Rs 10 crore turnover in two years – Variation shows the way
According to a report by Global Industry Analysts, the global market for mail order catalogue business is expected to touch $835 billion by 2015. Though very convenient, this form of shopping has not been very popular in India. Nevertheless, a young entrepreneur is using his business skills to push the boundaries and challenge the norm.
Twenty-nine-year-old Vishal Vaghasia started Variation.in in 2010. Variation is an e-commerce-cum-direct selling business that retails sarees, kurtas, dress materials, handbags, fashion accessories and jewellery. While the e-commerce part is taken care by the website, for direct selling Vishal is using the mail order catalogue model. “The market for apparel business in India is worth Rs 60,000 crore and mail order is a big industry globally. By combining the two, we have managed to achieve very good growth,” says the entrepreneur.
Variation started with an investment of Rs 2 lakh and Vishal says he closed last year with a turnover of over Rs 10 crore. Besides its own website, Variation also sells through other e-commerce sites.
The startup has a team of 15 people working from Mumbai and their warehouse is based in Surat. Since starting in 2010, Vishal says they have fulfilled over two lakh orders pan India. “We design the deals and source in large quality from direct manufacturers at lowest price. As we keep ready stock, we can ship any order within 48 hrs,” he says.
Plans are also afoot to discuss inventory stocking with vendors and direct dispatch from their end.
When the company started in 2010, Variation sold only jewellery. However, based on the customer feedback, Vishal says they have expanded their category of products. So when the entire world is going the ‘e-way’ why is Vishal looking the other way? “We are transforming ourselves as a direct selling company and see really good growth in this sector. E-commerce helped us reach customers. But we are not people from typical IT background, but from retail and sourcing background, which is our main strength,” he says. Another reason, he says, is the large population of people in India who are still not internet savvy. These customers still read newspapers and watch TV, and Variation is targeting this segment very aggressively through advertising.
Customer connect is therefore important at Variation and they are using digital advertising, print and TV to advertise. Mail to catalogues is another medium of reach. Catalogues are distributed by insertion in newspapers and magazines. Vishal says they are also working on a rewards program where a customer can recommend friends and get gift vouchers. For existing customers, catalogues are sent through post on a monthly basis. TV advertising happens through TV shopping network programs.
Women form a majority of Variation customers – housewives, working women, old ladies from Tier 1,2,3 cities who like to buy from the comfort of their homes, says Vishal.
After working in a diamond jewellery export house for five years, Vishal turned entrepreneur with Variation and dreams to make Variation the largest direct selling company in India.Though a college dropout, he worked for five years in merchanding, marketing and direct selling, before setting up Variation. “We are planning to add many new product categories and are working on improving overall customer satisfaction and supply chain management,” he says ambitiously. He remains unfazed by the challenges the business throws up and says he is in the space for the long haul.
While e-tailing and e-commerce are on the upswing in India, not many startups can claim numbers similar to Variation. A hybrid model like what Variation offers is worth looking at.