Online fashion retailer KOOVS is in the final stages of yet another fund raising round. It is looking to raise £35 million in a phased manner, which includes £5.55 million till date. Mary Turner of KOOVS Group talks to BrandWagon’s Ankita Rai, on the company’s plans to increase brand awareness and its learning from UK online fashion retailer ASOS. Excerpts:
KOOVS has an inventory-led business model at a time when most e-commerce players have shifted to a marketplace. What is the rationale?
KOOVS is focussed on the young and style conscious millennial. We are not a marketplace. As a fashion house, we want to be very targetted. We curate all our designs. About 45% of our inventory is our own private label. The rest 55% is brands and half of what we take from brands is also exclusive to us. This means, we hold our inventory, photograph it and do the presentation. We are not purely a transactional site. We are an editorial site as we suggest what to wear, how to wear, share lifestyle stories, different looks, celebrity clothing etc. It is a lifestyle portal, rather than one driven by discounts. We are a fashion house which is on the e-commerce platform. That is one of our key differentiators. Discounting is not part of our business model. We want to be famous for fashion
What is the merchandise turnover at KOOVS? Is KOOVS inspired by the likes of offline fashion brands such as Zara and H&M?
We have two big seasons — spring/summer and autumn/winter, and 10 collections a year. There are 4,500 new designs every month at KOOVS. The merchandise turnaround depends on the type of product. For big collections, we buy in advance. The monthly collections change every four weeks. From a fashion perspective, we are like Zara or H&M online. Our design team is based out of London as we are a western fashion house, while execution is done in India.
KOOVS is said to be inspired by ASOS. Any takeaways from ASOS that you plan to put to use in the Indian market?
The chief creative officer at KOOVS was earlier the chief creative officer at ASOS when it started. Our whole team is fundamentally from ASOS. The core of their learning comes from ASOS. They know where to look for designs and sampling, procurement and supply. Each one has 12-18 years of experience in this. The fundamental lesson we all bring from ASOS is that one has to be very focussed and clear in terms of what the brand stands for. That way you can build a sustainable business.
In 2001, when ASOS was launched, retail gurus fell over laughing saying who would buy a fashion item online from a picture. It took five years for ASOS to establish itself. Initially, it sold everything — sunglasses, coasters, lamps etc. ASOS stands for ‘As Seen On Screen’. So it would source anything that a consumer saw on screen and wanted to buy, whether it was a lamp seen on the TV series Friends or a celebrity dress. Later, ASOS found that the biggest chunk of the requests were for dresses that celebrities wore. So it started its own private label.
I don’t see Amazon and Alibaba as competitors but as developers of the e-commerce ecosystem. The kind of investment these big brands are bringing is helping in building the market and strengthening the infrastructure. This will also force other players to step up their game.
The first wave of e-commerce came from general, horizontal players. The first transactors of online are people who shop for discount. Even in the UK, online shopping started with discounts. Then it became convenience, followed by choice. The next wave is of discerning consumers who want specialised products.
The Indian market is very unique. Our target audience is 18-34 year olds who are very tech savvy. It is not just fashion; the millennials in India are interested in everything global. In the US and the UK, there is a very mature high street. In India, the concept of high street doesn’t exist. Organised retail is limited. In fact, India is leapfrogging from unorganised retail to e-commerce. While COD still dominates as the preferred payment system, in five to eight years we will see people skipping credit cards and debit cards and jump straight to wallets.
This combination of the youth population and lack of organised retail makes India a very promising online market. The challenge is infrastructure. We have to build infrastructure in place to offer solutions like next day delivery in a majority of cities, not just the metros.
The temptation of discounting is always there like a low hanging fruit. As a CEO, I make sure we don’t rush to it. If you are always driving for today’s revenues, you tend to do things that ultimately destroy your brand value. We want to build a sustainable business. We want to just do a hub and spoke model.
KOOVS launched its first TV campaign only last year. Is the focus now on brand building?
I used to say KOOVS is the best kept secret and we mostly marketed through word of mouth. We started with women’s wear in 2013. In 2014, we launched men’s wear and last year, we expanded into footwear and accessories.
By 2015, we had established the brand and decided it was time we made the secret well known. Post the campaign, Step into KOOVS, our brand awareness increased from 1% to 8%, the traffic coming to the site doubled and the conversion rate increased. We plan to do more TV, digital and social media campaigns. The focus is now on brand awareness and extending our product line into everyday fashion. Our turnover was £10 million in the last financial year, an increase of over 189%.