After several pivots, Craftsvilla, an online ethnic wear retailer, has been struggling for years to find a stable business model.
To refurbish this image from being a marketplace to a brand this year, the company has received Rs 30 crore so far from its Singapore parent entity, Supera Investments Pte. Ltd. It has picked up these funds in 3 tranches of Rs 10 crore each in February, June, and September.
The company has gone through major changes since inception. From being a marketplace for handicrafts, the company is now an ethnic clothing and jewellery store for people and is now striving to become the fabindia of the Internet.
As per the CEO and Founder Manoj Gupta’s interview with AdAge, the company supports its actions by citing a report by PwC that claims “ethnic wear accounts for around 74 per cent of the women’s apparel market and is valued at 14–16 billion USD. It is growing at a CAGR of 8 per cent and is expected to reach 27 billion USD by 2025. More than 75 per cent of this market is unorganised.”
Even with this market report to support Craftsvilla’s plans, the company’s financial figures for FY17 told a different story. The revenue of the company for FY17 had gone down 17.7 per cent from Rs 36.89 crore to Rs 30.35 crore. The basic turnover itself depleted 21.1 per cent.
On the other hand, the company had spent Rs 4.2 in FY16 to earn a rupee, while the expense per single rupee of revenue earned was controlled to Rs 3.8 in FY17. The losses brought down by 27.6 per cent to Rs 85.98 crore by a control in expenses rather than improvement in revenues.
What dampens the spirit is that the company’s entire idea behind selling ethnic products is it just being limited to a handful of ethnicities and manufacturers. In a country with countless cultures and a class of artisans that could actually benefit out of a platform that sells their products online at a fair price, the original idea of Craftsvilla could have gone a long way, if executed well.
Going further, the company might not have an acute shortage of funds, but looking at the financials, and the results of the pivot into an ethnic wear brand, the future looks unpromising.
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