We're motivated to offer the fashionable Indian woman exactly what she needs and wants: Rashi Menda,CEO, IS.U
In an interview with BW Businessworld, Rashi Menda, Founder & CEO of IS.U, talks about her fashion brand IS.U and its success in the online fashion industry along with the brand's plan of action to deal with the market meltdown post 21-day lockdown. She talks about various challenges faced, expansion plans, monetization model and funding status.
Q1. Considering the fact that there are brands like Amazon, Shein, Limeroad in the field, what makes IS.U different from its competitors? How challenging is it to create a customer base in the market amidst their existence?
One look at your fashion options today, and you'll notice, there's not much for the stylish, confident queen of today. Sure, the markets are teeming with international fast-fashion names, but are they made keeping Indian women in mind? More importantly, the body type? The Indian body is of a beautiful, unique proportion, and creating garments to flatter it is, well, not every body's playing field.
At IS.U, we're motivated to offer the fashionable Indian woman exactly what she needs and wants. We researched the Indian female size for an extended amount of time, and only then, came up with the three magic words - fit, fabric and finish. We realized those are simply all the ingredients it took to make the perfect clothes for women who are constantly on a run and want to look stylish and trendy at all times.
While we worked on getting the product right, we also knew the right communication with our users was very important. Our audience is young, ambitious, confident millennial women and they are looking to get inspired by influencers who are authentic, candid and approachable. It was an easy choice for us to collaborate with Radhika Apte and create a collection with IS.U.
Q2.Due to the 21 day lockdown, the online retail players are expected to grow only by 5% this year, in the most optimistic scenario, compared to about 26% growth in the previous year to reach $23-24 billion in gross sales. How do you plan to amend your business model to deal with the market meltdown post lockdown?
We have been monitoring our customer behavior very closely while we are in the lockdown. We have been only working on retention and how to better the experience for our already acquired users. Post the lockdown, people will be more cautious when it comes to non essential goods and affordable goods are likely to do better. Our focus is to fight the shortage in the supply chain that most of the brands are facing and offer the products at the right time at the right price. We obviously will have an upper hand compared to the international competition as the borders may not open for a very long time. So domestic brands will have an advantage here.
Q3. Fashion and lifestyle brands are offering steep discounts and pushing sales online amid an inventory pile up due to the closure of stores nationwide following the COVID-19 virus outbreak. Do you suffer such problems? How do you deal with them?
We usually don't have inventory dropping in the months of April and May as they are heavy discounting periods. As I said, we are focusing on retention and getting our existing users to have habit-forming behavior on our channel, so we don't have to lure them with discounts but with a great experience. We are revamping our tech and creating intelligence that will have the ability to track the users' closet and will be an excellent recommendation engine.
Q4. While many of the E-tailers have been on bankruptcy watch for months—typically due to some combination of falling sales, low cash reserves and too much debt—the coronavirus could fast-track their demise. How vulnerable is your startup?
We have taken a few steps to decrease our spending so we can exist longer if lockdown gets increased -
1. Longer credit periods with our vendors
2. Making sure the supply chain is not affected due to COVID-19, we need to come out of this stronger and have fresher options for all.
3. Cut down on extra expenses at this moment and focus on retention over acquisition.
Q5.Are you offering any employee benefits amid the COVID-19 crisis? What initiatives are being taken by IS.U to provide relief?
Currently, at IS.U everyone is getting their full month's salary paid, we have people working in departments where not everyone can work from home, for instance, employees working in warehouses, pattern masters, etc.
Q6.What is the funding status and monetization model?
IS.U is currently not funded and was created with an objective to run as a profitable business. The brand is growing by 42% MoM and we have great things planned in the future.
Q7.How do you look at expansion?
We were to enter offline this year, we had plans of launching 18 stores with a mix of a shop in shop and stand-alone stores by the end of this year. We have pushed that plan to the next year now post this COVID-19 situation. We will continue to increase our visibility online through other channels we are present on and our own website - www.isufashion.com
Q8.What is the market size and opportunity?
Fashion E-commerce starts at a very nascent stage - Rs. 500, where it is need-based shopping rather than want-based. The second segment that comes in is the high street, where people are shopping trends and do not care for the fits or quality of the product - they are the much younger audience and spending between Rs. 800 - Rs. 1200 on the fashion trends. Post that market jumps to premium fashion, which has mostly international competition like - Zara, H&M, etc. with an average selling price of Rs. 2200. We saw a gap in the market, the mid-segment - a bridge between Highstreet and Premium fashion, where we saw the opportunity to capture the working women market. They are independent and have multiple occasions to dress up for - they are specifically looking for styles that will make them 'look great'. Look Great - factor is achieved when a garment fits you right and is a trend that she is looking for.
The estimated size of fashion e-commerce is about $30B, Market for matured buyers/mid-segment market is estimated to be $6B, We wish to capture 10% of the market share by providing clothing for all lifestyle needs of women in the mid-segment, therefore we wish to capture $0.6B market by 2022
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