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Craftsvilla - Innovative Marketing Practices


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Craftsvilla's frugal marketing practices through E-Commerce

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Craftsvilla - Innovative Marketing Practices

  1. 1. VISMAY SOURAV Smart Marketing with Craftsvilla C H A O T I C S
  2. 2. Craftsvilla: A unique Venture Key takeaway: One of the largest online stores sells a saree every two minutes and a pair of shoes every 30 seconds “A road trip to Kutch made possible a $400 million start-up, Craftsvilla!” Overview Road-trip to Kutch (Monika & Manoj Gupta) Craftsvilla: Marketplace& Private label (2011) Aggregating 12000 artisans (giving tech- support) A leaner team: low costs Fresh Funding: Sequoia, Lightspeed and Nexus •Branded Wear •$1.2 trillion market •Online - growing •Unbranded Wear •$904 billion market •Online - growing APPAREL INDUSTRY OVERVIEW
  3. 3. Clothing & apparel industry: Mega Trends Key takeaway: Those retail formats and E-commerce players who are extremely consumer-centric, and who heed to the above trends, will earn better financial returns on their investments. “Fast Fashion is the most important disruptor in the fashion industry today.” *Adapted from a PwC Report ‘Disruption in Fashion Industry’ “Know me” “Engage me” “Make it easy for me” “Wow me” “Make it work” Aligning branded labels to TG Seamless cross- channel integration Renewed focus on physical retail Operational Excellence “Omni-Channel Retail” Chroma Stores: using its strong distribution: 16 cities: same day delivery ET Retail Award: ‘Omni-channel of the year’ “Fast Fashion” Zara, H&M “Exclusive Fashion Boutiques” Manish Malhotra, Tarun Tahiliani “Sharp Brand focus” Craftsvilla – Ethnic Wear for Women •Customer-brand fit •Clear positioning •Big Data •Crowd-sourcing •Direct interaction •Seamless shopping •Convenience •Touch & Feel •New store formats •Personalised Service •Niche, differentiated, •High-end •Flexible supply chain •Reduced inventory cost Trends
  4. 4. Craftsvilla: Celebrating Days Key takeaway: ‘Celebrating Days’ is a major marketing strategy deployed by E-Commerce companies to drive topline “5000 Ethnicities. 6500 languages. 196 Countries. One World. ” *Data taken from ‘Digital Vidya’ 19th June: World Ethnic Day 10 Lakh bindis distributed Colleges (Andhra Loyola) & Companies Singles Day, Alibaba 120,000 orders/min Drives Topline: $14.3 billion in sales Marketin g
  5. 5. Craftsvilla: Referral Mktg. & SEO Key takeaway: ‘These low cost means are employed to ensure effective spending on the Advertisement dollar. “67% of Craftsvilla’s traffic is generated organically.” *Data taken from ‘Digital Vidya’ Referral : Direct Marketing “Online Agents”: 10% com. Tap the network of family, friends and neighbours SEO: ‘3000 keywords’ Higher Visibility, Lower Competition, low-cost Regular effort, not easy Marketin g
  6. 6. Craftsvilla: PR Activities Key takeaway: Marketing spend reaches 50% of some E-Commerce Giants, while through Frugal Marketing and a focus on organic traffic, that cost can be driven down drastically. *Data taken from ‘Digital Vidya’ Ms. Ethnic Beauty Pageant Fashion bloggers: Buzz Emotional connect:Support Artisans & Handloom Inc. 100+ social media platform Campaigns in Theatre/ Radio - target women buyer Generates ‘goodwill’ “Marketing spent of Craftsvilla is less than 10% of its total revenues” Marketin g
  7. 7. Craftsvilla: returns Key takeaway: Craftsvilla has a lean model with conservative marketing budget. However it needs to focus on increasing its ROMI, beyond 1.0 at least. “The only profitable E-commerce marketplace in India” •Craftsvilla takes a commission of 20-23% of each product sold. •Fee is inclusive of shipment cost •It does not invest in warehousing •Employee cost is low as it works on a lean model employing 8-10 people DATA FOR CALCULATION ITEM FIGURE PAT 12,000,000 PAT [%] 0.01 REVENUE 1200,000,000 MARKETING SPEND 120,000,000 INCREMENTAL REVENUE 540,000,000 CONTRIBUTION 189,000,000 ROMI 0.575 Note: Values are calculated on the basis of sales figures of Q2,2013. Contribution has been considered to be 35% of revenue. •Craftsvilla: profitable online marketplace. •Although the ROMI is less than 1, which is worrying . • However given Craftvilla’s rising GMV, it is expected that the ROMI will rise with economies of scale REVENUE MODEL CALCULATIONS *Data taken from ‘Your Story’ articles on Craftsvilla Finance
  8. 8. The Way Forward! Key takeaway: Along with Frugal Marketing, a global focus and a strategy to extend service to the consumer via specialised brick-&- mortar format might help Craftsvilla chart new heights “How can an Artisan from Kutch compete with designers from Milan?” •Promote its offering globally •Early Adopters: NRIs •Differentiated offering •Higher Margins : Exchange-rate benefits SELLING GLOBALLY! 12000 ARTISANS 100+ COUNTRIES •Omni-channel retail + Personalized boutique experience •Artisans of Kutch – designing as per your requirement •Convenience: Home Delivery •Improve shopping experience: Virtual Showrooms OMNI-CHANNEL RETAIL? BOUTIQUE STORES Way Forward