You’re reading it here first: Info Edge has invested Rs 16 crore ($3.5 million) in 99Labels.com, an invitation-only boutique shopping site founded by Ishita Swarup and Anchal Jain. 99Labels competes with Fashion and You and Exclusively.in, among others. Speaking with MediaNama, Info Edge CFO Ambareesh Raghuvanshi said that the Rs 16 crore amount is a mix of primary and secondary investment, since they are buying out some angel investors, and 80% of the total amount goes into the company. Some angels are staying on.
Raghuvanshi believes that the e-commerce category in India is taking off – this is their second such investment after investing $2 million in group buying site MyDala. “This business, more than any other business, depends on the kind of goods. if you have high quality goods which are attractive, they will sell. The differentiation will be ability to source good products.”
That’s exactly where much of the money will go towards – 99Label CEO Ishita Swarup told MediaNama that they’re “putting international brand sourcing into high gear”, and a large part of the money will be invested in that initiative, as a means of differentiating from competitors in India, since every one sources from the same labels. She says that 99Labels has representatives in New York and Paris, and apart from Luis Vuitton, everyone gets discounted internationally. “The entire system of liquidating stock is not well set in India, and internationally, it’s a much more mature market. We’re in talks already, and identifying brands.”
Targets and Challenges
Swarup says that 99Labels has a member base of around half a million, and, depending upon the month, “we
are hosting 140-150 (sales) events a month, doing 600-700 sales a day.” The company is now looking to double that in the next six months. But, in a market that growing-as-if-on-steriods, isn’t that rather tame? Swarup believes it is an aggressive target – “The challenge is not to ensure is getting the order, but in the delivery. We’ll have to continue to strengthening our back end. Increasing front end sales is a function of marketing.” Note that 99Labels takes title of goods, creating logistics and infrastructure, giving it control over the customer experience.
Swarup says that the current challenge is in sourcing from certain brands. “We say 20 days of delivery, but we deliver earlier in a large percentage. Reaching small towns is a challenge, but we don’t find cash-on-delivery an issue.” The company charges charge extra for delivering, and says it is normally out-of-pocket when it comes to distant towns. “If you order across 3 sale events, there are times when I haven’t gotten one of the products into my warehouse within the stipulated time – so I have to end up picking up the cost of delivering one of the two times, even though I’m charging for only once.” Pilferage during delivery, she says, has not been an issue. “All metros are huge for us, but if you take away the top 6-7, the next that you drop to tier 3, tier 4 towns. North is a huge focus.”
The company has a return policy, so reverse logistics is also tricky; the return percentage is low, she hastens to add.
Going mobile
99Labels plans to go mobile this year, though Swarup said she’s not sure if they will do a full fledged m-commerce model.
Why Info Edge?
It was reported that the company was in talks with Canaan Partners for an investment. Swarup says that they “talked to many potential investors, but the decision was go with just money or with ‘strategic plus money’. We thought that strategic partners would help.” Did the fact that Multi-Brand retail outlets in India cannot raise venture capital funding make a difference? “Honestly, there are ways to go around it, but they are still grey ares. That was a happy co-incidence of going with Info Edge.”
