How celeb endorsements, small towns are crucial to online brand Yepme's growth

The four-year old online private-label fashion brand, Yepme plans to raise a ‘significant’ amount of money from a pool of new investors by September. The company has been aggressive in promoting the brand through celebrity endorsements.

Sandeep Sharma, co-founder, Yepme, talks about the company’s international launch, and the huge demand the portal is seeing from smaller towns.

Excerpts from the conversation:

How would you describe the growth rate of Yepme?

We have seen 3x growth rate every year in the last three years. We are doing a lot of things to grow our brand. We have signed a lot of celebrities. In a week or two we are going to sign Shahrukh Khan as brand ambassador and have already signed other celebrities like Farhan Akhtar, Isha Gupta, etc. We want to grow the brand through celebrity endorsements and we are going down that path quite aggressively..

Do have any plans to raise money?

Yes, we are in talks with a pool of new investors who will be investing in a couple of months. Basically we plan to raise a decent capital to fund our next two years of growth strategy. We will be focusing on brand building through more of celebrity endorsements, category expansion and we also want to invest in developing technology. Existing investors will also participate in the new funding round.

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How is Yepme different from other private-label players?

There aren’t many players in the online private-label sales space. At Yepme we sell our own brands and so we do not compare ourselves with a regular online portal. We feel that other portals are merely selling available brands and so they don’t have any control on fashion. That is also the reason why they tend to get repetitive in terms of design and style. We have the advantage of knowing what is the latest design in fashion and we sell in the fashion segment better than any other player.

In terms of pricing, other e-tailers have a wide range of pricing. For instance, they will sell shoes priced at Rs 400 and also at Rs 10,000. Customers have different expectations and out of the 10,000 products that are on the site, most are out of their range. We know our target audience and they operate in a fixed price band. We have two months of supply chain, which simply means we can turn around very fast.

[caption id=“attachment_92709” align=“alignleft” width=“380”]  Sandeep Sharma, Co-Founder, Yepme[/caption]

Are you profitable, yet?

We are close to profitability, but not right now. In another year we will break-even.

You recently went global.

It’s a pilot project to address the international market. We firmly believe that an Indian brand can also become global and there is no reason why we can’t do that. We have the supply-chain and the IT talent in India and even logistics is not a problem. With that vision we have started a pilot project and want to see how it goes. We want to be a strong player in the international market.

How big is the private fashion label industry in India?

The fashion and apparel sector in private label brands is a $75 billion industry. But this is dominated by the unorganized sector, which translates into a huge opportunity to build new brands.

But this is what we hear all the time. Will online retailers be able to cannibalise the market of unorganized players?

Online fashion brand is a new concept. Most of the fashion brands are getting killed because they haven’t been able to invest in more than the top 50 towns in the country. Sales can’t be justified by the kind of capital investment pumped into it. Online fashion brands can operate from a centralized warehouse and there is no need for additional capital investment. The online brands have better success if they do it right. This is the reason we have been able to grow at 3x rate whereas offline brands have continued to grow at the rate of 10-20 percent.

How active have you been in smaller towns?

More than 60 percent of our sales come from smaller towns, places which are out of the top 10 cities. It’s all about fashion, affordability and also the reach. Most of the consumers from internet are moving towards mobile. This section of consumers are important for us as more than half the orders of Yepme come from mobiles. Part of our strategy is driven my mobile and also, fashion. We are the only one amongst fashion stores to set fashion trends and be in touch with trends, besides offer a varied collection.