‘Fashionandyou ships close to 6K orders daily with double digit growth on monthly basis’, CEO Aasheesh
Founded in 2010, Fashionandyou is one of the earlier evangelizers of flash sales model in India. The Gurgaon-based company was embroiled in controversies over the past couple of years because of Urbantouch’s acquisition, consolidation and lack of leadership at top. However, the Smile group backed ventured bounced back under the leadership of Aasheesh Mediratta and raised $10 million in its Series D round of funding from Sequoia Capital, and Norwest Venture Partners among others.
According to CEO Aasheesh, Fashionandyou (FnU) has been doing 5,500-6,000 orders on a daily basis with double digit growth monthly. With its Series D round FnU has been making investments in developing sourcing & distribution centers across India to cut the delivery time lines for the customer. Besides Gurgaon, the company has established a fulfillment centre in Surat and is looking to have a set-up in Mumbai and Bangalore by the end of the current financial year.
To track FnU’s growth and its journey so far, YourStory caught up with Aasheesh. Below are edited excerpts from the interview.
YS: Tell us about Fashionandyou's growth in 2014.
Aashesh: After consolidation of the business last year, it has been witnessing double digit growth month on month this year. We are currently averaging GMV of $4 million per month.
YS: Give some sense about FnU’s Series D funding. Are you in talks to raise some more funds?
Aasheesh: The current funds are being directed towards revamping IT infrastructure, marketing investments to acquire more customers and increase brand visibility and much needed infrastructure around sourcing and distribution hubs.
We are in amidst of rolling our new web shop followed by our own app, the online marketing spends being increased; we are already considering rolling out some key offline brand building initiatives as well. Mass media/ TVC are also not being ruled out in the near future.
Since we don’t buy inventory and our model is flash sales, we are making due investments in developing sourcing and distribution centers across India to cut the delivery time lines for the customer. Post Gurgaon, we have opened Surat, which is operational now. Come October, we are looking at Mumbai followed by Bangalore by the end of this calendar year.
YS: Give some data points like number of orders shipped by FnU on monthly basis and average transaction size.
Aasheesh: Currently we are averaging 5500-6000 unit order transactions per day, and on target with our plan to be 10,000 orders per day by end of this financial year (by March 2015).
YS: Which categories contribute maximum sale? FnU is pioneer of flash sales in India. How is it performing at the moment?
Aasheesh: Fashion apparel accounts for more than half of our total sales (including ethnic wear), followed by fashion accessories, footwear and home & living.
Flash sales account for 90% of the business whereas rest 10% comes for thematic & experience stores.
YS: FnU used to be a leader in fashion category but now this space is dominated by Myntra and Jabong. Where do you see FnU in this race now?
Aasheesh: There are three models which co-exist in other countries including the US & China. India being no different and it’s just matter of time, you will see a clear demarcation. With reference to Indian e-commerce market, marketplace model is well represented by Amazon, Snapdeal & Flipkart with the latter being a hybrid, including catalogue players like Jabong & Myntra.
We clearly represent and are leaders in flash sales. Our model stands for fashion, freshness & value. Our focus stays on daily offering of 15-20 selected & curated sales across international brands, designer labels, differentiated and in trend fashion accessories, footwear, unique & quirky offering in home & living at great discounts.
We are an ‘off-price player’ and have been the same forever. The current price war and Indian customer’s love for discounts only suggests and establishes the point that we were and are in the right business model, whereby we have an opportunity to reach out to the customer on a daily basis ‘something new’ and ‘great discounts’ every day.
In fact, it’s up to the catalogue players to work on their positioning on the pretext of being labeled as discount players, which they are essentially not designed to be; as the catalogue model was supposed to offer fresh & in season merchandise and not previous season’s.
YS: We see FnU has been cutting marketing spend significantly (source: Comscore and Alexa) over the past one year and so. What's the thought process behind this move?
Aasheesh: We were in a consolidation phase and had challenges which were unique to our organisation. Now since we have overcome that difficult phase, we are focused on growth, and current numbers are testimonial to the fact that we are rightfully back in the game. The recovery and consolidation phase last year has helped us figure out the distinguishing needs, behavior and consumption patterns of our customers even better, and the current offering has been customized accordingly.
A customer relates to us for the ‘great brands, great designs at great discounts’ with daily new sales. That’s what our promise is and we will stand to deliver it.
Our investments in marketing accordingly are on the rise; and the same is not only to acquire more customers but to build FnU as a more cohesive brand. The only area which we need to immediately fix is our delivery time lines and that too with the opening of two more sourcing and distribution centers, we will have 80% of the merchandise shipped as part of our express sales; shipped same day (currently at 40%), rest being international offerings which customers are willing to wait for.
YS: What is the status as far as break-even and profitability is concerned?
Aasheesh: We probably are among the few companies which have double digit contribution margin and we believe that we are on the path to breakeven in the next couple of years at 3-4X of the current business. After that we will take a call whether we should continue aggressive investments in marketing or chase profitability.