CampusSutra is an apparel and accessories brand targeted towards youth. Products of Campus Sutra are based on slice of life of a young person in India. Started in 2012 by 4 professionals the company has become the biggest online apparel bootstrap company in terms of revenue.
It was great meeting Dhiraj Agarwal – Co-Founder & CEO, CampusSutra. Passionate about entrepreneurship from his early years, Dhiraj has nurtured the fire for ‘starting up’ from a young age.
In less than 3 years since the company was founded, Dhiraj (31) and his co-founders have built Campus Sutra into one of the most exciting apparel and accessories brands targeted at the 18-25 demographic in India. The bootstrapped company is poised to record Rs. 40 crore in revenues in 2015-16.
In addition to its proprietary online channels, Campus Sutra is a category leader on Flipkart, Snapdeal, Jabong and Myntra. The brand is also sold in 30 offline stores around India and is targeting a Rs. 100 crore turnover in 2017.
After his BBM from Christ College in Bangalore, Dhiraj began his career in ING Vysya Bank in 2004. In two years he rose to head sales for two-wheeler finance with a 30 member sales team and relationships with 60 dealer outlets across Bangalore.
Dhiraj left the company in 2004 to pursue his MBA from NMIMS (Narsee Monjee Institute of Management Studies), specializing in marketing. In 2006, he joined Bharti Retail (which was at that time Walmart-India’s JV partner). During a 6-year marketing stint with the company, Dhiraj was an integral part of the launch team for nearly 160 supermarkets and 16 hypermarkets around the country working with 11 external agencies and managing a budget of Rs. 110 Million.
During this time, he was chosen for the Economic Times Young Leader for the Year Award in 2011 and was among 22 professionals across various organizations in the country identified with exceptional leadership qualities.
In addition to his MBA, Dhiraj has also completed a certificate programme in Strategic Retail Management from the Indian School of Business (Hyderabad).
Below are direct questions fired at him and his response recorded.
Bootstrap and challenges faced?
Growth in e-commerce in India is predominantly driven by discounts and low prices. Most of the companies with investment spend large part of their fund in discounts and compete on price. In the process most if not all companies are losing money at a transaction level.
At Campus Sutra we were faced with the challenge of competing with these companies on product and service proposition rather than on price. Also in marketing Campus Sutra has relied on its customers to be the brand ambassadors compared to most other online apparel companies, who spendup to 100 % of their revenue on marketing.
How do you see the present market and E-commerce run?
I see E-commerce in India growing at an exponential pace in the years to come. In India we have just scratched the surface of the potential market. Growth of Internet, Lack of options in Tier 2 Tier 3 cities and benefits of centralized inventory are all factors that will fuel this growth in years to come.
Volume is given more weight than margins, Volume is discount driven and margins signify real business. Your views on this.
We at Campus Sutra have taken a contrarian view on pricing being the main factor driving growth. We believe that especially in case of categories like Fashion price alone cannot grow the brand beyond a certain level. It is with this view that we have focused lot of our energies into building our brand on design differentiation. Having said that since our target focus is youth in the age group of 18-24 we have ensured that the products are affordable for this segment.
Can Online and offline markets survive together?
Even in a developed market like USA, where the E-commerce revolution happened a decade before India more than 80 % of the retail is offline. While online has the advantage to offering the benefits of wider range, price benefits due to centralization etc. the value of offline cannot be discounted. Even 25 years from now I see offline retail contributing to the majority of the business in India.
How big is your market and what is your strategy?
Organized casualwear apparel market in India is estimated to be worth 12 billion dollars. Online currently is less than 10 % of this. We see the online apparel market growing rapidly. Campus Sutra is targeting to be a 100 Crore brand in 2016-17 and a 1000 crore brand by 2022.
What are your plans to boost sells at your own portal to increase the margins?
Campus Sutra has recently redesigned the interface, which is being received very well by the customers. Our orders are seeing exponential rise month on month. We have also launched the app, which will further strengthen the sale from our proprietary channels.
How many people CS employs and how CS keeps them motivated?
We are currently a team of 50 members. We are in the growth phase of business, which provides our employees huge opportunity to learn and grow. This is the main motivation for our whole team. We believe that we are witnessing a revolution like the IT industry in the last couple of decades. Employees who can create skill sets by participating in this revolution will benefit in the years to come.
Marketplace model is great; they enjoy better valuation than a portal selling their own stuffs. We see every other website is a marketplace.
Marketplace as a model can accommodate only limited number of players. We believe that the place for horizontal market players is limited with 3 strong players already in the market. For a new marketplace model to succeed in India it needs to create a niche for itself. At Campus Sutra we don’t see our platform becoming a marketplace anytime in the future.
E-Commerce is a real Boom or bubble to burst?
It is true that valuation in certain companies have touched astronomical figures, however the e-commerce revolution in India is just starting. The potential is immense. Companies, which are creating value to the customer, will continue to do well and grow. Companies, which are behind valuation and are not focused on the business principles, will undergo transformation as the dust settles down.
Are you looking for funding and what are your key matrices and states for investment proposals?
Yes. We have appointed E & Y as our investment banker to raise Series A. The matric depends on the industry and segment. However some common consideration points are – Quality of the team, the idea, execution capability, current run rate among others.
Posted 2 years ago by CA Pulkit Sharma
Dhiraj Agarwal is active on the board and you can put your questions for one to one discussions.
Posted 2 years ago by CA Pulkit Sharma
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