High Street Essentials to invest Rs 8 crore on expansion, tap international markets for growth
In 2011, supply chain specialist Shivani Poddar and brand manager Tanvi Malik spotted a gap in the womenswear market. There were few options for globally trendy styles for Indian women at affordable prices – a realisation which led the pair, who between them held experience from top-tier fashion and consumer groups including Titan and Hindustan Unilever, to launch High Street Essentials, an online destination for branded women’s fashion, from ethnic fusion wear to western wear.
Eight years in, the gamble has paid off, with HSE now a profitable company. The group, which owns popular fashion brands like Faballey, Indya and Curve, plans to invest around Rs 8 crore ($1.1 million) this year to take its exclusive brand outlet count from 16 to 40 in the country. With Rs 60 crore already in the pocket after receiving funding from investor SAIF Partners in December 2018, HSE is also looking to expand its footprint in the international markets.
It has recently launched its brands on Amazon U.S. and UK websites to tap the international markets and is also in talks with retailers to strengthen its international network to cater to the non-resident Indian audience.
Here, in conversation with FashionNetwork.com, the executive duo talk about their expansion plans, e-commerce strategy, plans for the diversification of the HSE product portfolio, and what it takes to get investors to fund a start-up.
FashionNetwork.com: How has the journey of HSE been so far? Give us a brief on the growth of the company over the years.
Shivani Poddar: In 2011, we were both working in corporate fields with promising careers spread out before us. A stray conversation where we bemoaned the lack of affordable, globally trendy fashion in the country for women gave us the idea of starting FabAlley, and later Indya.
At each point in our entrepreneurial journey, we have kept the modern Indian woman and her unique needs as the fulcrum of our products and brands, and this has led to the inception of not only FabAlley but Indya – our indo-western fusion brand and Curve – FabAlley’s plus-sized sub-brand. We have a fluid omni-channel model wherein we provide tech-enabled solutions in our offline stores and sizing and fitting, along with personalized recommendations on our website, thereby capitalizing on the strengths of both models while mitigating their shortcomings. No other womenswear brand in India is able to blend the two channels as seamlessly as us.
FNW: What is the expansion plan for HSE? How many stores have been planned for all your brands and what investment has been earmarked for it?
Tanvi Malik: Indya is an omnichannel brand and we have 16 brand-owned stores, which were launched in the last 12 months. These EBOs are pan-India and today we have a presence in Delhi, Bombay, Bangalore, Pune, Ludhiana and many more cities. We plan to take this number up to about 40 stores until the end of this year. We’re also present in large format stores like Central, Globus, Ethnicity and we’ve recently launched in Lifestyle. We plan to spend about 6-8 crore on store expansions in the next 12-18 months.
FNW: What is your strategy for international expansion? Which new international markets are you exploring for growth?
SP: Our strategy for international expansion is two-pronged – online and offline. In terms of the online market - our website currently delivers to approximately 25 countries apart from India. About 35-40% of our orders on Houseofindya.com are from countries such as Canada, U.S., UK, UAE, and Saudi Arabia. The plan is to divert more marketing spend over the next few months to these countries and cater to the large NRI base in these countries. We have also recently launched with Amazon U.S. and UK, which will definitely help us scale further.
In terms of offline, we are currently working with a few re-sellers based out of Mauritius, Dubai and Sri Lanka. We are exploring further like-minded partners and are planning to add 3-4 more key international accounts during the upcoming fiscal.
FNW: The company has successfully managed to raise funds over the years especially at a time when many others are struggling to get investors. What do you think has worked in your favour and how difficult is it to make investors believe in the long-term vision of the company?
TM: Investors are no longer looking at just a company’s scale and top line; they are keener to invest in companies that are capital efficient and profitable or with a clear road to profitability charted out over the next few years. We broke even in the last financial year and are continuing to grow our bottom-line in an industry where very few companies of our scale are profitable, making us a foundationally strong business to invest in.
In addition to that, if you have a sound business model and an established product market fit, there is enough money in the market to fund your start up. We bootstrapped the company for about 18 months to understand our customers and develop relevant products before raising funds and since the product-market fit has already been established, we faced no issues with conveying our detailed expansion vision to our investors with conviction.
FNW: How has the response been to your plus-size brand Curve since its launch and what’s your overall view on the plus-size market?
SP: With Curve, we have tapped into the burgeoning plus-sized market, which is currently highly under-serviced with too few brands providing too little versatility in terms of design and trend-centricity. The womenswear plus-size market size stands at Rs 1500 crore ($210 million) and provides a huge opportunity for trend-centric brands such as Curve to occupy a position of leadership. At this point in time, there are not enough Indian brands catering to this section of the market and Curve has sparked a fashion revolution for women previously overlooked by runway-inspired mainstream brands.
FNW: Do you feel the recent changes to the e-commerce rules in India will help fashion firms like HSE grow and create a level playing field ending the dominance of the e-commerce biggies in India?
TM: The recent changes will definitely help the online fashion industry as a whole because rampant and deep discounting will become more restrained, which will help vertical players such as HSE to grow further.
FNW: HSE had plans to expand its product portfolio. What is the status on the same and what new products/categories can be expected from HSE in the near future?
SP: For FabAlley, our focus is on product innovation with a premium line and expansion of our plus-sized line Curve. We also plan to foray into sizeable niches such as Athleisure and Workwear. In terms of the product portfolio for Indya, designer and influencer collaborations are on the cards for us.
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