Utsav fashion, Indian ethnic wear retailer which began its journey back in 2000 with the opening of its first wholesale and retail outlet in Jaipur, has seen a turnaround as a global platform, ever since the launch of its online retail platform in 2003. Offering more than 50,000 products and shipping to almost 200 countries, Utsav Fashion did GMV of 106 crore last year.
Iamwire caught up with Pradeep Katyal, CEO, Utsav Fashion to the know about the growth story, how is it doing this year and the future plans of Utsav Fashion.
Here is the detailed interaction.
How is 2013 going for Utsav Fashion?
Its going fine, as we are an export oriented organisation, rupee devaluation is also helping in achieving our revenue and profit objective.
Your market still remains to be the NRI market?
Yes, that has always remained outside India so far.
Any issue that you are facing in competition with players such as Cbazaar, and those who are also trying their hands in ethnic wears for NRIs?
As per our estimates, this market is 7k crore plus and we are only 100 crore, this can’t be any issues internally or for cost of customer acquisition.
You have recently launched a new mobile site and given you are serving NRI market which mostly surfs through mobile, it is actually quite late. So how do you see the new mobile site will helping in increasing conversions, etc?
I know we have taken long time to develop that, we still haven’t sent any communication to our customers so far. We are working on analysing the responses and will keep you updated with that.
When do you think Indian market will be open for more opportunities and what is the type of response you are having right now, is it worth?
We are getting better response from India because of factors such as improving local trust. Previously our domestic website experience was different than international, but if you see our international and domestic sites now, both are in same look and feel. This was done a week back and we are finding all the parameters improving such as the number of visitors have increased, bounce rate has reduced and it is showing better conversion. Though it is less than our international turnover but we feel its a positive step. Also in the coming month, the website will bring many new things in the domestic market.
Secondly, in terms of buzz around discounts and discount players, i think it is tapering but is still there as with this our Indian price points are quite near to our international price points.
Having passed the first stage of combining website international and domestic we will be further taking promotion and pricing initiatives to develop the Indian market, I think it will respond well.
What is the GMV that Utsav did last year, the year ending in 2013?
For FY 2012-13, value of orders were INR 106 crore, which was last time INR 56 crore in year ending in March 2012.
One thing is you have to be profitable. We experimented with a lot of things, for last 3 years it may not be positive, balance sheet is yet to be finalised and we have primarily spent a lot for developing our base. However, having said this, this was a controlled approach and then again March onwards, we are monitoring ourselves very closely and the model still remains comfortable.
So how do you acquire audience internationally? What is your main marketing strategy?
We primarily use Search Engine Marketing and we are spending INR 1 crore per month for it. There is a marginal return principle in digital means that if you increase the spend, the cost of customer acquisition keeps on going up in digital media. We experimented this with wide range of budgets and our customer acquisition cost can range anything from INR 700 to 7k. We know at various spend, what is our cost of acquisition.
What is your average ticket size?
Last year it was 8k, but because of the retail depreciation it is 7k now.
What sort of technology is being used to scale the platform?
Its homegrown on .Net, and has remained the same since start with all the advance features built on .Net. We are using a lot of peripherals including APIs. We also have invoicing module, so apart from .Net we have other core modules that are built around website. For future we have made investments and implemented some projects and some are near completion and others are close to start. Our CRM is already in place that we implemented last year, also we have made investment in financials tools which are at near completion and now we are starting to work on new ERP.
Do you also have customer support team to handle customer complaints and all?
We have 110-120 number team based in Kolkata, we always had call centre which was not automated. Also we are looking to take a call on whether to outsource or not outsource to scale.
How are you managing logistics?
Our own international logistic partner are among DHL, Fedex and for domestic we use players that are expert in domestic e commerce delivery.
How are the products sourced? Are these collected from various designers or manufactured on your own?
We have a very large merchandising team and that’s actually our core strength or you can say strategic strength because no other player in India currently can even look at that strategy of merchandising that too purely for Indian ethnic. We even go to artisans level and at the same time we buy from organised players and as well as from wholesalers, we have a wide range of merchandise on our website.
Which of your product category is having the highest demand in NRI market?
Customers are always interested in the latest, anything new that comes in the Indian ethnic category. If we talk of broader category than, sarees still dominate for us, followed by salwar kameez. For our NRI customers we are also stronger in the ‘Occasion’ segment.
From where do you see next two years of growth coming and what are your strategies to focus on that?
This year we will go for moderate growth but will be profitable that we are absolutely sure. We will follow alternate growth strategy, one year will go for growth investments and one year for profitability.
A lot of players such as NDTV are coming in ethnic retail. How do you see that? Any tips for the new players who want to come in?
I cannot comment about others, its my estimate that the market is 7k crore+ and any new player who comes in and creates interest in the category is good. I expect large organised players coming to the field to spend a lot of money on marketing that can help to grow the category, and therefore at least in the initial stages it can be beneficial for all the players in the market.
Three key things you see in the website, which gives right experience to the customers, which you have evolved with time?
One is variety and the other is customisation, and third one remains security of the payments.
How do you measure the customers coming on your website? How deeply analytics is involved in the backend?
We have a ten member analytics team, there are players who even have a 50 plus team. It is our philosophy that rather than discussing so much about individual customer profile we look for profile of customers according to what they shop from us. Its not that we go after a particular profile, i think that segment is Indian ethnic women overseas, it is itself a segmented profile. There also we know that 20% of our customers are from non-South Asian region and we are sensitive to that, but once the customer shops from us then we really look at collecting data. There are certain customers who are buying monthly from us and there are some who buy annually from us.
How big is the team?
Its same as last year, we have 600 members team.
Any data around daily numbers, number of orders you are getting on daily basis, conversions?
We get around 70,000 visits on the portal, 0.7-1 is the conversion rate.
From your perspective how difficult is it to be CEO of an ecommerce company, managing team to sell stuff online?
We personally focus more on people and lot of my attention goes on developing the team and that’s one model that we are trying to follow. Decisions are taken by the function heads and I make sure that they do proper due diligence while taking the decisions. My work remains low and I can spend more time on developing the team.
Any area you see where there is good scope of improvement? Any area you feel is falling short right now?
That is in every field, because we want to grow to be a big company therefore we look at the numbers very humbly, we are small right now but me and my team’s ambitions are big, and there is not even a single area where we can’t improve ten times more.
If i isolate anything particular that may not be fair on a particular team, but with respect to the external world i think one challenge is how to reduce the cost of customer acquisition and keep on improving technology that is absolutely critical as customer expectations keep on changing.