Dopamine is a neurotransmitter that triggers the brain’s reward and pleasure centres. Now, what does a term that’s straight out of a psychology or neurology textbook have anything to do with online fashion retail, you ask? Well, if LimeRoad founder Suchi Mukherjee is to be believed, everything.
“I’ve always believed that we’re in the business of dopamine. We spend a lot of time thinking what about which products make customers happy and how,” said Suchi Mukherjee, CEO and founder of LimeRoad, a well-known name in the online fashion retail space in India.
The e-commerce industry in India has been hotting up in the past couple of years. The country just witnessed the largest e-commerce deal in the world with Walmart buying Flipkart for $16 billion. Flipkart itself has been ramping up its fashion vertical, which crossed the $1 billion sales mark in FY18. The company says it expects that figure to touch $1.7 billion this year. This is over and above what the company’s fashion-focussed arms, Myntra and Jabong, clock in.
Myntra (along with Jabong) too seems to be having a good run, clocking in a gross merchandise value (GMV) of $1.2 billion in FY18 with a target of $2.7 billion by the end of the current fiscal.
According to industry experts, Flipkart-Myntra-Jabong holds around 65% of India’s fashion market share.
However, these ambitious targets and 10-digit sales and GMV figures don’t seem to be threatening a relatively smaller player like LimeRoad. “From day one, we were focussed on being a sustainable business in terms of growth and profitability,” Mukherjee said, adding that LimeRoad is now the fastest growing fashion e-tailer in India, growing 10% month-on-month.
From shipping just 1,200 packages in April 2013, the five-year-old company said in April this year it shipped 1 million packages.
“I’ve never funded a discount on any product. Other players may say it’s all about the pricing. But I don’t think that’s how a company can grow,” she said.
From shipping just 1,200 packages in April 2013, the five-year-old company said in April this year it shipped 1 million packages. LimeRoad also said its revenue grew 11 times in the last three years, but refused to reveal the exact figures.
The company has now set its sights of becoming fully profitable, which is not that far away, according to Mukherjee. “We will hit full profitability, as in our profit and loss statement will show a profit, by the third quarter of this year,” she said.
What seems to be working for LimeRoad is its unique model in which little-known Indian designers and curators of fashion products from across the country can access an entire gamut of sellers and customers through its platform.
LimeRoad recently launched a programme called India Design Cell for young and upcoming Indian fashion designers to have the option to sell their products through thousands of sellers on the company’s platform. (Currently, LimeRoad has 4,000 sellers who earn money through the platform every month).
“Right now, India Design Cell has about 10 designers, we hope to take it up to about 100 in the next couple of years,” Mukherjee said.
The curator model is another USP. Anyone from any part of the country can share a product from their area on the platform and they will earn a commission on every sale of the item. “This is turning women in several smaller towns into budding entrepreneurs of sorts. They’re like celebrities in their neighbourhoods,” Mukherjee added.
The common thread that runs through all these aspects of the company seems to be the focus on making all stakeholders happy.
That’s what affordable fashion can do; it can push people to take risks they otherwise wouldn’t take.Suchi Mukherjee, CEO and founder, LimeRoad
“I once met this lady in Pune who fell into the plus size clothing category. She was a LimeRoad loyal and had even got her coworkers interested in buying from us. But her story was what moved me,” Mukherjee said, going on to say that the woman had come to Pune after escaping from an abusive marriage back in Chennai.
“She told me she was contemplating buying a jumpsuit, which was trendy at the time, but was sceptical. Finally, she decided to buy one from LimeRoad as it was affordable and wore it for a night out. Her friend showered her with compliments,” Mukherjee said, beaming with pride. “I felt so good on hearing that story from her. That’s what affordable fashion can do; it can push people to take risks they otherwise wouldn’t take.”
It is with this focus on making customers and other stakeholders happy that LimeRoad hopes to scale newer heights in the future. Although, with competition heating up and other players like Ajio, Stalk Buy Love, and Romwe beginning to eat up some of the market share, the road may not be a smooth one.
Suchi Mukherjee, however, is unfazed. She launched an offline store in Gujarat in March and plans to have more than 2,000 stores across the country in the next three years. The company recently forayed into men’s clothing and kids’ wear and is looking to foray into plus size clothing in a big way, introducing larger sizes in all designs soon.
The company has raised $50 million so far from investors that include Matrix Partners, Lightspeed Venture Partners and Tiger Global Management. But it is not looking to raise any more funds in the near future. “That’s the good thing about being profitable. I can decide if and when I need the money.” Mukherjee asserted.
“We started with just 30 people in our head office in Gurgaon. Today we have about 650 people… Companies have approached us to buy them as well, but we haven’t found anything compelling so far. However, we’re always open to inorganic growth opportunities,” Mukherjee said.