Don’t Compare Our Market Share With Other Fashion Portals: Voonik
Riding high on the plank of ‘accessibility’ and ‘affordability’ particularly for the Tier 2 and Tier 3 customers in India, Sujayath Ali, the Co-founder and CEO of Bengaluru-based online marketplace Voonik said that their market share cannot be compared to other online fashion portals like Amazon and Flipkart who cater only to the metropolitan urban and brand conscious customers.
Speaking to BW Businessworld, Ali said that they are not competing with the branded fashion portals. “We’re solving the accessibility and affordability problem for tier 2 & 3 customers, which are currently an underserved consumer segment. In our targeted market we’re the leaders with the lion’s share of the customer wallet and market share,” he added. Around 75 per cent of Voonik’s business is generated from the sales in Tier 2 and Tier 3 cities, the company claimed.
Talking on the expansion plans, Ali said that currently, they are looking forward to enter into private labels which will enable them to deliver high-quality collection across categories like ethnic wear (Sarees), footwear, lingerie and jewellery at affordable rates. It also launched Voonik TV in July to add video commerce to its umbrella.
“Our loyalty programmes Voonik Primo, Voonik TV and own brands –Zohraa and Gardenia, are our biggest bets. These projects will contribute to about 50 per cent of our business in future,” added Ali.
For FY17, Voonik says it did $100 Million of Gross Merchandise Value (GMV), wherein its revenue stood at $20 million (around Rs 129 crore at current exchange rate). The company claims that this was a 150 per cent growth in GMV and 300 per cent growth in revenue compared to FY16. GMV is a term used in online retailing to indicate a total sales dollar value for merchandise sold through a particular marketplace over a certain time frame.
According to a media report, Voonik for 2014-15 clocked a revenue of Rs 42 lakh which jumped to Rs 16 crore in 2015-2016. However, the company is said to have reported a loss of around Rs 85 crore for FY 16. Explaining the reasons for the loss, the company said that till December 2015 it was operating on the affiliate model where it redirected orders to other portals. And since the affiliate commissions are a certain percentage of total GMV, its revenue were lower. But January 2016 onwards the company has switched to marketplace model thereby generating higher commission percentage and hence higher revenue.
In the marketplace model, Voonik is competing with rival e-tailing giants including Jabong and Myntra (owned by Flipkart) and also new players like Limeroad, Koovs, StalkBuyLove etc. According to reports Jabong and Myntra together constitute around 70 per cent market share of the total size of the online apparel market.
For 2017-18 Voonik has a target to cross $200 million in annualized GMV in 2018. A year ago Voonik received an investment worth Rs 134 crore in series B funding by venture capital firm, Sequoia Capital. “We raised around $37 million in total. We are currently looking at moving into private labels that will help us deliver an extremely high-quality collection across categories at very affordable prices,” says Ali.
