For Bengaluru-based media professional Sweta Singh, handcrafted jewellery is a style statement and something she wants to cherish for years. Paying top dollar was never an issue for her. But she often faced two challenges—she could never be too sure of quality, especially with online shopping which sometimes comes with the risk of dodgy quality, and many a time she found others wearing the same thing.
For the past two years, one website has become her go-to shopping destination for everything from jewellery to apparel to home decor, and now even furniture: Jaypore. The online retailer curates premium products from top-end brands such as Ritu Kumar and Shades of India as well as traditional products such as Kashmiri Kani shawls and paithani saris painstakingly woven by weavers. “The convenience of buying jewellery online, with reliable quality, is what drew me to Jaypore. The designs are a mix of ethnic and contemporary, which makes it a one-stop shop for jewellery for all occasions,” says Singh.
Cutting through the clutter of online shop - ping isn’t easy. But Jaypore has successfully managed to build a loyal clientele in the six years since it began. And that’s despite the fact that some of its traditional and artisanal products can go above ₹1.5 lakh. The website, which gets its name from the city of Jaipur, was started by Puneet Chawla, 34, and Shilpa Sharma, 51, with one key idea—to present the best-kept secrets of Indian craft and design to a global audience. Before launching Jaypore, Chawla worked in the Internet industry for nine years in different roles, while Sharma was with ethnic products chain Fabindia for more than a decade.
Today, Jaypore doesn’t just look overseas for sales but is one of the largest players in this segment in India. It gets one million visits a month and has a repeat customer base of 70%, which, according to experts, is quite substantial for a niche player. “The number of visits per month with a repeat ratio of 70% is quite impressive. It seems Jaypore has identified a niche opportunity which is getting fulfilled through their platform,” says Anil Joshi, founder and managing partner at Unicorn India Ventures, an early stage VC fund based in Mumbai.
Differentiated offerings will be key to Jaypore’s successJaypore co-founder Shilpa Sharma.
Chawla and Sharma launched Jaypore in 2012 with an initial investment of ₹2 crore from Haresh Chawla, partner at private equity firm True North, in seed funding. They started out in a small haveli in Delhi, but have grown way beyond since then. In 2016, Jaypore raised nearly ₹50 crore from social impact fund Aavishkaar, and has grown almost three times since then. It expects to double its revenue to ₹100 crore this year and break even in 2020. In the meantime, it has initiated conversations with investors to raise the next round of funding worth $10 million. “With a focussed back-end, we believe Jaypore could be an attractive investment opportunity for several Indian brands and even international brands operating in India,” says Noshir Colah, partner, Aavishkaar Venture Management Services.
The $5 billion Indian handicrafts industry is one of the country’s largest employers, with over 7 million artisans spread across the country. But it is also one of the most unorganised and fragmented ones. Even today, handicraft products are sold under three formats—exhibitions, emporiums, and mom-and-pop shops. Thus, the right price and quality always tend to remain under a shroud of doubt.
This is the gap Jaypore is trying to fill. The online store works on a curated platform— sourcing apparel, jewellery, lifestyle accessories, and home decor from about 250 self-help groups, co-operatives and master craftsmen, who in turn employ about 100,000 artisans. The products are curated and 6-10 new collections are launched every day (nearly 2,000 new collections a year) to keep up the exclusivity and novelty quotient. “Our USP is being crafts-led. We bring you India’s best and, sometimes, out-of-sight Indian craft and design in contemporary iterations,” co-founder Chawla tells Fortune India, sitting in Jaypore’s store in Bengaluru’s upmarket Indiranagar. This is Jaypore’s second store which was launched in September. Its first store was launched in New Delhi’s swish Greater Kailash area in March.
Chawla says going offline was always a part of the plan. “We have never looked at this [Jaypore] as an e-commerce business. For us, this has always been a brand. We were very clear that sooner or later we would need to take it offline for a couple of reasons—Internet penetration in India is what it is... We deal in products that one would call premium, so our target customer is consequentially of a slightly older age. The percentage of women in that age who shop online for such products is still very small, not just in India but also globally. So, if we wanted to be a brand of reckoning we had to be offline too,” he says.
Chawla says its New Delhi store broke even in the second month of operations and expects a payback on investments (in setting up the store) in the next 12-18 months. The company plans to open four-eight stores across the top four metros over the next 12 months.
Unlike most e-commerce players, Jaypore offers curated products with a focus on exclusivity as private labels form a large part of its offerings. Though private labels were launched just two-and-a-half years ago, today 70% of its products are private labels in categories such as apparel, jewellery, and footwear. The reason is simple—they bring differentiation, which means a customer won’t find the same product anywhere else in India. Also, they give better margins. Apparel accounts for 60% of its sales, while jewellery brings in 25%.
“The target market for branded contemporary fashion apparel and accessories is quite large. The women’s market still doesn’t have many brands and brands like Jaypore have huge potential to grow,” says Harminder Sahni, founder and managing director, Wazir Advisors, a retail consultancy firm.
The company operates at gross margins of nearly 40% across products and categories. This seems less than the industry average: According to industry estimates, most offline retailers have gross margins of 50%. Luxury products tend to have even higher gross margins, sometimes as much as 80% as these brands often have a mark-up as high as five times the costs. A premium brand, Jaypore currently clocks an average deal value of ₹3,500-4,000 online, compared to an industry average of ₹1,000- 1,200. With offline stores, it expects the order value to increase by an additional 20-25%.
“Working with lower margins is a challenge. We are trying to bring India’s crafts and workmanship to all buyers; hence we cannot up the prices arbitrarily,” says Chawla. With its second store, Jaypore has forayed into furniture. The furniture is, however, not what one would get at an IKEA store or an Urban Ladder or Pepperfry website, as each piece of furniture at Jaypore has an element of craft to it. For example, there are ikat silk fabric upholstery chairs, kilim chairs (with rugs as upholstery) and beds with unique old-world woven headrests.
Jaypore is planning to add more categories in home furnishings, apparel, and jewellery. It has emerged as one of the largest online platforms in the curated hand-crafted and artisanal products space. But it faces competition from several players such as the exclusive and upmarket Good Earth or other ethnicwear sites such as Tjori. Still, experts feel curated products will always have space in the market. “Niche players are much more agile and are quick to market, and most customised in their offerings. The size does come into the picture as larger players have a harder time being nimble,” says Ashish Jhalani, founder of e-commerce consultancy eTailing India. “The threat from the likes of Myntra and others will always exist and they just need to be a few steps ahead. Jaypore has a strong history of serving this category and understand better what their target customers are looking for.”
Jaypore, which launched its second offline store in Bengaluru in September, plans to open four-eight stores over the next 12 months.
Jaypore’s Sharma is not perturbed by competitors. She says a differentiated offering will be key to the brand’s success. “Private labels are our moat around the business. That said, the fact that we built a strong reputation as a tightly curated platform for all things beautiful and for all things high on design and contemporary art, we will always be ahead of everyone else in our approach to the retail business, because we are not bogged down by having to create everything ourselves,” she says
Chawla and Sharma are optimistic about their business plan to become a complete lifestyle brand. While India is the core focus for Jaypore, it also has an overseas business in countries such as the U.S., the U.K., Malaysia, and Dubai. Some 25-30% of the revenue comes from overseas sales. Jaypore’s growth strategy includes expanding into newer product categories such as personal care. And buyers like Sweta Singh aren’t complaining.
(This story was originally published in the November 2018 issue of the magazine)