Craftsvilla's frugal marketing practices through E-Commerce

1. VISMAY SOURAV
Smart Marketing with
Craftsvilla
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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. 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. 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
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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
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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
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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. 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