US Market Was Better Suited For E-com Transactions When We Started: eShakti CEO
eShakti, a Chennai-based online apparel retailer, was founded in 1999 by B G Krishnan who believes that the Internet holds the power or 'shakti' that will dramatically change the way business is done. Although based in India, the company only caters to the US market and offers a wide collection of fashion apparels in line with mainline trends. However, the company will soon launch its India brand Zapelle.
What differentiates eShakti from other e-com firms in the fashion business is the fact that its buyers can customise the size and the style of the garments on offer. In other words, now women can get tailor-made garments that will be a perfect fit.
The company has recently raised $3 million funding from IDG Ventures which it plans to spend on infrastructure-building, production, marketing and customer acquisition, among other functional areas. In an exclusive interview with Techcircle.in, B G Krishnan, CEO of eShakti, talks about his company, its soon-to-be-launched Indian brand Zapelle and the opportunities in the online space. Here are the excerpts.
What's the concept behind the company? Why do you call it eShakti?
We realised that the power of the Internet would dramatically alter the way businesses are done and also the way people interact. So we have come up with the name eShakti that means power of the Internet. And thanks to the Internet, we had the opportunity to develop a global B2C business and that's really exciting.
We are in the fashion business and make women's apparel for the American market, in line with mainline trends. But we also customise the size and style according to a buyer's requirement and that makes us unique in this space.
What prompted you to cater to the western audience?
There are many reasons, and leveraging the cost advantage is the obvious one. But building an international brand out of India was also exciting. Moreover, the US market was e-commerce-ready when we started, but things were different here in India. Also, we have a bigger market there in terms of fashion apparel.
You are saying that eShakti customers have the option to customise their clothes. How do you do it?
We offer an easy user interface (through pull-down menus) so that buyers can record body measurements â€“ essential for a perfect fit. We also have a visual aid in place to help them come up with custom styles. It's all very simple and can be done in a few minutes.
Is that option available for the entire inventory or just for selected items?
Custom-sizing is available for every product. And you can customise styles for most.
What's the market size of the industry in the USA?
The American women's apparel market is over $100 billion.
You have recently received $3 million funding from IDG Ventures India. How would you utilise the capital?
Investments are essentially made to leverage growth opportunities. At present, we are focusing on key functional areas like infrastructure, production, skill-building marketing and customer acquisition. We also aim to invest in viral marketing for better results. It's possible in the online space if you have a great product.
Are you planning to raise more funds?
Yes, it is likely that we will raise more funds. But we haven't set any date yet for that.
What is your marketing strategy?
It is very simple â€“ deliver a great and unique product (which we do), be completely transparent while dealing with customers and be customer-centric. Internet is that unique space where Davids can take on Goliaths if they deliver a great product and are upfront with customers.
Who are your competitors?
As of now, we don't have competition per se in the customised apparel space. But we don't mean to say that it's not likely to happen tomorrow.
What are the challenges you face?
Well, it's quality. Getting quality across the board in India takes a lot of training and dedication, and we are meeting that challenge successfully.
Tell us more about your global reach.
Currently, we are present in Delhi and Chennai, and our subsidiary has an office in New York and a customer service facility near Seattle.
What are your revenue structures and monthly burn rate?
Revenues come from repeat buyers and new customers, and we try to grow both. As far as burn rate is concerned, we spend regularly on search engine optimisation and search engine marketing, blogging and social media.
Do you plan to cater to the Indian audience?
That is quite likely. We think India is ready for high quality global products like women's apparel and we do believe that customisation will gain traction here as well.
So what's your next step in that direction? Are you going to launch an Indian brand?
Yes, we are going to launch Zapelle in India. We already have a website up to spearhead the initiative. Zapelle will feature topmost quality in fashion, fabric, garment engineering and finish. But even more than that, we want to ensure that we give our buyers a great fit and fall that they have never experienced before. We have proven expertise in this area and it has been tested in a highly demanding consumer market like the USA. So it should stand us in good stead here in India.
What are the future opportunities in this space?
Opportunity beckons worldwide when it comes to online space and you can definitely expand into the BRIC countries (Brazil, Russia, India and China). But you also need world-class products as the Internet can be very unforgiving if you deliver shoddy products or services. In fact, the Internet has turned the global marketplace into a store next door. So one can easily access global brands and shop for products that offer best value for money. As of now, value-for-money in many online markets is only about deals and discounts (more so in India). But very soon, other values besides pricing will be sought by consumers as they see the quality differences.