Vedang Patel, Rohin Samtaney, and Aditya Sharma were in a fix when the coronavirus-led nationwide lockdown was announced on March 24.
The warehouse of their ecommerce startup, The Souled Store, was eerily quiet: packages and cartons lay everywhere and the machines that manufactured top franchise merchandise weren’t running.
The situation was alarmingly different from a month ago. Back then, The Souled Store, with over a lakh orders a month and an average basket size of Rs 800, had been clocking steady growth of close to 2x to 3x each year since 2014.
The pandemic meant that work and shipments were at a standstill.
Fast forward a few months, and the fan merchandise ecommerce startup has regained lost ground.
Vedang confirms that the startup has been able to operate successfully – orders have reached the one-lakh-per-month level and the average basket size has gone up to Rs 1,000. “We are expecting a 3x rise in order volumes in the next three months,” he says.
How did The Souled Store do this – that too without layoffs?
The fan merchandise startup took small steps to ensure that it survived the pandemic: it began producing face masks (considered essentials) and offered discounts to consumers. The founders did not take any salary for four months.
The team was used to running operations in a frugal way, and having a loyal customer and fan base helped the team reach out for community building exercises and understanding requirements.
“Consumers were willing to place online orders and wait for shipments until the lockdown ended…that gave us much-needed breathing space,” Vedang says.
The back story
When the 29-year old Mumbaikars launched Souled Store in 2013, they were fresh out of college. They started up in a garage and soon moved into a chawl.
The friends had one idea: to build a small but profitable ecommerce company focused on licensed merchandise. “We started with Rs 500,000 of our personal savings and paid Rs 200,00 to our friends to build the website.”
Vedang recollects, “I have always been a fan of Star Wars and the like. Their merchandise was not easily available in India at the time. Even if it was, it was very expensive. I felt I could easily do this in India. There are a lot of fans in India, so there’s a definite market.”
In 2013, unlike the US where licensing is a market worth $250 billion, there were few small players but no market leader in India.
Cut to today, The Souled Store has tie-ups with all the top franchises: Marvel, DC, Harry Potter, Star Wars, IPL, and more. The ecommerce platform has 2.2 million monthly visitors, over 150 official merchandise options, and more than 1,000 designs.
“We used Facebook to target the exact audiences we needed. We knew there was a need to build a community of loyal early adopters for The Souled Store to grow,” Vedang says.
How did they survive?
The Souled Store’s base of loyal customers helped the startup tide over the lockdown. The team put out an honest video and an ad, offering a flat 30 percent discount on merchandise for prepaid orders.
“We told our customers that operations had come to a standstill. We said we needed the capital to survive, and would ship the orders the minute operations resumed. With the discount, we were able to get close to 30 to 35 percent of revenues in April. It was a testament to the community we had built,” Vedang says.
Needless to say, the founders took no salaries amid the lockdown (until non-essential ecommerce shipments were allowed). The team took a salary cut of 20 percent and there were no layoffs.
The founders of Souled Store
“It was one of the most difficult decisions we have had to make. We knew the market was bad. A layoff means one of us isn’t going to find a job that easily. So, as founders, we didn’t take salaries, and gave a salary cut for that period. It was tough for three months,” the founder says.
Summer is one of The Souled Store’s busiest seasons, and the startup had to deal with cancelled orders and zero deliveries.
“That means there was no liquidity. We had asked the team to work from home from before the lockdown, as there was a high risk at that point,” Vedang says.
Garnering 30 to 35 percent revenues ensured that salaries were paid and basic operations continued.
Masks, algorithms, and more
The next step was to keep manufacturing going, and the team decided to launch an essential category: masks. The Souled Store made masks for Mumbai Police, and started shipping them; all proceeds were earmarked for COVID-related efforts.
The fact that the team had a finger on the pulse of their target audience helped get manufacturing back on track. If you are a Harry Potter fan and have shopped from The Souled Store, you would have received a ‘Hogwarts Letter’ along with The Daily Prophet. These little extras ensured that people returned to avail the 30 percent lockdown discount.
Vedang explains they got the design and tech aspects of the merchandise right because “fans design and make the merchandise”.
“The designs are still run past me and the manufacturing begins only after a fan approves. Most apparel companies face problems because of unsold SKUs and inventory that needs to be written off,” he says.
Algorithms help analyse daily sales, what works, what doesn’t work, and conversations, and build predictive algorithms. “In seven years of business, we haven’t written off anything.”
When India began opening up in early May, the team had to work through confusion to complete earlier orders and handle customer calls/emails.
“The logistics and supply chain were still catching up, but from May end things started getting better. We have been able to make our promised deliveries on time,” Vedang says.
The Souled Store merchandise
Shifting consumer behaviour
While the lockdown severely impacted non-essential ecommerce in India, consumer preferences are slowly shifting towards online brands.
An analyst at a top research firm explains, “Online ecommerce has always been a small fraction of overall retail market globally. But with COVID, behaviour patterns are changing; more consumers are looking at online spends. Discretionary spends will lower…with movies and travel out, fashion ecommerce and beauty and wellness are segments that are growing.”
Echoing this sentiment, an ecommerce trend report released by Unicommerce says the online sale percentage in India is at 4.5 percent as compared to China’s 15 percent. The global average is 14 percent.
With the opening up of non-essential ecommerce, the sale of online fashion and accessories has seen a surge of 26 percent. Ecommerce as a sector has seen order volumes grow 20 percent; GMV saw a rise of close to 23 percent with an average order value of Rs 1,100.
There also has been a significant drop in return percentages.
The numbers do the talking: ecommerce is the way forward. No wonder then that The Souled Store is bullish on the future, despite COVID-19.
Vedang says the team is expecting 3x growth in the next three months. “From January, February, and March, when people may start going out, there will be an increase even in our offline presence,” he says.
Edited by Teja Lele
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Link : https://yourstory.com/2020/09/souled-store-fashion-ecommerce-revival-coronavirus-lockdown
Author :- Sindhu Kashyaap ( )
September 07, 2020 at 05:25AM
YourStory