Penetration Of Fashion Online Is Just 9% To 10 %: Rishi Vasudev

Rishi Vasudev, Co-founder and CEO, G.O.A.T Brand Labs, in conversation with Annurag Batra, Chairman & Editor-in-Chief, BW Businessworld and Exchange4Media, speaks about his journey, his vision as a startup owner, and the need for D2C market space. Edited excerpts 

When you started your career 23 years ago, did you ever think you would become an entrepreneur? 

I always thought I would bring my energy to ventures that have already started. If anyone would have said even a year back that you are going to be an entrepreneur, I would have been surprised.  

You grew up in the Northeast. What was your childhood and growing up years like and what were the key influences? 

I am a Punjabi, but I come from the north-eastern part of the country. I'm from a small town called Lumding, which is close to the Nagaland border. My father was also born there. My grandfather migrated from Pakistan to that part of the country looking for work. My mother is from Delhi; she is an M.A. in Mathematics, and my father is a B.A. L.L.B. Both were keen that I didn’t just join my father's timber business. They wanted me to study and get into the corporate side. My childhood was spent playing with the children of the locality -- it was a small town upbringing. As we realised there were not good enough English speaking schools in that town, beyond class five, my parents decided to put me in a boarding school. First I studied in Shillong, then Mussorie, and then Kolkata, following which I did my engineering and MBA.  

How would you describe Rishi Vasudev? 

I would describe myself as someone who looks at things from a purist point of view, and would always want tomorrow to be better than today. I am always in the pursuit of making things better. If in any job or assignment, I reach a point of stagnation, I really push myself to change it. This is applicable to my running, sports, or any other aspect of life.  

You went to an engineering school; how did it prepare you for the future? 

One thing became very clear in college that I would not be an engineer, that is, I would take the degree but I would not take job as an engineer. I got into a lot of cultural events, organising events, and was the secretary of the college photography club. I was always into organising things; was in charge of Microbus, which was the electronic society. I also managed to be in top five or top seven of the class. That was also a time when people were migrating to the US, and solving the Y2K problem. I went for an MBA because it seemed my calling was in management. I did not even sit for my campus placements.  

What was the story behind getting into MDI? 

I got into MDI by chance. I would spend an hour or two everyday preparing for the test, and did absolutely no preparation for the interviews. I cleared most of the colleges. However, when it came to interviews I was probably not doing as well.  I was on waiting list in MDI, and fortunately they extended it from 60 to 90 seats. That is how the waiting list got confirmed into a sure seat.  

You have set up GOAT Brand Labs. What is your vision, and what have you been able to accomplish in the last six months? 

I spent most of my working years going deep into one segment, which is fashion and lifestyle. I joined Aditya Birla Group and joined their textile business which went into working for Madhura Garments and Louis Phillippe, where I built their suits business. I then moved on to Arrow and handling Calvin Klien. In that journey as well I was looking to do things deeper rather that dabbling across industries. That is when Flipkart happened. I was plateauing in terms of learning, having spent so much time in Aditya Birla Group, and I thought why not get into the upcoming sector which is ecommerce. I was one of the first senior leaders to get into Flipkart and fashion online. That was back in 2014, and built their fashion business from $200 million to $2 billion over six years. That was the journey where I saw online as well as offline retail business practices. I then realised I had to do something, which is why I stepped out to do lifestyle. It struck me it is the same as I had left it offline. I then decided to start my own entrepreneurial journey. The idea came about, as online was the new arena to buy and regain distribution for a lot of brands, and growing at a very fast pace. The penetration of fashion online is just nine or ten per cent, and there is a long way to go if you look at markets like the US, China, etc. One way of giving back to society is to work with some of these upcoming brands and make them bigger. I got some marquee investors, which is how the journey of GOAT Brand started.  

You have now raised USD 2 million in equity and $6 million in debt. You have acquired seven brands and are in the process of acquiring a few more. What is your vision for GOAT over the next 24-36 months? 

We have raised a total of USD 36 million, which included USD 16 million in equity and remaining in debt. This money we are using to acquire brands. It has been four months since we raised this capital. We are already a team of 35 people. We have already closed out 13 brands, of which we have announced seven. Every week we are announcing one or two new brands, and the idea for the next two years is to acquire 30-35 brands. Currently, there is a pipeline of 25 brands, which is under discussion. From our side, we want to build an infrastructure that all these brands can use so that it becomes a plug-and-play kind of model. When a new brand comes, there will always be a tie-up with logistics, warehouses, marketplaces, digital marketing, and the like. The brands which were earlier running at a level can quickly scale up. 

When you acquire a brand it presents its own set of challenges, be it issues of culture or vision. Sometimes it makes sense to keep the founder, sometimes it makes sense to let go of them. What are your views on this? 

We started GOAT Brand with the aim to create a better selection for the consumer by helping brands and their founders thrive. We want to be the most founder-friendly partners in the world. Therefore, the whole thing starts with how to enable the founder. This is because the founder has built the brand he adds bandwidth to the team, creativity, layer of innovation, which might not be the right placement when picked from a corporate job. We acquire about 60 per cent and keep 40 per cent with the founder so that he has a large stake. We give him complete control on all the aspects of creativity, brand marketing, operations, etc, and support him in the back-end. That way he does not have to get into things like warehousing, logistics, where the economies of scale works. We have experts in various areas which help the founder. 

These are available to you, but not thrust upon you. However, there are exceptions to this when the founder has been around too long and wants to opt out. Most of these brands are USD 2 million to USD 5 million in size. At this scale it is easier to amalgamate brands together. Once they become Rs 50-100 crore brands, it is difficult to integrate them.  

While D2C continues to grow, physical retail continues to be robust. What do you have to say about omnichannel experience. Do you feel the D2C space is getting too crowded? 

We acquire brands which are digital-first, not digital-only. There is a clear strategy that we will grow them in the offline world as well. I have over 15 years of offline business experience as a very senior person who had helped Arvind grow these brands in the offline space. Most single retailers or large chains are very close to me. That is where we will take these brands as well. However, if you are completely dependent on offline as a distribution, the scale-up is slower. Ecommerce allows you to grow across the country at a very fast pace. D2C allows you to scale at a very low overhead cost. Unlike some of the developed markets, India is not a one-platform market; you have Flipkart, Amazon, etc.