For Fashionandyou, a private shopping site offering luxury brands and focusing on designer apparel, home dÃ©cor and home & kitchenware, the current year will be the year to strengthen its existing 12 categories across four verticals, without foraying into new ones.
The firm raised $40 million in a second round of funding in November last year, where Norwest Venture Partners, Intel Capital, Sequoia Capital India and Nokia Growth Partners took part. The company also raised $8 million from Sequoia Capital India In December 2010. Right now, the e-tailer is cash-positive and has no intention to raise money. But whenever the company has a new business to incubate or wants to grow a specific area that needs cash, it doesn't mind going to the market to raise cash.
In an exclusive conversation with Techcircle.in, Fashionandyou CEO Pearl Uppal has spoken about the challenges of flash retail and the company's method of managing inventory, logistics and supply chain. She also discusses the newly launched e-zine, which adds value to the shopping experience.
Fashionandyou raised a large round of VC funding last year. How are you spending that money?
We are using it to scale up products, supply chain, technology and customer management systems. Other than those, we keep deploying the money to get the right merchandise for us.
You have recently introduced a special section for kids on Fashionandyou. Are you planning to launch more categories?
Well, not right now. Of course, a lot of growth is possible in the core categories we have already adopted. This year, we want to expand the offerings for men, women & kids, and also want to enhance the home dÃ©cor section. Our business features four verticals and 12 product categories. And we will keep feeding these categories by stronger merchandising.
What's the average basket size for Fashionandyou and how many customers are there?
Our average basket value is around Rs 1,500-Rs 1,700 and we ship out close to 200,000 products a month. Till date, we have managed to acquire a little over 3 million members, of whom 20 per cent have transacted with us.
What are the challenges of handling such a vast SKU?
Flash retailing is our DNA but it's not easy. If there are 20 new sales every day and each sale consists of 100 SKUs or so, around 2000 new SKUs go live every day. Consequently, everything has to be brought in physically, shot in our studios and presented before consumers. By the time you have gone through them, we ready to bring in a new set of sales. It may sound easy but a lot effort goes behind it. Moreover, as our inventory changes every day, our logistics and supply chain happen to be a lot more complex than a traditional catalogue retailer.
Even before launching the site in January 2010, you had entered the social media ring (November 2009) to build brand awareness. How has the social media strategy helped Fashionandyou?
At Fashionandyou, we have always believed that content, commerce and social media consumption have converged and altered the way consumers consume the media today. They are extensively using these mediums to decide upon which brands to buy. So one must explore these areas for building credibility and trust.
We also believe that it is a club of like-minded people interested in fashion and lifestyle products. Since we have built upon this community concept, social media has become very relevant for us.
So right from the beginning, we not only on-boarded our members to our website but also gave them a reason to be with us on our social pages. Our social hubs constantly alert people about new sales and the limited merchandise sold at big discounts. In fact, Facebook promotion works better than e-mail marketing as far as consumption of news is concerned.
We also create new themes for our Facebook and Twitter communities. Our Twitter Tuesday is a well-loved property. In brief, social media forms the core of our expertise â€“ it's not an add-on promotional tool.
How many brands do you work with?
We work with more than 700 brands, both Indian and international. Of these, 60 per cent are international brands and the rest 40 per cent are Indian ones.
You also have an e-zine. What's its purpose and how does it help your shoppers?
There are two aspects here. One is to keep our members updated about the trends in fashion and style from across the globe, with the focus on India. Then it also makes the shopping experience at Fashionandyou more curated. Through our e-zine, we keep our customers informed about new sales and key highlights of the month.
Our team of stylists, fashion editors, fashion writers and production guys work closely with the buyers and the merchandisers â€“ so that the entire shopping experience becomes more curated. In any other magazine, you simply look at the products and look for those products offline. But here, the shopping and the magazine come together.
What's the conversion rate at Fashionandyou?
Browsing is a very strong element on our site. Unlike other catalogue e-tailers, we try and ensure that content, entertainment and commerce are gelled together (our e-zine serves this purpose) to enhance the conversion rate. And we have observed that the more a person window-shops (browses the site), the more she would be tempted to buy products. At least 7-8 per cent of our daily visitors end up buying a product from us.
How do you intend to divide the marketing spend between social media and other forms of advertising?
For us, social media is a very organic phenomenon and we keep growing it along with our business. In fact, we have a good aggressive approach towards display advertising. But we haven't been doing is a lot of offline advertising. We do spend a lot on the digital medium but TV advertising and ATL ads are far more expensive. However, once we decide to opt for it, a significant part of the spend will be used for the same. Having said that, digital will always remain core to our business. When we start leveraging the mass media, it will be 60 per cent offline and 40 per cent digital.
Any plan to go for a fundraising soon?
Not right now, but it's something we have planned for the near future. Whenever we think that we have a new business to incubate or a specific area needs cash for growth, we will go to the market. Otherwise, we are well-funded.
What are the milestones you have set for 2012?
We have been the largest e-commerce portal in the fashion space for the past one year and we want to retain that position this year as well. Plus we aim to triple our revenue from that of last year. Fashionandyou is looking to build a business that has a clear line to profitability and wants to develop the best customer experience in the fashion-commerce space.