Fashion e-tailer eShakti rides U.S. custom market

Start-up plans to raise $25 mn to enter Europe, China, Japan

In 1996, when brand marketing specialist B.G. Krishnan read about how anyone could build an international company in Bill Gates’s book, ‘The Road Ahead’, it touched a chord.

Having worked in marketing and sales, Mr. Krishnan was convinced that the Internet would create a level-playing field for all, make geographical boundaries disappear and reward those who create products with real benefits.

These two beliefs converged when he picked export of ladies’ garments from India to the U.S. as a business idea.

The result: eShakti.com, a women’s fashion company that lets its overseas buyers customise their dresses, tops, skirts, pants and jeans online before ordering.

“In India, fabrics are purchased through touch and feel. We wanted to change it — firstly, by moving away from offline to online stores; secondly, by offering customised clothing made to your size, style and height; and thirdly by offering what is seasonal and trending,” said Mr. Krishnan.

eShakti came into existence in 2008 with an initial investment of $15 million from the founders and private equity investors. The technical and marketing team sits in Chennai, while the core design team is based out of New York. Manufacturing is outsourced to six units in Gurugram and the firm has a returns centre in Seattle.

‘Data-driven’

“We have a large database of necklines and sleeve designs. A customer can mix and match necklines, sleeve designs as well as the fabric as per her choice.

“She has to give her body specs, the design and the fabric she wants on the company’s website. After that, the dress is made virtually and then the stitching happens. The product is delivered within 14 days of placing the order. It has worked well in the largest fashion market in the world,” said Mr. Krishnan.

According to Mr. Krishnan, about 60% of eShakti’s customers used customisation for size or style while all of them used customisation for height.

eShakti enables live tracking of orders by the customers from the stage of cutting the cloth, to shipping. “We have been using technology to disrupt the market using key factors — customer acquisition, retention and adding life-time value to customers. Our customers are our advertisers,” said Arasu Shanker J, chief technology officer, eShakti.

‘Untapped market’

Asked about the differentiating factor, Mr. Krishnan said, “The $168 billion women’s apparel market has significant untapped potential due to variation in body shape, size and height.

“The market is unable to cater to these widely varied sizing needs. That’s why we decided to get into this market. Our value proposition is customisation that is easy, affordable and fast. In the US, we are positioned between budget and moderate.” The Chennai-based company carries inventory for 11 days. It does not have a significant advertisement budget.

“For us, customers are our brand ambassador. We have a Facebook page, wherein if a customer rises a question, it is answered by several satisfied customers. That speaks volumes for our success,” Mr. Krishnan said.

Currently, eShakti is conducting a pilot run in Australia and Canada. Next year, it plans to enter the U.K., France, Italy, UAE, Singapore, China and Japan, said Mr. Shanker.

‘$100 million target’

To meet its growth targets, eShakti is in talks with private equity players to raise $25 million, which, Mr. Krishnan said would happen by the fourth quarter of 2017-18.

The funds raised would be used for entering new markets, expanding existing offerings, for new offerings such as jackets, sweaters and bridal wear and for upgradation of technology.

“From $1 million in 2008, we have grown to $20 million and hope to touch $100 million in five years,” Mr. Krishnan said.