The fast-multiplying internet population is changing the way many Indians are shopping and also impacting how businesses function. This has led to an upswing in the E-commerce space in India and myriad of brands have come into play especially in the apparels and fashion accessory categories. Fashion and You, 99labels, Yebhi.com, myntra.com, jabong.com are a few names operating in this space. But most of these online retailer brands or e-tailers, as they popularly call themselves, sell products of other brands or unbranded products.
But breaking away from the monotony of selling othersâ€™ stuff is Yepme.com, which is taking a different route. The e-tailer sells Yepme branded products only and offers no other brands or any non-branded products on its website. Currently, it has both menswear and women apparels and menâ€™sâ€™ accessories and shoes. Unlike, other online retailers Yepme is attempting to create its own brand in this space and is banking on rapid growth in the e-commerce space. Not just that, the brand has set aside a whopping marketing budget of Rs 32 crore.
Sample this: According to the estimates by Internet and Mobile Association of India (IAMAI) that Indiaâ€™s e-commerce market is growing 70 per cent every year. According to a report by MSL Group titled â€˜Evolution, Growth and challengesâ€™ the size of e-commerce in India was $6790 million (Rs 38,02,400 lakh) in 2010-11. It is estimated to go upto $10000 million in 2011-12. In the overall e-commerce pie, e-tailing has a share of 6.48 per cent.
Private label like strategy
So why is the emphasis on creating its own brand? Quiz Vivek Gaur, CEO, Yepme.com and he candidly admits, â€œLike other players in this space, we also started as selling other brands and then we realised there was no differentiator and the margins were low too. And so we grasped that if we have to survive in this space for long, we have to develop our own brand.â€
Experts compare this online model of Yepme with private labels in physical retail. Prashant Mishra, Professor Marketing,Â IIM Calcutta says, â€œI find this concept very similar to private labels by retailers like Shoppers Stop, Big Bazaar, Croma etc follow.Â I think itâ€™s a high risk high gain game for Yepme. It is a very challenging proposition but can be very fruitful if they succeed.â€
Yepme is also retailing its products through other e-tailers like Jabong.com, Deals and you etc.
Yepmeâ€™s focus is mainly the non-metro audience and they contribute about 70 per cent to Yepmeâ€™s turnover. Gaur argues, â€œConsumers in non metros and small towns donâ€™t have easy access to brands but their aspirations have been growing quite fast. We seek out to democratise fashion, Indians living in even the most remote part of the country can now order the latest in fashion through our portalâ€.
Experts feel targeting the non-metro audience is a good strategy as it is an underserved market that is currently using tailored products or local brands. And if there is a brand with a decent pricing these consumers will be happy to lap it up. For instance, the Indian apparel and footwear market is valued at over $ 50 Billion and the branded segment contributes less than 15 per cent and reaches out primarily to top 20 towns in India. These statistics show the untapped opportunity that is there in this space.
Marketing budget of Rs 32 crore
Like the other e-tailers, Yepme has got aggressive on advertising. It has launched its first TV campaign on 8th June and has spent about Rs 3.5 crore on it. The company has a marketing budget of Rs 32 crore for the financial year 2011-12.
Yepme, which has a monthly turnover (as of May 2012) of Rs 2 crore is expecting it to go up to Rs 4-5 crore a month after their media campaign. Since the brandâ€™s focus is more on non metro cities, it is advertising on national channels like Colors, Sony, Star Plus, Star Gold, Mix, SetMax and Aaj Tak. Additionally, it is advertising on regional channels in the Southern region. Out of the Southern markets, Yepme is advertising on Tamil, Telegu and Kannada channels.
So what kind of results has the brand got after the initial days of TV campaign? Gaur shared that the page views have gone up by three times just after 5 days of advertising. The total page views of the portal is about 65,000 a day now and the brand expects it to go up to 1 to 2 lakh a day. Also the bounce rate (which means the percentage of customers which visit the page but donâ€™t buy it) has gone down from 40 per cent just before the campaign to 20 per cent after five days of the campaign.
Experts feel the key challenges faced by Yepme or any other e-tailer in India is that ours is a low trust society and thus establishing the trust factor in consumers at multiple levels (delivery, payment, quality etc) is the biggest challenge. Gaur says, â€œThatâ€™s why I say the journey for us is a steeple chase instead of a 100 meter sprint. But we have chosen the path of creating our own brand and building consumerâ€™s trust in it and that will play key role in our success.â€
IIM Ahemdabadâ€™s Mishra agrees as he says, â€œTrust issues are always very strong for online brands and thatâ€™s why these players compensate for it in pricing.â€