At a day and time, when the real fight for fashion e-commerce players is to stand out with brands they have on their portal and deliver orders in the shortest time possible, a Mumbai-based e-commerce startup claims to fulfill same day delivery and even 4-hours delivery in many cases.
Fynd, that allows offline stores to list their in-store inventories on its platform, sources products from the nearest stores and ensures timely delivery of products. The company has started fetching live inventory from 8,000 plus brand stores in just two years of existence. The company, which clocked one lakh downloads in just 1 month initially, has more than 2.8 mn app downloads across different operating systems (OS) today- thanks to their targeted marketing initiatives.
With a dose of fresh funding from some e-commerce biggies in its war-chest, the startup is now all set to test waters in other markets and strengthen its tech team. Here’s an excerpt from our conversation with Harsh Shah, Co-Founder, Fynd, on their evolution from a B2B platform to B2C, surviving in an ecosystem cluttered with big players and how they used digital marketing to their advantage.
What inspired you to start Fynd? How has the journey been so far?
The company initially started off as Shopsense Retail Technology Pvt. Ltd. in 2012. Back then, we were in the B2B domain catering to brand stores, helping them enhance customer experience and making discovery of in-store products easy. Though this was helping the stores get some extra sales, it was a difficult model to scale up quickly, as we had to design solutions for each brand/company separately. At the same time, we noticed, e-commerce was big, but it was losing money on warehouse management and we could make the process more efficient. Since we had data on the brand stores, it made much more sense for us to utilize this data and help brand stores gain extra sales via e-comm. Therefore, we pivoted Fynd in November, 2015. As Fynd, we have established ourselves as a fashion e-commerce portal, which helps bring the latest in-store fashion online.
With its unique delivery model of sourcing directly from the nearby brand stores, we are able to do same day delivery and even 4-hours delivery in many cases. Then we came up with features like ‘Fynd-A-Fit’ that allow users to opt for two sizes of the same product, try at the convenience of their home and return the one that doesn’t fit well. These features peg us as one of the best shopping solutions, addressing key concerns of users of the long waiting time for delivery and their anxiety about getting the right fit. We started off with onboarding around 20 brands with whom we had an association earlier (as Shopsense). This basically helped us do an MVP check and then we scaled ourselves up and started onboarding more and more brands.
Fashion e-commerce in India is dominated by few big players. How difficult is it for a small brand to survive and grow in such a scenario?
Yes, fashion ecosystem has seen a lot of players coming in online as well as offline, but none of the frameworks target towards bridging the gap between online and offline ecosystems. Without taking any names, there are a couple of online brands, which tried to get their hands on establishing an omnichannel network but gave up on it, and soon started concentrating on the sales of only their private labels as this helps them fetch more profits. Having said that, we started off with a single motive to help brands optimize their current resources and still stand by it. We help brands get their in-store inventory online on our portal and gain extra sales via it. We are currently the only player in the e-commerce industry, which is fetching live inventory via 8,000+ stores across the country and this makes us the largest omnichannel e-commerce company in India.
At the end of the day, it is all about unit economics. While everyone in the industry is running after extrapolated growth numbers, we have cracked the unit economics of the e-commerce business and are currently making profits on each unit sold. I truly believe that this is the only way a small brand can survive.
How did you get your first 1000 customers?
When it comes to downloads, targeted marketing did the trick. By the end of December 2015, we had a mere 10,000 app downloads. In January 2016, we started on-ground activations, social media marketing followed by an ad push from mobile ad networks like InMobi and STG Media. The activations were apparel based, with graphic tees marketing done in colleges, and we as a company saw our team swelling and moving to bigger offices in Lower Parel. We also touched over one lakh downloads at the beginning of 2016, coming only from one city – Mumbai, in less than two months of its launch. It’s one of the fastest growth for any app in this category.
Today, we have more than 2.8 mn downloads across different OS and this excludes the daily traffic we see on our website.
Hyperlocal e-commerce model for many categories (read: Grocery) have not proved to be very successful. How well does it work in the fashion space?
Hyperlocal is the next frontier for e-commerce companies to bring massive scale and deliver goods instantly. Fynd is one of many ‘hyperlocal’ delivery startups dotting the Asian landscape that’s ushering in a new luxury market, based on the principle that one never needs to leave home. Our key advantage over any other e-commerce player is that we hold no inventory of our own. It means we have no fixed costs and scaling up becomes a lot easier for us. Apart from that, since we source all our inventory straight via brand stores, one can see only the latest products, which are available in the brand stores; no old season stocks at all. This is something, which none of our competitors can offer. Both these key advantages help us in easy scaling and still maintaining unit economics of the game.
Building a hyperlocal model in fashion space is much more economical as compared to the grocery. The reason for same is the ticket size; average ticket size in the fashion business is around Rs. 800-1200, in profits, therefore, we are net positive after removing the logistics cost. So, in fashion space, one needs to patiently establish logistics network and then can start making a net profit at the unit level. Once done, level up your marketing and promotions to increase customer base to increase profits.
What social media strategies helped you get more customers and stay ahead of the competition?
Social media is a better tool to reach out to our TG with relevant content. In fashion space, relevant content is of two types: (i) Fashion tips and curated collections (ii) Relevant offers and discounts.
We did both for our respective audiences, and to be very frank, it did wonders for us. Our cost per acquisition via social media channels was 50-60 percent less than our competitors and conversion numbers were also encouraging. This is the reason almost 60 percent of our expenses in our first phase of growth went on social media.
How would you define your target audience?
Our target consumers are young executives from 24-35 years of age who have just entered the corporate world. They want to look elegant and presentable always, and are always up-to-date about the latest looks.
How did you leverage the power of new-age content marketing to build brand awareness?
New-age content marketing is all about serving relevant content to your audience. Our fashion blog ‘The Closet’ was right into doing the same. We had interviewed some of the famous fashion experts like Neeta Lulla, Riddhi-Siddhi, etc. and shared their expert views on our portal. This worked quite well for us and helped us get the early stage traction required. However, the amount of effort, which is required to come up with a piece of content is a lot and the turn-around time is also high. We therefore, had to pick up other more dynamic and fast ways to build brand awareness. But yes, content marketing did its job for us before bidding us adieu. Right now, our content marketing efforts are on a hold. We will re-introduce it in the next quarter basis the situation.
Should new startups leverage the power of social media to build brand awareness this year?
Yes, definitely. The key advantage of social media is that there is a low upfront cost involved and if your content is good the impact increases further. Building a brand via one-to-one medium is always better for a brand in its early stage as compared to do a spray and pray marketing via other mediums. It is cost-efficient for small cost brand awareness activities.
You have recently raised pre-series A funding. How are you planning to use these funds?
We raised funding from former Snapdeal’s Chief Product Officer, Anand Chandrasekaran, CEO of Arvind Sports Lifestyle, Rajiv Mehta and Livspace Co-founder, Ramakant Sharma in the month of April, 2016. This funding will be majorly used for market expansion and strengthen our tech team.