Growing steadily for the past four years with over 5,000 orders a month, Gurugram-based ecommerce startup PostFold wants to offer affordable casual workwear to its customers.Sindhu Kashyap
It has been a long day at work, and you also need to show up for a dinner party at the end of it. But you stop and wonder if your wrinkled slacks are party-appropriate, because you just don't have the time to head home to change. Dressing you up for post-work activities is PostFold, a fashion ecommerce startup that brings the ease of going ‘from desk to dinner’ with its trendy casual workwear for men and women.
The company was started in November 2015 by Ashish Gurnani and Aashray Thatai, who studied together in Northeastern University, Boston. “When we moved back from the US, we never had the intention of starting PostFold. But we noticed that India had a major gap in the market compared to the US where brands give outfits that could double up as both formal and dinner wear,” says Ashish.
And Gurugram-based PostFold has been bootstrapping and growing steadily for the past four years. According to the Registrar of Companies (RoC) data, PostFold had a revenue of Rs 7.76 lakh in FY 2015-2016, and the next year it shot to Rs 48.29 lakh, and Rs 1.06 crore in FY 2017-18.
Within a year, PostFold showed a whopping 522 percent rise in revenue, and 119 percent rise in revenue the following year, and its loss narrowed by 182 percent. As of November 2018, the team claimed to be doing over 5,000 orders in a month, with close to 200 orders a day. The average gross merchandise value (GMV) is Rs 1,500 per order.
Ashish notes the big need for a shift in the formal wear market for young professionals, especially men. “A lot of millennials need a story behind their purchase, a cause that they want to get behind,” he adds.
During the market research stage, the founders realised that the existing online marketplaces don’t have the best of quality, and they also do not provide custom-made service. “The big brands are priced high. They sell their products at least 10 times the price it costs them to make,” Aashray says.
Moreover, the duo felt it was cheaper to begin online.
Once the founders decided to venture into fashion ecommerce, they approached Aashray’s family, which owns a textile business, to understand clothing. “I wanted to understand the different aspects of the business – the patterns, how fabrics are made, and how one can differentiate between good and bad quality stitching,” says Ashish.
The founder took these learning and hunkered down to set up PostFold. Currently, the startup has over 15 categories with more than 120 styles. The company has more than 400 SKUs (stock keeping units) live on its website, at an average price range of Rs 1,200 to Rs 1,700.
To this day, PostFold is bootstrapped, but the beginning was not easy. “I thought starting a business would be the biggest hurdle. I assumed everyone will go online and start purchasing. We launched in November 2015, and our first order came in December that year. We had to spread the word and ensure people heard of PostFold,” says Ashish.
The founders say the biggest validation is when a customer repeatedly orders from the site. “We have close to a 40 percent repeat customer rate,” adds Ashish.
They initially piloted with about 100 orders with just family and friends. This helped them identify their weak points – missing size charts, wrong descriptions, confusion on payments at delivery time, etc – and fix them at the testing phase itself.
Initially, the cart abandonment rate was 15 to 16 percent; but later it reduced to five to seven percent. The team says they could achieve this by studying the entire funnel – customer, ecommerce and analytics.
“We had a multi-step process at that time. Then, we realised that some people were dropping off during the payment process itself, changing their mind in those eight to nine seconds. Now we have a single page divided into compartments, with the payment option on the side,” says Ashish.
PostFold launched with clothing, designed by the founders themselves, in basic and neutral colours that could be worn year-round. The startup opted for clean cuts and design, and styles that championed subtlety and sophistication. After the first collection was released, they hired a fashion designer from NIFT as their first employee. Today, they are a team of 50.
The next challenge was getting the product calendar right. “At the time, we had not planned in advance. Though we needed to launch a new product line every 10 weeks, we were taking 15 to 16 weeks initially,” says Aashray.
PostFold reduced cash burn by conducting a detailed market study. It focussed on understanding the cost per product, and adjusting the selling price accordingly to create a sustainable business.
Added costs also come in from sourcing and managing the middlemen, along with wholesale prices and distributor margins. In the process, the cost of the product goes up 6x-7x by the time it reaches the customer.
PostFold’s goal is to eliminate as many middlemen as possible. “We have an in-house sourcing team that takes care of all the fabric, thread, and button sourcing,” says Ashish.
PostFold outsources its manufacturing to Aashray’s family business at present. “This is one of our biggest competitive advantages as it has made it easy for us to identify partners and getting the right places for sourcing the fabrics,” Aashray explains.
PostFold also manages end-to-end operations, helping the startup keep a check on quality and cut costs. This has also ensured garments are ethically produced, as every process can be audited, which has resulted in monthly revenues going up by almost 35 percent.
The niche ecommerce space is fast growing. Brands such as Threads & Sol, Jaypore, and Tjori are fast growing in the apparel space. While larger marketplaces are focussed on GMV, the smaller players are looking at sustainable growth.
K Ganesh, serial entrepreneur, and Partner at GrowthStory, believes this is not a winner-takes-it-all market, and there is space for three-to-four differentiated marketplaces.
In an earlier interaction with YourStory, he had said, “Customer interest is very high, so demand isn’t an issue. Companies that use technology to connect buyers and sellers will do well. Their overall GMV or sales will not match that of an Amazon or a Flipkart, but that does not mean these will be small players.”
PostFold is now looking to expand internationally, and is live on Amazon Prime in the US, and has tested initial bunch of orders in the UK and Australia.
“We had to comply with the US regulations - like FDI approval of our tags, labels, products, custom clearance, review of the directors, etc. This is an exhaustive process that took us about six to 10 months. We have tied up with a logistics company (Transworld, in the US) for pick-up and delivery. Then Amazon distributes it. This takes three-to-four weeks. Sometimes, Amazon splits the freight with us if they want it within 2-3 days,” says Ashish.
PostFold has also launched its first physical store in South-Delhi.