested it in Sher Singh. Also, Exclusively. In is getting a nice amount of cash for us at the end of each month. Whatever growth we have seen in the past 90 days is quite promising and we are really excited about what's going to come.
We know that Exclusively.in, which only services the NRI market, will be profitable. And the way Sher Singh is growing also proves the acceptance of ethnic wear in the NRI market â€“ that, too, by a private label brand, built out of India.
What extra care needs to be taken while dealing with private labels?
We have to be the best in what we do. One needs to make sure that our products are on par with the best international brands. We are not necessarily competing with Zovi, Freecultr or Yepme. But we do compete with all established international retail brands like Tommy Hilfiger or Bizzare.
Can private labels alone drive the business?
Private label is still at a nascent stage in India where organised retail is relatively new, and here lies the tremendous opportunity to grow. Another 3-5 years would see the emergence of huge businesses, built on private label brands.
What's your target market?
Exclusively.in only targets the global market and not the domestic market. However, Sher Singh currently sells its products in India. But even Sher Singh will have to go global in the long run.
Do you think this brand (Exclusively.in) will work for you?
I have great faith in it and have managed quite well building it as an amazing brand. This brand has been curated for the last 18 months. It's something that the NRIs trust. They love our service, products and the quality we deliver, and we will continue to do so.
So what are the new offerings?
Sher Singh would continue to feature new categories. Just a few days ago, we have launched women's and kid's collections there. Buyers may also expect some home collections coming in soon. As the brand builds trust, we will keep adding new categories.
What is the future of private label in India, where offline retail hasn't really taken off?
It's an entrepreneur's job to build something new. Since the retail infrastructure in India is so poor, it gives the retail infra companies an immense scope to explore several avenues. It will be interesting to see how some homegrown e-commerce sites grow in the months to come.
Finally, what's your monthly transaction size? And what are the targets you would like to achieve?
The last 90 days witnessed a real spike in terms of growth. We have understood that the more SKUs you add, the higher is the transaction rate. The conversion rate has literally doubled and the transaction has doubled as well. As we add more categories, we expect see a considerable rise in growth.
Our transaction size is 1.27 per box on an average, and the average value is Rs 1,300. Right now, it is a $30 million business, with 3.5 million Facebook fans and 1 lakh registered customers. If we continue to grow this way, we would acquire half a million registered users by the end of this year.