India has become the third-largest start-up ecosystem in the world and home to 21 Unicorns valued at US $ 73.2 billion and there is a possibility that more than 50 start-ups will join this unicorn club as early as 2022. In fact, according to a report, Indian start-ups raised US $ 9.3 billion until mid- December in 2020, which though a little below 2019, but is definitely encouraging during the ongoing pandemic. Cities like Bengaluru, Mumbai and Delhi/NCR have become the hubs for start-ups and the cities have found a place among the famous global start-up hubs.
According to Forrester Research, India’s retail sector was estimated at US $ 883 billion in 2020 and the market is projected to reach ~US $ 1.3 trillion by 2024. The industry is slated for an exponential growth with retail development taking place not just in metros but in Tier-2 and Tier-3 towns as well. Consumer spending too is increasing and has reached US $ 245.16 billion in the third quarter of 2020 from US $ 192.94 billion in the second quarter of 2020. Moreover, the rise in e-commerce industry which is expected to increase by 84 per cent by 2024, has also facilitated the growth of start-ups in the country.
Now, among all the segments in the retail category, fashion is one of the fastest growing and is making breakthrough even during the pandemic with constant innovation and adoption of sustainability measures. The share of apparel and accessories in India’s retail market is growing at a CAGR of 15 percent. This and various other factors have facilitated the emergence of start-ups in the category. While the time is ripe for more and more start-ups to launch and start operations in India and the start-ups in the country are even attracting more and more investors to splurge, this, in no sense, means that the entire process of launching and running a start-up is an easy one.
The success mantra
The Indian Government has realised and taken it upon itself to support every enterprising entrepreneur in his endeavour and it has become somewhat of a focal point for which 7 Central Ministries have been instrumental in launching policies and schemes that address their financial woes and provide procedural support. While the Government and other kind of support and infrastructure is definitely present for the aspiring entrepreneurs and this does help a number of start-ups hold solid ground and become a success, there have been many that have fallen prey to tough market conditions. In this scenario, it is indeed interesting to know what will really work for these new start-ups and what will keep them operational in the long run.
Praful Makwana, Founder, Sepia Stories, asserts, “Fashion start-ups are constantly balancing art (design) and commerce. One needs to take into consideration how they want to portray their start-up, their target audience, what will make their merchandise stand out in the customers’ eyes and what challenges they will have to overcome to launch or design the clothing line. From design inspirations, sampling, production, packaging, building a web presence, to finding partners or investors, and much more, there will be a lot of areas to take care of in order to build a brand/ label. For me, being environmentally conscious really resonates with today’s aware consumer base. Building the business keeping ESG in mind is the most important success mantra I follow.It is imperative from a long-term prospect that positive contribution to society should be at the core of all business decisions.”
For Harsh Lal, Co-founder and Director, The Souled Store, offering right experience is the key. “One of the reasons we are successful is that we focus on giving our 200 percent to the customers. The Souled Store was started to give official licensed merchandise to the consumers in India and give the fans what they want and we made sure of that from Day-1 – the product that you buy comes with an experience of buying from a retail store. The kind of communication that we have and even the customer care responses, are accompanied with puns, jokes and references. So, I make sure that every time a customer buys from us, it’s an experience and not just a transaction and that’s been the core focus for us since last 8 years and that’s actually helped us build a loyal customer base of over 2.5 million customers,” he says.
Besides, passion and zeal to turn an idea into reality too plays an important role in making a business successful. Neeman’s was a result of such passion when Taran Chhabra took it upon himself to fill the void while crafting footgear that was comfortable, sustainable, of high quality and stylish to wear anywhere and everywhere. Fashion start-ups have been at the forefront of re-inventing, re-strategising and re-aligning themselves to rapidly evolving business environments and changing consumer needs and the segment is witnessing a number of newer brands establishing their niche.
Starting your own fashion start-up entails a combination of hard work, patience, passion and lot of creativity. While it definitely will not be the easiest business idea to start, it can be an extremely rewarding business with huge upside. Furthermore, the rising adoption of D2C amongst fashion start-ups has also helped them build a strong ground by connecting and servicing the consumers directly, leading to higher growth. The brand websites have reported 66 percent order volume growth and 77 per cent GMV growth as against marketplaces that have reported 45 percent volume growth and 33 percent GMV growth in FY 2021 as compared to the previous financial year, according to a report. In line with this growth, start-ups are focusing on D2C business model and also on technological integration in order to connect and resonate with today’s customer base.
