VISMAY SOURAV Smart Marketing with Craftsvilla C H A O T I C S
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VISMAY SOURAV
Smart Marketing with Craftsvilla
CHAOTICS
Craftsvilla: A unique Venture
Key takeaway: One of the largest online stores sells a saree every two minutes and a pair of shoes every 30 seconds
“A road trip to Kutch made possible a $400 million start-up, Craftsvilla!”
Overview
Road-trip to Kutch (Monika & Manoj Gupta)
Craftsvilla: Marketplace& Private label (2011)
Aggregating 12000 artisans (giving tech-support)
A leaner team: low costs
Fresh Funding: Sequoia, Lightspeed and Nexus
•Branded Wear•$1.2 trillion market•Online - growing
•Unbranded Wear•$904 billion market•Online - growing
APPAREL INDUSTRY OVERVIEW
Clothing & apparel industry: Mega Trends
Key takeaway: Those retail formats and E-commerce players who are extremely consumer-centric, and who heed to the above trends, will earn better financial returns on their investments.
“Fast Fashion is the most important disruptor in the fashion industry today.”
*Adapted from a PwC Report ‘Disruption in Fashion Industry’
“Know me” “Engage me” “Make it easy for me” “Wow me” “Make it work”
Aligning branded labels to TG Seamless cross-channel integration
Renewed focus on physical retail
OperationalExcellence
“Omni-Channel Retail”Chroma Stores: using its strong distribution: 16
cities: same day deliveryET Retail Award: ‘Omni-channel of the year’
“Fast Fashion”Zara, H&M
“Exclusive FashionBoutiques”
Manish Malhotra,Tarun Tahiliani
“Sharp Brand focus”Craftsvilla – Ethnic Wear for Women
• Customer-brand fit• Clear positioning
• Big Data• Crowd-sourcing • Direct interaction
• Seamless shopping• Convenience• Touch & Feel
• New store formats• Personalised Service• Niche, differentiated,
• High-end
• Flexible supply chain• Reduced inventory cost
Trends
Craftsvilla: Celebrating Days
Key takeaway: ‘Celebrating Days’ is a major marketing strategy deployed by E-Commerce companies to drive topline
“5000 Ethnicities. 6500 languages. 196 Countries. One World. ”
*Data taken from ‘Digital Vidya’
19th June: World Ethnic Day
10 Lakh bindis distributed
Colleges (Andhra Loyola) & Companies
Singles Day, Alibaba
120,000 orders/min
Drives Topline: $14.3 billion in sales
Marketing
Craftsvilla: Referral Mktg. & SEO
Key takeaway: ‘These low cost means are employed to ensure effective spending on the Advertisement dollar.
“67% of Craftsvilla’s traffic is generated organically.”
*Data taken from ‘Digital Vidya’
Referral : Direct Marketing
“Online Agents”: 10% com.
Tap the network of family, friends and neighbours
SEO: ‘3000 keywords’
Higher Visibility, Lower Competition, low-cost
Regular effort, not easy
Marketing
Craftsvilla: PR Activities
Key takeaway: Marketing spend reaches 50% of some E-Commerce Giants, while through Frugal Marketing and a focus on organic traffic, that cost can be driven down drastically.
*Data taken from ‘Digital Vidya’
Ms. Ethnic Beauty Pageant
Fashion bloggers: Buzz
Emotional connect:Support Artisans & Handloom Inc.
100+ social media platform
Campaigns in Theatre/ Radio - target women buyer
Generates ‘goodwill’
“Marketing spent of Craftsvilla is less than 10% of its total revenues”
Marketing
Craftsvilla: returns
Key takeaway: Craftsvilla has a lean model with conservative marketing budget. However it needs to focus on increasing its ROMI, beyond 1.0 at least.
“The only profitable E-commerce marketplace in India”
•Craftsvilla takes a commission of 20-23% of each product sold.•Fee is inclusive of shipment cost•It does not invest in warehousing•Employee cost is low as it works on a lean model employing 8-10 people
DATA FOR CALCULATION
ITEM FIGUREPAT 12,000,000
PAT [%] 0.01
REVENUE1200,000,00
0MARKETING SPEND 120,000,000
INCREMENTAL REVENUE 540,000,000CONTRIBUTION 189,000,000
ROMI 0.575
Note: Values are calculated on the basis of sales figures of Q2,2013. Contribution has been considered to be 35% of revenue.
•Craftsvilla: profitable online marketplace. •Although the ROMI is less than 1, which is worrying .• However given Craftvilla’s rising GMV, it is expected that the ROMI will rise with economies of scale
REVENUE MODEL
CALCULATIONS
*Data taken from ‘Your Story’ articles on Craftsvilla
Finance
The Way Forward!
Key takeaway: Along with Frugal Marketing, a global focus and a strategy to extend service to the consumer via specialised brick-&-mortar format might help Craftsvilla chart new heights
“How can an Artisan from Kutch compete with designers from Milan?”
•Promote its offering globally•Early Adopters: NRIs•Differentiated offering•Higher Margins : Exchange-rate benefits
SELLING GLOBALLY!
12000 ARTISANS
100+ COUNTRIES
•Omni-channel retail + Personalized boutique experience•Artisans of Kutch – designing as per your requirement•Convenience: Home Delivery•Improve shopping experience: Virtual Showrooms
OMNI-CHANNEL RETAIL?
BOUTIQUE STORES
Way Forward
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