Indian e-commerce's best kept secretMeeta Malhotra
How do you make sure an important story is heard even though there are no ‘masala’ ingredients in it? No maverick, tantrum-throwing founder, no wicked VCs, no mega-funding, no mass layoffs. The absence of these elements is precisely what makes Voonik’s story so noteworthy. In a confusing world where the mantra for building a business changes every morning, Voonik has created a solid company from scratch in a fiercely competitive market, quietly and efficiently. Every hopeful entrepreneur should take heart from this story.
This data from AppAnnie, the industry gold standard for app data, will come as a shock to most readers.
‘From the week of January 3rd to the week of January 10th, Voonik was the fastest growing android phone shopping app in India by active users, behind Paytm, Flipkart and Amazon.’
That’s right, the fastest growing shopping app overall. Despite the fact that Voonik only sells fashion, as compared to the thousands of categories the other three Goliaths offer.
In 2015, Voonik grew by more than 2200 % and app repeat purchase rate doubled. Voonik has more than 4 Million app downloads and another 2.5 Million unique users across mobile web and desktop.
Whenever I say Voonik is one of the companies I have invested in and mentor, the reaction I typically get is ‘Voo-who?’ In fact, that was pretty much what I said when I heard of the company in January 2014.
Sometime in late 2013, I had a conversation with Bharati Jacob of Seedfund about how online shopping was becoming more frustrating as sites and SKUs proliferated. ‘You really need a better recommendation engine for fashion’, I remember saying, ‘much more like a personal shopper’. A couple of weeks later, Bharati called me. ‘There’s a young team that’s building an online personal shopper’, she said, ‘You should meet them. They’re called Voonik.’ Bharati had decided to invest in Voonik and I respect her judgment immensely. When I met Sujayath and Navaneetha, Voonik’s founders, however, I have to admit I was taken aback. They were the archetypal techies, shy and soft-spoken – they didn’t look anything like the founders of a fashion site.
Looking back now, I can put my finger on the exact moment I wanted to be part of Voonik’s journey. Perhaps Sujayath had sensed my discomfort, because he got up and drew two circles on the white board in front of us. ‘We need two things to build the next generation of ecommerce platforms’, he said, ‘the first is technology and the second is data’. We are very good at both’. He drew a bigger circle around the first two. ‘And we are going to use these two to create an offering that has massive impact – something that every online shopper can use easily.’
Mass can be classy online
Sujayath knew what he was talking about. He had spent 7 years with Amazon as Product Manager followed by a stint as Vice President, Visa. ‘Fashion requires a different experience’ he would say. ‘Imagine you are shopping on a hot, crowded dirty street. You don’t mind buying groceries or books there, but when you are shopping for fashion you want to be in a pleasant, air-conditioned environment. In the offline world, that environment is the preserve of expensive brands in malls. But online that does not need to be the case. Similarly, personal shoppers who pick clothes that suit you are only offered by luxury, offline stores. But technology allows you to replicate that experience online at scale.’
Sure enough, Voonik set out to create that environment. Part of the original Freshdesk team, Sujayath’s co-founder Navaneetha was the right person to bring their vision to life. Sujayath and Navaneetha used their formidable technological lineage to create a platform that crunched data from multiple vendors and even other marketplaces to deliver an ‘insanely relevant feed’ to users. Customers started to talk about the addictive nature of the feed, describing how they would keep endlessly browsing through gorgeous-looking product images that seemed to be exactly what they were looking for. They would never realize, of course, that the platform learned more about them as they browsed, plotting them in a massive graph of variables like trends, bodyshapes, skin colours and lifestyles. Artificial intelligence may be a buzzword today but it was an integral part of Voonik’s platform from the beginning.
Let’s try it
Through this phase, Voonik benefitted greatly from its founders’ contrarian attitude. Sujayath and Navaneetha questioned every norm and refused to do something just because everyone else was doing it. They did this in their own quiet way, without ever being confrontational.
While building the team, they hired bright freshers with very little experience, giving them a free hand to experiment and learn. Sometimes I would find this attitude frustrating. I would point out that a certain marketing initiative was bound to fail. Sujayath would listen politely and then allow the team to try it anyway. This open, fear-free culture has proved to be one of the company’s biggest strengths. For instance, Voonik has built one of the industry’s most efficient digital marketing engines, constantly driving down costs and fine-tuning performance. Their lean, agile marketing team did this by ignoring established rules and just learning by doing.
One thing at a time
Voonik has always gone deep into everything they take on, focusing with great intensity on the problem at hand. The move to go app-first is a case in point. Voonik was quick to spot the advantages that the app was offering – lower costs and an even more personalized experience. The team decided to concentrate all its resources behind their android app in August 2014, much before Myntra’s much-publicized move. They kept the desktop functioning on a shoe-string budget, revamping it only in August 2015, when they felt they had the bandwidth to do it justice.
Staying women-only and resisting the temptation to address the larger menswear market is another example. The opportunity presented itself several times but the team was unanimous that any distraction would be detrimental.
While Voonik continued to gain traction, it was also getting harder to keep pace with escalating customer acquisition costs. This is a particularly troublesome phase for a young company. Raising money requires that you focus all your time and energy on investor interactions at a time when your business needs you most. This is probably the area where Voonik was weakest. The song and dance with investors was not something either Sujayath or Navaneetha enjoyed. I remember one investor saying that if ‘Kunal Bahl had your numbers, he would be asking for ten times the money’.
Another problem was that the ‘Voo-who’ problem hadn’t really gone away. The sad but irrefutable truth is that investors and media are influenced by two kinds of reality: the ‘objective’ reality proven by hard numbers and metrics and the ‘subjective’ reality created by brand buzz and storytelling. Voonik had two challenges: Firstly, they had spent no energy on building this subjective reality and secondly, there was no firm in USA or China whose model they had duplicated. This lack of precedence seemed to bother investors. Despite scaling rapidly and having a platform that consumers loved, Voonik wasn’t seen as ‘hot property’.
It must have been demotivating for the team to see firms with weak fundamentals skim millions of dollars from a frothy market, but Voonik finally had the last laugh. They raised Series A of US$5 million from that most blue-chip investor – Sequoia Capital. Investor interest in Voonik immediately escalated and the phone started ringing off the hook, but Sujayath and Navaneetha had understood that they needed to build wider brand awareness.
It was time to sharply articulate Voonik’s purpose so its message could be amplified. ‘We are a destination for the real woman. Real women juggle many things, they don’t have perfect bodies and they need to balance budgets. We will make it possible for them to be stylish everyday’. The team was unanimous that this was excited them.
Sujayath then approached the brand awareness problem in his trademark, thoughtful style. ‘What’s the best solution for this and how do we create maximum impact in minimum time?’ he asked. Part of the answer lay in a TV campaign launched by Farah Khan exhorting women to‘har din fashion karo and imagine that life was a film-set’. Consumers poured in and stayed to buy and engage. Within a week of the campaign, traffic to Voonik had doubled and on 16th January, Voonik moved up to the No 3 free Android shopping app in the Google playstore, just behind Flipkart and Amazon.
Close to two decades ago, I witnessed another unique company being created by a group of bright, principled, bold, young men who were determined not to be slaves to the status quo. That company was called Infosys and they changed the way that the world perceived India – not just because of what they did but also because of how they did it. I have every reason to believe that Voonik will do the same.