After smartphones and electronics, fashion has emerged as a strong vertical in Indian online retail segment. The online fashion space is estimated to grow 4X to reach $30 billion by 2020 from $7-10 billion now.
Despite of growth in the vertical, none of the many companies including Fashionandyou, Jabong, Voonik, Roposo, CraftsVilla and Limeroad have been able to find a firm foot. Consequently, venture capital also lost confidence in the segment.
Funding in fashion startups had registered a plunge of 85 per cent in 2017 ($39.5 million) from heady years in 2015 ($350 million) and 70 per cent from 2016 ($126 million), according to data research platform Tracxn.
In a bid to resurrect its fading brand value, Koovs is raising $31.88 million fresh round. The proceeds will be used to fund expand its outreach in the Indian markets and increase its growth plans.
Koovs offers a mix of in-house as well as branded apparels, accessories, jewellery and beauty products with a blend of western style. In June 2016, it raised around $3.4 million from HT Media. According to CrunchBase, the company has so far scooped up $66.88 million.
Notably, the company clocked revenues of $25.8 million in FY17 is expected to generate positive gross margins in FY18. In India, Koovs is betting big on its private label to fight against the leading e-commerce players such as Myntra and Jabong majorly.
The horizontal e-commerce space has grown and evolved to a decent extent while vertical plays had a rather rickety ride in India. After raising thousands of crore, verticals like baby care and fashion (except Myntra) have completely failed to make a visible dent.
Currently, Flipkart claims to have over 75-80 per cent market share in overall online fashion segment through its affiliates – Myntra and Jabong. Some rough industry estimates hint that Amazon has a single digit market share in fashion segment.
Going by aforementioned figures, all other players fight for merely 15-20 per cent market share.
Koovs has been struggling to gain ground in India online fashion space since its inception in 2010 . The fresh funding may contribute incremental growth to Koov’s scale in India. However, the company has been off the track for a long time and it’s unlikely to emerge strong contender to incumbents including Myntra-Flipkart-Jabong and Amazon.