How Crea plans to become leader in the $3B brand merchandising segment
Amidst 5000 players, Crea plans to become leader in brand merchandising segment
Brand merchandising is an important part of advertising. It is used as part of guerilla marketing campaigns to promote a company, corporate image, brand, or event, at trade shows, conferences etc. The industry size is around $3 billion, with over 5000 players (an educated guess) catering to the segment. In spite of size, and the number of players catering to the segment, the industry is completely fragmented and unorganized.
Upkar S. Sharma gauged the market, and saw a huge business opportunity in this segment. In 2008, he launched Crea, which caters to the B2B segment, fulfilling companies’ needs in brand merchandising, such as gifts, awards, promotional merchandise, and uniforms.
“We come on board as domain experts, and help companies optimize the merchandising part of their business. Today, we cater to industries like cosmetics, liquor, hotels and fitness, where merchandising elements contribute to revenue and are not just an expense item. Because of this, marketers from these industries tend to take merchandising seriously, and this helps us showcase our abilities,” says Upkar.
What’s new with Crea’s approach?
According to Upkar, entering the segment is quite easy, and doesn’t demand much investment. Owing to the low entry barrier, there are many small players, vendors and catalog-driven websites. Players in this segment are approaching it as a product-led business. However, he claims, Crea offers services, and it has taken an expertise-led approach to business.
“Our conversations are not price-led, but idea-led. It’s tough to operate, but it does ensure our relationships are lasting and operations profitable,” says Upkar.
Growth in company
The venture claims to have grown at a consistent rate of 60% year-on-year for the last five years. It clocked a combined turnover in excess of Rs 15 crore for fiscal year 2014-15 and is expecting and working to cross Rs 25 crore this financial year.
Crea is working with some of the best-known brands in the world - Google, Pernod Ricard, Loreal, Ritz Carlton hotels, Pizza Hut, Vero Moda, Jack Jones and Kohinoor Foods, among others. “We are regularly working with over 25 companies. In all, we have over 400 clients, who work with us from time to time,” says Upkar, Founder, Crea.
Talking about the business model, Upkar says, “We have a fairly straightforward business model. Although we provide the service to clients, from ideation to execution of merchandise, on a turn-key basis, we get paid for what we supply. We are heading towards working on a retainer model.”
Market segment & challenges
The brand merchandising industry, as a whole, is over $3 billion. According to experts, though there are no serious studies available in the segment, there over 5000 players active in this business. However, the sector has some serious structural deficiencies.
“It’s one of those industries that steadfastly refuses to evolve or integrate because there is no consolidation or any effort in that direction. However, we at Crea are working on a model to disrupt it as soon as possible,” says Upkar.
Besides, the venture feels that there are other challenges, beginning with the mindset of all stakeholders, be it people in the merchandising business or clients. “Merchandising is still not taken as seriously as other forms and disciplines of brand building, like advertising and events. I believe change can be brought about by disrupting the market,” Upkar added.
In this market, which is completely unorganized, there are many small players and vendors doing business and raking in money.
Besides, some known names, such as eYantra, Dolphin Displays, and BrandStick, are offering services in brand merchandising.
Companies like eYantra in India have tried to scale up but haven’t been able to make a dent in the universe, in spite of being adequately funded. If you look around, virtually all of Crea’s competitive landscape is populated by vendors with catalog-driven websites.
The venture also faces competition from brands and their institutional sales divisions, gifting websites, and other office products providers.
In the coming years, the competition landscape will change drastically, as international companies with turnovers in excess of $50 million have started looking towards India. This will surely create a stir the market, but will also help to organize the scattered segment.