New brands in fast-fashion space are taking offline route much earlier than predecessors.
Bengaluru | New Delhi: A new wave of direct to consumer (D2C) brands such as Snitch and Newme in the fast fashion space, Soleth- reads and Neeman’s in the foot- wear segment, quick service res- taurant startup Boba Bhai, lug- gage brand Mokobara and beauty brand Pilgrim are taking the of- fline route much earlier than their predecessors.
Some of the mature brands such as Mamaearth, Wakefit, Sugar Cosmetics and Boat spent a lot more time selling online and building a certain scale before opening up physical retail outlets. However, younger brands are now being driven to offline channels much sooner aiming to de- leverage themselves from third- party platforms, looking to access a larger consumer base and building better brand discoverability.
Multiple investors and founders said that new ventures in the D2C space across segments such as fashion and lifestyle, electronics and food and beverages are going offline soon after raising the first round of funding with omnichannel being an important part of their strategy right from the get go. Lyskraft, a premium women’s fashion startup, founded by for- mer Zomato senior executive Mo- hit Gupta and Myntra founder Mukesh Bansal, has raised fund- ing as a natively omnichannel firm.
Investors are also aligned with founders on this strategy. “Today we have at least 100 digital
brands that are in the neighbourhood of ₹100 crore, and these would benefit from the tribal knowledge of going offline,” venture capital firm Accel’s founding partner Prashanth Prakash told ET. A joint report by Accel, Fireside Ventures and market research firm Redseer said about 90% of the Indi- an retail market will remain offline even as it scales to $2.2 trillion in size by 2030.
New-age brands are heavily relying on data from their online sales to decide which cities or localities to focus on when opening their offline stores. “These brands are syncing traditional real estate knowledge with their own shipping data to tar- get the right micro-markets,” said Anuj Puri, chairman of real estate consultancy firm Anarock.
Offline opportunities
Snitch, which raised Rs 110 crore from Singapore-based investor SWC Global and domestic firm Ivy- Cap Ventures, has opened six physical stores in Bengaluru, Vadodara and Surat. It plans to open 30 more by the end of this fiscal in metros such as Mumbai and Delhi as well
GOING PLACES
Younger brands want to deleverage themselves from third- party platforms and building better brand discoverability.
as smaller cities like Pune, Vijayawada and Dehradun.
The company’s founder Siddharth Dungarwal said the company estimates offline revenue to cross ₹200 crore in revenue, out of over ₹600 crore in total revenue.
Snitch also witnesses conversion rates of 50-60% in its stores, com- pared to 3-4% on its website. The average order value (AOV) spent in stores is also 2-3 times higher than spent online per customer, Dungarwal said.
“We have noticed that whenever we open an offline store, that leads to online sales from the nearby areas shooting up… customers like going to the store to get a feel of the fabric, the fitting and the size, and once they’re confident about the product they’re much less hesitant about ordering online,” Dungar- wal added.
Gurgaon-based Solethreads, a footwear brand founded in 2020 that has raised funding from Fire- side Ventures and DSG Consumer Partners, has three exclusive brand outlets (EBOs) with plans for five more in FY25.
The company’s cofounder and CEO Sumant Kakaria told ET that despite being an online first brand, it began testing its offline strategy early on with multi-brand outlets and large format retail stores.
“To achieve our ambitious $150- 200 million revenue goal, we believe a strong offline presence alongside a thriving online presence is crucial. Building an offline presence early allows us to establish ‘right to win’ in this channel,” Kakaria said.
Source- The Economic Times
