Excl: Fashion house Kimaya to invest Rs 30Cr in e-commerce foray
Mumbai-based multi designer fashion house Kimaya has earmarked Rs 30 crore (about $6 million) for an aggressive e-commerce foray. Company sources said the funds for the e-com foray will be drawn from the $11.3M (Rs 60 crore) it raised from private equity firm Franklin Templeton Investments.
Kimaya will develop six different e-commerce websites, which are expected to be launched by November this year, a top executive told Techcircle.in.
They include its flagship website Kimaya.in, where you can buy designer wear online, and new websites like Karmik.in, which will sell mid-ranged branded apparel, and designerack.in, where designer export reject wear will be sold at discounted prices.
Last July, Franklin Templeton had acquired 20 per cent stake in Kimaya for Rs. 60 crore, valuing the company at Rs 300 crore. (See our video interview with Pradeep Hirani, Founder & Chairman of Kimaya.)
Asked about the company's online plans, Pradeep Hirani, Founder & Chairman of Kimaya, said: "We all know, just brick (offline) doesn't look like the future."
The project has been on the works for the past one year. The company claims to employ about 120 people for e-commerce alone, a majority of them being programmers and other technical staff.
Kimaya will be building a virtual store, where a virtual impersonation can be created by the customer by inputting her physical measurements. This virtual impersonation can try out different dresses and see what suites her best.
The company will also have a mobile trial room in the form of a minivan, which will go to the customer's residence with the dresses selected for trial. The customer can try the dresses on and then buy the one she likes.
This would imply that the logistics will be handled by the company itself, while mid-ranged brand karmik.in and mass market brand designerack.in would rope in third party logistics providers. The company has already tied up with dry cleaning multinational Pressto for five lakh dry cleaning vouchers, which will be given as freebies to the customer, as dry cleaning constitutes a major chunk of expenditure to maintain designer wear.
Kimaya Fashions posted revenues of Rs 76 crore in FY12, which is estimated to touch Rs 97 crore by FY13. According to a report by Bain Capital India, the e-commerce retailing market was close to $900 million in early 2012. It is expected to grow at a CAGR of 25 per cent to $2.8 billion by 2016. The report also says that PE investment in e-commerce rose 37 per cent since 2010.
(Edited by Prem Udayabhanu)