In recent times, Indian e-commerce industry has become the new darling of venture investing with over $1.7 billion invested in Indian startups in the first quarter of 2015 alone and about 47% of it was invested in e-commerce, including Alibaba’s entry into India through their $575 million PayTM investment.
The surge in lifestyle digitization in Indian metros and the growth of smartphone usage across the economic gamut has made globally known venture investors like Tiger Global, SoftBank, DST Global, Alipay, Naspers, Rocket Internet and others to have a close eye on this burgeoning sector and most of them have already jumped in with investments to get a piece of the ongoing action.
Even with all the buzz and splurge of cash in the e-commerce space, globally e-commerce contributes to only 5-6% of the total worldwide retail sales. According to eMarketer's report,
Worldwide retail sales touched $22.5 trillion in 2014 and e-commerce contributed about $1.3 trillion of it, that's about 5-6% of over all pie.
And in India, e-commerce contributes to a much lesser percentage of 1-2% of total $600 billion overall retail sales as of 2014. So, there is a huge opportunity to support and empower the remaining 98% of the market formed by the offline brick and mortar retailers - to help them understand their customers better, to optimize their sales channels for better revenues and enhance their inventory efficiency to reduce expense and create profitability.
Fashalot, a new omni-commerce startup, is trying to do exactly this. Imagine you are waiting for a friend at a coffee shop or riding in a cab or metro and browsing the internet for the latest trends in fashion clothing. While browsing you like a new shirt - typically you would pin a thought to check-out the shirt at a mall or store next time when you are shopping or you would go to an e-commerce service provider and see if the same shirt is available to order online. But even while ordering online, you are still unsure on the size, shade, texture and how comfortable the fitting will be. Now imagine the same with a service like Fashalot which can help you identify shops near you where you can right away go see the shirt, feel it, try it and if satisfied buy it!
Bridging the online-offline divide
Fashalot, which aims to provide such an experience, is a horizontal technology platform that connects shoppers and retailers to increase foot traffic and engagement at stores. Through their unique mobile app shoppers can discover the finest labels in apparel, footwear and accessories available at stores at their nearest locations. Fashalot effortlessly blends the virtual and real world shopping experience and provides users a chance to select what to buy in a few simple swipes on their phone, while retaining the ‘real’ shopping satisfaction of feeling the product by going to the store and trying it before buying.
On the retailer’s front – storeowners can expect incremental and repeat foot traffic from Fashalot that will not only increase conversion and sales but also increase the share of wallet from existing customers. It further facilitates the retailers to showcase their entire collection rather than a few limited products online, and also provides opportunity to cross-sell and up-sell products when the customer is at the store.
Founded by the trio - Amit Koshal, Rishi Batra and Amit Sharma, the team has a good contextual combination of digital business, investment and technology experience and has previously worked at senior management positions at large multinationals with cumulative experience of over 40 years. Fashalot is beginning its journey by launching first in Delhi and Bangalore, and has already signed-up with multiple brands and retailers like, Meena Bazaar, Sabhyata, Private Lives, Delco, Arjay Agencies, Emdee Apparels (which have franchisees of brands like Levis, UCB, PN Rao, Planet Fashion, Van Heusen, Louis Philippe) and also many stand alone shops with a cumulative retail sales turnover of about INR 3,000 crores.
Speaking on the launch, Amit Koshal says, “Online is a great success story and has made shopping convenient for people. Even with a small percentage (less than 2.0%) of the total retail industry e-commerce with steep growth (upwards of 70%) has cannibalized revenues of brick and mortar retailers. This has materialized largely due to discounts offered by the online sites. Further, offline retail in India is very un-structured and technology can be an enabler to open multiple new avenues for its growth.
Aiming at the remaining 98% of the retail market, Fashalot with its location based horizontal network effect platform will ensure not only creating retailers digital presence but will also solve the mobile piece of the Omni-channel strategy – both yielding to incremental and repeat foot traffic. For customers it makes even more sense as they get to see all the offline stores and their products on their phone in one app, Fashalot, before getting on the road.”
Amit and his team have already been successful in raising seed capital at pre-revenue stage from a few angels and they have been working on the concept and product road map from July 2014. Amit shares that initially they started with an aim to help retailers compete better with online shopping and now the platform has the potential to transform into something much bigger – providing convenience and reimagining on how consumers shop for fashion from stores.
With a 12-member team, they have built a scalable and advanced backend which can on-board multiple stores at one go in minutes. In the next six-12 months, they aim to be available in top metros with over one million users and retail penetration of over 2.5%.
Fashalot is a two-sided network and service provided to end consumers will be completely free. The team is looking at different revenue generation model with retailers with focused approach towards providing them with new customers and helping them understand their existing customers better and thus providing very good Return on Investment (ROI).
Be it online or offline (in-store) shopping, people have started using smartphones as their new personal shopping assistant.
Fashalot wants to build on this behavioral adoption and help consumers find the best products and prices available in stores nearby and their technology platform will enable a self-serve model for retailers to on-board themselves on Fashalot with their product and inventory information and can update it on the fly.
In the future, they want to launch User and Usage Analytics for partner brands to make informed decision on their products and stores with option of hyper local marketing.
Google mentions that 10–18% of all clicks on its search ads resulted in an in-store visit within 30 days. Omni-channel shopper is an emerging reality and brands are trying to embrace omni-channel strategy that requires a lot of commitment to organization change, understanding of customers and their engagement especially through mobile.
Fashalot wants to help create an easy and scalable solution to fill this need and enhance the satisfaction of doing business both on the consumer and retailer side.