When one talks of Indian ethnic wear, sari is probably the first that comes to mind. These nine-yard wonders, besides being a household staple, makes a style statement like no other - be it red carpets or political visits, one such made by Indira Gandhi, India’s first female prime minister, when she went to meet former US president Richard Nixon in 1971.
Over the years, the sari, once a humble Indian drape, has seen an evolution of sorts, transforming into a fashionable garment, and not relegated to a set demographic anymore. With the advent of ecommerce, customers increasingly became adept at even ordering it at the click of a button.
According to Indian Brand Equity Foundation (IBEF), between April and June 2021, India exported $54.49 million worth of readymade silk garments, while total silk exports stood at $246.67 million in FY20. Silk is one of the most sought-after fabrics for saris.
For the love of weaves
This international demand is where online store has found a sweet spot. Founded in July 2017 by Pallavi Mohadikar Patwari and her husband Amol Patwari, Karagiri connects with weavers across India to sell their fabric creations on its platform.
Karagiri has also added jewellery, and non-commercial sari, among other categories, while simultaneously running their physical store in Pune’s Koregaon Park successfully.
Pallavi got the idea to start Karagiri when she was pursuing an MBA from the Indian Institute of Management (IIM), Lucknow.
“I would see a lot of chinkari weavers all across Lucknow, and when you come down to Pune it was not very easy to find these ethnic wears. Clearly, there was a demand supply gap here,” Pallavi tells YourStory in an interaction.
She started by selling a few clothing items through eBay for extra pocket money. But when people started placing orders, Pallavi knew she had stumbled upon a big opportunity.
With Rs 3 lakh, five weavers and 40 designer sarees live on the website, Karagiri began its operations. Two years later, Karagiri claimed it was growing 50 percent month-on-month, with an inventory of about 3,000 products.
But the company was facing growth issues when they couldn’t afford to focus on brand marketing.
“When we started Karagiri, we bootstrapped it with Rs 3 lakh by taking a loan from a friend. So, the initial few months were quite stressful as we did not have enough funds for marketing, and we were literally left with just Rs 28,000 in our account. It was a do-or-die situation for us. Then we decided to invest all the remaining money in marketing and it really picked up from there,” Pallavi told YourStory in an earlier interaction.
Partnering with Mensa
Karagiri, which is now working under Thrasio-like startup unicorn , says it has seen their products fly off the shelf since the partnership. The sari-seller was acquired by Mensa Brands in August last year.
“Things really changed, and for the better, since Mensa partnered with us,” says Pallavi.
The Ananth Narayanan-led firm acquires digital sellers, across fashion and accessories categories, and scales them using their retail wits. So far, Mensa has acquired 16 firms including Ahmedabad-based men’s brand Villain, jeweller-seller Priyassi, Ishin, a Mumbai-based ethnic wear brand, and home décor label Folklture, which caters majorly to the US and UK markets, and gardening solution brand TrustBasket.
When online shopping shot up during the pandemic, many digital-first startups took off. These include the likes of SUGAR Cosmetics, Sofina Capital-backed Mamaearth, and bOAt Lifestyle, which is reportedly filing for an initial public offering (IPO). With global shopping becoming common– unbranded products also started taking off in a few categories.
Hence, while the direct-to-consumer (D2C) sector boomed, so did acquisitions. US-based Thrasio, which was founded in 2018, started acquiring sellers on Amazon and other marketplaces.
Credit: YourStory Design
The company crossed $5 billion valuation through this business model and now India is also seeing a wave of acquisition-based startups, sending founders and investors into a frenzy. Earlier this month, Thrasio has also hit the Indian shores with its first acquisition, and a plan to deploy Rs 3,750 crore.
Mensa and its competitor GlobalBees are both recently turned unicorns, who got elevated to the billion-dollar club in their fund raises during 2021. While Bengaluru-based 10 Club raised $40 million, making it the biggest seed round in South East Asia.
From domestic sales to exports
Karagiri wanted to export their products and they claim to have done so with Mensa's technology and e-commerce understanding. Currently, exports make 10 percent of Karagiri’s revenue share while the remaining 90 percent come from domestic sales.
These sales majorly happened in the US as the demand was coming from the Indian diaspora in the country. Karagiri is also growing almost 2x faster at 150 percent every year, it claims. The company has also added jewellery, and non-commercial sari, among other categories, while simultaneously running their physical store in Pune’s Koregaon Park.
Although refraining from sharing its revenue and expectation numbers, founders of Karagiri claim they see a repeat order rate at about 30 percent. Pallavi and her team can also collaborate with other founders in Mensa’s portfolio.
“When we were launching our jewellery brand, we got guidance from Priyassi - the jewellery brand in Mensa’s portfolio,” says Pallavi.
As a former Myntra CEO, Ananth’s expertise in running a fashion ecommerce is well-known. While Ananth sees immense opportunities in this segment, what he is more kicked with is the fact that exports done through dot-coms was around $1 billion dollar in 2020, growing at 100 percent year-on-year.
“It’s exciting to see Karagiri, one of our first investments growing at 5-6X of the market, and we are especially thrilled with the new global launch of Karagiri,” Pawan Kumar Dasaraju, founding team member, Mensa, told YourStory.
“We will continue to leverage our capabilities to build Karagiri into a global premier ethnic wear brand,” he added.
On its part, Mensa has helped Karagiri by pulling multiple levers, like launching in new markets, making Karagiri available on marketplaces, launching new categories, and streamlining global supply chain operations.
While Karagiri is riding high on growing demand from India and abroad, they still have a long way to go. The startup faces stiff competition from multiple sari players across online sellers– including Suta Bombay, Swatantra, Fabindia and Koskii– to designer labels including Sabyasachi and Anita Dongre, and fashion marketplaces like Myntra, Amazon and Flipkart. What remains to be seen is how Karagiri, with all the help it gets from Mensa Brands, creates a niche for itself.
Edited by Anju Narayanan and Rajiv Bhuva