Bajaj Capital backed Crafusion looks to capitalize on the growing ethnic wear niche
The time for horizontal e-commerce startups is long gone. Too many people have burnt their fingers (and cash) trying to do too many things. For startups niche and vertical is the way to go.
Straightforward right? I wish.
While niche makes it a lot easier to understand and cater to for a specific market, it also involves the risk of operating in a small market. Many a VC will tell you that it is the number one reason why niche e-commerce companies are shot down. And if there is a big enough niche market, there will be enough and more competition.
Ethnic wear is one such niche in eCommerce that is filling up fast with players trying to capitalize on the space in their own different and unique ways, Crafusion is a new entrant trying its hand in the space. This eCommerce venture for handmade ethnic wear was started by Poonam Bajaj, an entrepreneur and fashion designer, in an attempt to conserve the tradition of India as well as to realise the lost trends in fusion wear. She says, “I have a great appreciation for the grassroot level traditions of India and it has always been my endeavour to preserve the culture of the country.”
Backed by Bajaj Capital, Crafusion sells apparel and accessories for men and women. The unique part about the site is that it categorizes its inventory on the basis of designers and artisans, from where they obtain most of the goods. Poonam herself has a design house of her own, The Citrine, which she set up in 2006 to create Indo-western designs. Crafusion aims to bring the works of the artists, and a team of 15 employees at Crafusion put their minds together to bring out unique and modern designs to fore.
Ethnic wear - A growing niche
We think the success of companies like Fabindia have shown that there is a huge market for ethnic wear and accessories in urban India. However, even Fabindia had to diversify into vertical like furniture, and their offline chain contributes to a lot more business than the online portal. A few early stage startups have entered the fashion market completely dependant on ethnic fashion and portals like Craftsvilla are slowly becoming household names. Apart from this, fashion apparel sites have listed ethnic wear in their offering, suggesting that the online buyers of fashion items look for ethnic wear as well. Long story short, this is a growing niche.
However, Crafusion’s designer and artisan approach is interesting. While it breathes life into lost art forms by providing them a channel for sales, Crafusion itself doesn’t maintain an inventory. But such models have shown in the past that they require an extremely efficient supply chain and great partner understanding so as to cut down operation costs.
Being backed by funds from Bajaj Capital might ease the pressure off Crafusion at the moment, but inefficient practices, as with many an e-commerce company, can quickly turn around this advantage. It will be interesting to see how Crafusion fares in the coming months.