Mansi Gupta, Founder & CEO, Tjori, avers, “We are a data-driven company and technology is our biggest strength. We have evolved after a lot of testing and learning with the current tech base we have which is the sales-driven front end and process-centric backend. An in-house tech team has designed our apps for both the IOS and Playstore. The biggest innovation we have seen is the use of data analytics to drive our sales up with an optimised user interface.” For Tjori, setting the goal right and then having the right planning to execute them and consistent and enough capital have gone a long way.
Advising fellow entrepreneurs, Taran Chhabra, Founder & CEO, Neeman’s, says, “A piece of advice that I would give to fellow and aspiring entrepreneurs is to never lose sight of the goal. Yes, there will be hurdles, opposing views and self-doubt, but it’s precisely at these times that one needs to shrug everything and remind yourself why you started this journey and what you plan to achieve. Believe in yourself. Imagine your success. Take action. It’s the idea, product, or service that is the starting point for a start-up. So, conduct thorough market research to understand the gap. After that, create a meticulous marketing strategy that highlights the USP and showcases the need of your product to the customer. If you get that right, then there is no looking back.”
While focus is important, what really works for any entrepreneur, according to Harsh Lal, is the entrepreneurial mindset. “I think personally from my experience, what’s most important is not the hard skill or the technical skill that you bring to the table. I think the most important skill that an entrepreneur needs to have is the right mindset. We are going to basically have new challenges every single day and most of these challenges will be things that you can’t really control or be prepared for. I think it’s important to have that mindset that every single day when you show up at work, you are going to face challenges and this will help you succeed ultimately. It is also very important to understand that some people are built to be entrepreneurs and some people are not and I think it’s very important for you to realise whether you have that mindset or not. Furthermore, let me point out what really has worked for The Souled Store and is the differentiating factor between us and our competition. Two very important things that we basically believe in at The Souled Store are customer feedback and use of data across every single department at the brand. Every single time we launch a new product, a new design or a new category on our website, we do atleast 3-4 callouts with customers with regard to products based on if they liked the colour, the quality, if they think it was value for money, etc. So there are 5-6 criteria based on which we judge every product and we make sure that every product atleast has a 4.5 rating out of 5 and if there is any feedback on something we can improve – be it design, pricing or quality, the available feedback is passed on to the concerned department wherein we are constantly improving and basis that, we decide on what colours, designs or fabrics we should launch next and what kind of collaborations customers are looking forward to. I think customer feedback and data is the core of every single decision we make,” he adds.
The survival instinct
Even as the country is witnessing a slew of fashion start-ups emerging today, they have not been operating without their share of hurdles which include national and then partial lockdowns, economic slowdown, changing customer shopping behaviour, among other factors.
Mansi Gupta says, “The study of consumer shopping behaviour helps a start-up to keep going. It is important to understand how, when, what, why and other factors that have influenced the customer to purchase a particular product or service. If a customer has visited our website and has stopped at a particular product, it’s because they had something similar in their mind. So, it will accordingly help the company design a product or service that satisfies the customer. It also helps the brand set the price at which the buyer will purchase the product and to decide the best promotion method.Knowing the pulse of the customer and working in line with it helps in retaining them. During the pandemic, needs have only changed, not ended. So, we should look for newer ways to cater to the needs of the customer. It is important to take up this challenge to build a new way of business with a positive mindset. It is time to look for opportunities in the right place. Customer retention plays an important role in keeping the brand afloat during such times. The companies should try and come up with offers, discounts, etc. for the customers. Cash inflow is important, so it is nrecessary to keep looking for ways to get as much funds as possible and not spend on things which are not imperative.”
Tjori has recently signed an equity deal of Rs. 16 crore with the media giant Hindustan Times. The establishment with Hindustan Times will help build brand awareness in India and accelerate growth at the global level.
The previous year has been anything but uneventful for the Indian start-up ecosystem. Even as the announcement of lockdown in March 2020 ascertained that there will be unforeseen challenges, start-ups managed to navigate through this in an encouraging manner with technological integration, customer feedback, etc. Today, the Indian start-up ecosystem is home to approximately 38,815 active start-ups which is inclusive of both funded and bootstrapped start-ups.