Here’s how this premium performance activewear brand is carving a niche in the fitness market
, a premium activewear brand for athletes, was started by entrepreneurs Krishna Chandak and Ashish Naik in 2016.
According to the founders, it was born out of the need for a good workout gear they could not find. Hence, the duo set out to create products that would make a difference to their workouts.
“We always wanted to do something together. I stumbled across a specific problem, and he happened to know the solution for it,” says Krishna, referring to his co-founder’s textile science and engineering background.
The co-founders started by selling gym towels, which they say went on to become an instant hit and a must have for athletes.
Apart from towels, the Mumbai-based startup sells apparels, yoga mats, socks, and sports accessories like water bottles and jump ropes.
L -R - Krishna Chandak and Ashish Nail
After spending eight years in the US, Krishna returned to India in 2011 and found it difficult to procure a good gym towel. He discussed this with his friend Ashish, and they decided to join together to start manufacturing gym towels.
“When we started the company, there was no grand plan. We were just going to solve a specific problem, and we started with a simple pain point. It took us a year to start up,” says Krishna, who has an MBA from Philadelphia University and worked with KPMG Advisory in New York for over five years.
In 2016, TEGO launched its products in the market through PlanetSports, a multi-brand sports and lifestyle specialty retail chain of Future Retail. After trials in about 10 stores and showcasing at PlanetSports for a year, the products were made available on Amazon and other ecommerce stores.
“Even if we had no grand plan about what we were going to create, we understood this consumer segment and knew this was going to grow,” Krishna adds.
The company eventually added B2B clients like TAJ / Indian Hotels, ICICI Lombard, KPMG, SOHO House Mumbai, and sports associations such as MSLTA (TATA Open Maharashtra) and PROCAM (TATA Mumbai Marathon Towels).
The startup has also partnered with sports federations and sports properties across India [HCL Squash Open – PSA Tour; TATA Maharashtra Open - ATP; and TATA Mumbai Marathon 2018].
The product and USP
According to the co-founders, TEGO’s products stand apart for its materials that allow it to increase its functionality.
“Activewear is a huge category. There is performance and then there is athleisure. It is a $9 billion industry in India, and estimated to grow to $25 billion in the next five years. So, you must find your niche within this category and build the supply chain around it as well,” explains Krishna.
TEGO designs its products in-house and works with technology partners to ensure each product has a unique feature. For instance, the company says that its antimicrobial feature is unique, besides a performance cotton t-shirt that dries 2X faster than regular cotton t-shirts, and a towel that wipes away sweat faster and also reduces the threat of germs at gyms due to the antimicrobial feature.
“For every category that we’re in, we’d like to say that for that given price point, we're probably best-in-class for that product,” says Krishna.
The accessories are priced in the range of Rs 1,000 to 3,500, with its Workout Mat costing Rs 3,500.
TEGO’s suppliers are mostly outside India, with certain cotton-based products made in India. The company identifies the manufacturer / supplier from across the globe and claims to be using strict quality control specifications and benchmarks while sourcing with the help of global network of experts to ensure consistent product quality and experience.
“This is also the end goal for TEGO – to near-shore /re-shore production as much as possible. This is inevitable as we become a major player in the Indian market,” says Krishna.
“Although our first preference is to manufacture locally, if product development is not possible within India, we end up working with factories globally,” he adds.
During the pandemic, although the startup was able to scale and gain resonance, it faced supply chain issues for materials and products.
“Since then, we have de-risked by expanding our supply chain and identifying partners in India for certain growth categories,” adds Krishna.
The startup currently competes withSports and Playfiks in the premium performance space.
TEGO's Bottle and Towel
Relaunch and growth during the pandemic
The team decided to relaunch and revamp TEGO into a D2C brand during the pandemic. It also launched men’s apparel such as seamless summit t-shirts, performance boxers, and core shorts on the website.
With this, the brand claims to have witnessed 2X growth through the pandemic, and claims to have sold about 2,50,000 products, with a 14-member team, which includes four designers.
According to the Krishna, “We operate in a highly capital and resource efficient manner – core functions such as product conceptualisation, inventory/ ecommerce management, marketing and finance are done in-house, while senior talent for design, creative, and other support functions are outsourced to both local and global experts.”
According to the company, it is maintaining gross margins at 55-60 percent and strong unit economics, both in offline and online channels.
“Given that we have been a premium brand, we have witnessed strong unit economics since our launch. We have consciously chosen to invest in R&D, product design, and quality over short term profitability over the last few years.
Basis our projections, we anticipate to break-even operationally in the next financial year,” says Krishna.
The startup used a marketing strategy that was a combination of content, quality storytelling, and growth marketing within the overall arch of brand building through its various digital channels. Some of its approaches were to keep the customer acquisition cost low, and mostly retaining the existing customers, reaching new customers through word-of-mouth, and having a multi-channel approach.
The company also displays its products at fitness studios and gyms, which aids in product discovery and that translates to purchase.
The business and plans ahead
The co-founders invested their personal money to start the business in 2016. The startup also raised $600,000 in seed fund the same year, but the team refused to reveal details of the investor.
Speaking about future investments, Krishna says, “Given the growth we have seen over the last few years and the strong tailwinds for fitness and wellness post the pandemic, we are looking for the right institutional or strategic investor who can help us grow even faster.”
TEGO claims to be serving 500 cities across India, and caters to around 2,500 pin codes.
The company has tested overseas markets such as the USA, the UAE, and Australia through Amazon. It has also executed export orders with sporting goods stores.
“We are still evaluating these and our primary focus remains the Indian consumer in near-term,” Krishna adds. “We do not see opening our own retail formats for the next 18 months.”
He says the company is building a business model that is digital-at-core as it believes it is important to have the support of strategic touch-points to scale sustainably and build a balanced brand.