Retailer media caught up with the co-founder of Fashalot, Rishi Batra, who revealed how pivoting your business idea requires mad conviction to get through!
Fashion and lifestyle collectively is a USD-100-billion industry in India. 99 per cent of retail market is offline and only 1 per cent is online, making it a huge play for O2O businesses like Fashalot. The smart phone penetration, especially in the metros, has changed the landscape in the favour of O2O companies. Research suggests that 86 per cent of consumers start their journey in one channel and end up in a different one and, to add to that, 55 per cent are inclined to purchase in-store when offers are made available on mobile.
Fashalot earlier started as a product discovery platform that allowed users to search fashion products nearby and also provided exclusive discounts. “That idea came from our daily lives on how most of the time we are constantly struggling when we think of shopping offline – product availability, offers at stores, and so on and clearly saw the need for structuring this large un-structured market with technology as an enabler,” said one of its founders, Rishi Batra. However, within five months of business the company generated a lot of user and retailer data on their behaviour and preferences. “We realised that more than product availability, users were searching and visiting stores due to store level offers, exclusive offers and cash back,” Rishi added.
The team, formed by three co-founders Amit Koshal, Amit Sharma and Rishi Batra, who together brought over 40 years of collective industry experience in mobile, digital, tech, retail and investments, then launched the new avatar of Fashalot on January 2016 with focus on store discovery, brand visibility, offer discovery and launched F-Cash, Fashalot cash-back that a shopper can use for lifestyle purchases like – recharge, movie vouchers, restaurant, grocery buying and so on.
Both the market and medium support for a big play. Fashalot will be ramping up in new cities by the end of this fiscal, says one of its founders, Rishi Batra. Potentially, Fashalot will be live in approximately 15 cities of the country in the next 2 years.
Varied Revenue Models
Fashalot has varied revenue models that the brand is comfortable with. “Currently, we have mix of pay-outs based on walk-ins to store, revenue share, subscription and advertising. We believe is that store walk-ins and transactions are the most scalable one and contribute to nearly 90 per cent of our partnerships,” revealed Batra.
The portal went live in April 2015 as a product discovery mobile platform in Delhi and shortly added Bengaluru and NCR cities. The new avatar of Fashalot was launched in January 2016. Fashalot has a founding team with cross-functional skillsets and is delighting shoppers with its compelling product. The team has demonstrated amazing week-on-week growth across key metrics like customer engagement, traction and retention, and large repeatable transaction value. The opportunity has tremendous potential and is already making a positive impact to fast growing retail sector in the country.
Target Customer, Brands and Regional Retailers
“People between 18-35 years of age and from the retailer’s side, all fashion retail outlets excluding mom-and-pop stores,” said Batra. In India, the retail market is distributed – 50 per cent is mom-and-pop shops, 35 per cent is regional retailers and 15 per cent is brands. “Fashalot focuses on everyone apart from mom-and-pop stores today. The current distribution on our platform is 60:40 – Brands:Regional Retailers,” Batra said explaining the brand’s current distribution in the brick-and-mortar space.
Pivoting is never easy, but better to fail and get right back up!
“Hiring the team was one of the challenges we grappled with at the initial stage of launching our business. Changing the product was another big challenge – as co-founders it is hard to believe that the product that you built is not getting user adoption, but we failed fast and learnt faster. We had to restart from the scratch and it turned out to be the model having very high adoption and strong customer engagement,” opined Batra.
Fostering 2 lakh (plus) store walk-ins in 2016
“The pre-series A round led by YourNest and Rajul Garg has given us amazing mentors, great push and confidence. We are investing this capital in our product, acquiring top talent and opening new markets,” Batra said. In the near future, you will see Fashalot leading the creation of new ecosystem for both shoppers and brands with real time offers, proximity-based technology and innovative marketing features for brands and retailers. In the next six months, Batra claims Fashalot will reach to 10x levels from current levels of fostering 2 lakh (plus) store walk-ins at partner stores with positive unit economics and a strong business.