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StalkBuyLove: The art of calculated risks

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Born and raised in Dusseldorf, siblings Tushar and Shikha Ahluwalia have a habit of slipping into German while conversing. They also complete each other’s sentences – which underlines their comfort on personal and professional levels.

When the duo cofounded StalkBuyLove, a womenswear e-commerce portal, they realised that the best way to stay ahead of competition was to own control of every aspect of the business – from purchase of raw material, design, manufacturing, and marketing. And like most millennials their age, they don’t believe in letting grass grow under their feet, as they outline their plans on how they plan to keep racing ahead.  

After their education in Germany, went on to work at the Deutsche Bank for a little while before moving to Indian in 2011 to join Rocket Internet. In 2013, he started StalkBuyLove (SBL) with Nishrit Shrivastva and Aashna Chopra. Shikha joined them two years later after she completed a stint at JPMorgan in London.

Talking about the initial days, Tushar said, “When you start out you don’t know what will happen in 10 years. However, there’s an element of conviction always while starting the business.”

What convinced the trio to start the company was the success stories of other entrepreneurs with similar backgrounds who were doing phenomenal businesses in the UK. Closer home, Jabong was being held up as the poster child for the emerging etailing fashion business, dispatching almost 6000 orders in 2013. SBL’s team understood the financial aspects of this business and how their own business could overcome potentially the prevalent economics of the Indian market, which back then was about the tight basket size in the online world.

NEGOTIATING CUSTOMER ACQUISITION COST

During the first phase of India’s India fashion e-commerce, the economics were stacked up against the brands. Venture capitalists (VCs) were happy to fund these startups but asked tough questions, especially about Customer Acquisition Cost (CAC) and how the companies planned to reduce this.

“If you look at it, lifetime values were negative already at contribution level. So, CAC doesn’t matter, because every customer is a negative contributor to the bottom line. We, therefore, came up with a different business model from the marketplace one. As a vertically integrated brand, we own our own inventory, and have a system to know the purchase decisions,” Tushar explained.

Having an optimized system data-driven system allowed SBL to invest in the right kind of inventory at the right time and reap higher gross margin. Additionally, by taking ownership for the inventory as a private label brand, and using automation, they minimized the errors for for inventory management decisions.

THE INFLUENCE OF OPINION LEADERS

Another business strategy that SBL pursued to increase its reach amongst consumers is targeting niche audiences through key opinion leaders (KOL). Talking about this, Tushar said, “The opinion leader led community building on the demand and the supply side enables quick response. This allows us to test the products that work and remove non-performing SKUs quickly and invest capital behind movers.”

In his opinion, till five years ago, the online fashion business was about quick reaction, super-fast supply, training and a robust supply chain. However, now things have changed and it rests on three main pillars. The first is leveraging a large fan community through social media and KOLs. Shikha has managed to build this for SBL.

The second pillar is a data-driven supply chain that optimizes the SKU catalogue. By leveraging data, it can take input from the buying community and provide it to them real time.

The third pillar is omnichannel. “We are taking our online learning and using it to create a collection quickly that person in that store. We have seen phenomenal results with our first store outperforming most of our peers and from day one, we were able to score a 15% EBIDTA margin,” Tushar proudly claimed.

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