Fashion e-commerce venture Stylista.com* has signed a four month deal with Jabong to sell their designer wears exclusively for four months. The company plans to start offering their products on Myntra and Flipkart later on, apart from launching its products offline in India, as well as internationally.
Pricing on both portals (Stylista and Jabong) is the same, which means that Stylista takes a smaller margin on each sale on Jabong. However, it gets distribution, and a lower cost of sale. In addition, as per its CEO Avnish Chhabria, “The difference for us is that Jabong was willing to invest with us in marketing. They had gone out on a limb and committed to spend X amount for the next 4 months of marketing spend to help build the brand”. But what does Jabong get from this deal? “What we are essentially giving Jabong is product differentiation.”
No customer loyalty in e-commerce: Chhabria feels that shopping online is being driven by customers who are bargain hunting, but they will not be getting into that. “Now if you look at Jabong, Myntra and Flipkart the reason all of them are surviving is because customers are bargain hunting. If Jabong gives 30% discount then Myntra will give you 35%. Online has become a bargain shop, and not about product, and we wanted it to be about product. We believe whatever we are offering, it is essentially a sale for the customer. A customer would never be able to try some of these designer wears for 3,000 because normally in stores it would start at 15,000. We wanted to give customers an option to sample our designers… that was the goal. How do we make allow a normal college going kid to sample a designer before she goes out and buys a high priced item and how do we scale distribution for a designer,” he adds.
The company currently offers designs presented by famous designers such as Wendell Rodricks, Priyadarshini Rao, Nishka Lulla, Tanya Sharma, Yogesh Chaudhary and Rinku Dalamal. It is also adding collections from two designers every month and has a strict “no coupon” policy with Jabong to avoid further discounting of its products.
Stylista did not want to be a faceless brand
“Over the past 5 years if you see how high street brands have been delegated in India, you got your Zaras, Mangoes and Forever 21s and this is just European fashion which is delegated to Indian customer. The only essential true Indian brand was Anita Dongre and we understood the model it was built on. You design a platform that is inspired, you have a celebrity, you have a influence in the game that is dictating trend for Indian women. It was essential for us to understand that it was easier to create a brand that is relevant because you can relate to a face behind it. Unless it comes from a Deepika Padukone or a known celebrity you are not aspired enough to wear it. So what we have seen in the past few years is that a lot of European brands are delegating fashion down to this country at higher prices whereas most of these products were manufactured in India.
Not a private label
“When we started you know the whole goal was not be just another private label, which is more of a VC lingo. Any retailer who creates another brand within themselves is technically called a private label. There is margin differentiation… for someone like Jabong to sell Stylista they earn only 10% margin, but when they have their own brand they get 50% margin. Due to this differentiation VCs started using the term private label. In essence private label is just another brand. We never try to portray ourselves as a private label, we are a brand and we are a retailer.”
On Design Blindness & Burning Cash
“So we understood that if we are to be a leading manufacturer in this country we have to be a brand which has space to it we would have a winning opportunity and not another brand that is completely design blind, that is making fashion that is not influencer driven, not grounded, just another theme of young designers creating fashion and going to the market. We wanted to see if there was a faster way to get to the market, if there is apprehension from customer in accepting a brand that is, faceless and Jabong had been that faceless brand. What happens with such a brand is that you need to invest substantial amount in marketing and distribution in creating that brand like Freecultr; so we took a different approach.”
“When I say design blind I mean it’s not authentic or relevant enough for customer to know who designed Freecultr… no one knows. We thought about how do we (could) get to the market quicker with a brand that is more relevant. And not burning that much cash. If we look at Freecultr or Zovi and all these so called private labels, they burn upwards to 20-30 million dollars just to make themselves look relevant enough to be known to customer.
“When we created Stylista, we were very clear it had to be a design focused brand. If you look at Zara, again no one knows who the face behind it is. It’s fashion, it’s expensive… so we thought we need to be more relevant to the country. We got a large Indian designer, who is a big influencer and is 90% Bollywood. So we wanted to become that platform that is more collaborative instead of creating just a brand. We wanted to get past the market and create relevance and aspiration at the same time while not going after customer’s whole wallet. We wanted a share of it and not the whole thing. So we basically created a platform where designers focused purely on design and we took care of the burden of manufacturing.”
Secret sauce – vertical integration
“Until now there was no retailer online that’s a vertically integrated company… everyone’s a distributed retailer. Which means I need to have a minimum order. For example, if Freecultr needs to go out and make 500 pieces of one shirt, they’re sitting on large inventory, they’re not sure if it’s going to sell or not, they have no assurance of distribution and a customer’s never seen that product before or got aspired for. So we took a check on all these attributes and thought how we could create a brand that’s relevant.
“By being vertically integrated we have in orders in check, I don’t need to make a 1000 pieces. I only need to stock 20 and once they are sold I can replenish the stock. So I’m not in a large inventory game.”
*Disclosure: Rishi Khiani’s AntFarm, which has launched Stylista, is an advertiser with MediaNama