Zivame claims offline channel performing better than online: Is e-commerce overrated in India?

Seven years ago, when online shopping started gaining ground in India, the e-commerce industry went too enthusiastic. Besides, research firms added fuel to the fire with highly inflated numbers and it appeared the e-commerce companies would disgorge the entire retail space in a decade’s time.

In these years, the e-commerce segment has become more popular, but it is nowhere to the expected level. Now, the online commerce companies have majorly changed their strategies and adopted omni-channel (both online and offline) approach.

Lingerie platform Zivame, which was transforming the lingerie shopping via online sales, has re-strategize the sales policy. The platform now sells lingerie via both online and offline channels.

The company has established 26 brand stores over the last 12-18 months and is planning to set up around 100 stores by FY19-end. It has allocated an investment of Rs 30-40 crore for the same, according to ET.

Interestingly, since the launch of the offline stores, the platform claimed to witness a spike in the business. The conversion rate at stores is two times higher than online sales with the average order value being at least 1.2 times higher.

Zivame is the biggest player in the online lingerie space. It has raised nearly $50 million so far from various investors such as Zodius Technology Fund, Khazanah Nasional Bhd, IDG Ventures, Kalaari Capital and Unilazer Ventures.

Zivame believes the renewed efforts will help the company to overturn the dip in revenues it saw last year.

In FY17, it witnessed a sharp drop in sales and losses suffered by the company also increased compared to the previous fiscal. It recorded net sales of Rs 52.9 crore in FY17 compared to Rs 62.6 crore in FY16. The operating loss stood at Rs 56.5 crore in FY17 compared to Rs 53.3 crore in FY16.

However, with the new approach, Shaleen Sinha, CEO at Zivame is targeting to get to EBITDA breakeven within 12-18 months. She added that the company has grown 75 per cent in revenues as of December 2018 even as losses have been steadily shrinking.

Besides Zivame, Buttercups, InnerSense, Noida-based Clovia and Mumbai-based Pretty Secrets are some of the other dedicated platforms in the online lingerie space.

In January, Google India managing director Rajan Anandan through Lets-Venture invested in Buttercups. The startup’s existing investors Kanwaljit Singh and Anand Chandrasekaran also participated in the round.

Early this month, InnerSense also raised Rs 2.5 crore from Venture Catalysts in Pre- Series A round.

Online adopts offline

Recently, online retail platforms have shown leaning towards an omnichannel presence where they can leverage both the offline and online segment.

Flipkart-owned Myntra and online furniture retailers Pepperfry and Urbanladder are also venturing into the offline world.

The world’s largest e-commerce firm, Amazon India is making its presence felt in India’s $60 billion organized retail market.

Through strategic investment and tie-ups, Amazon has started making gradual inroads into offline retail parlance in India. In September, it picked up a 5 per cent stake in Shoppers Stop for Rs 179.26 crore.

Alibaba-backed Paytm Mall is also working on a similar approach. The online shopping platform will launch a brick-and-mortar store co-branded with Red Tape shoes in Delhi, where customers can walk in, scan product barcodes, browse and make purchases via its mobile app.