RETAIL MARKET STRATEGY ANALYSIS OF RETAIL MARKET STRATEGY OF CHUMBAK
FASHION COMMUNICATION SEMESTER 6 AARUSHI SAXENA APOORVA SRIPRASAD DEEPANJAI RAWAT DIBYAJYOTI KALITA DIVYA R V MADHU YAMINI
1
ABOUT CHUMBAK Chumbak was founded by Vivek Prabhakar and Shubhra Chadda in 2010, with an initial fund of 45 lakhs, which they had gotten after selling their house. They have ever since built a strong business around extraordinarily designed and crafted products, including apparel and footwear, bags and wallets, souvenirs, key chains and jewellery. Its range includes phone covers and a unique ‘whistle charm’, a funky bracelet. Chumbak as a brand was born when Prabhakar and Chadda realised affordable, well-designed and crafted products that could be used as accessories and gift items were in demand. While a variety of such products were available abroad, in India, buying a memento was restricted to options such as Pashmina shawls, marble miniatures of the Taj Mahal or brass elephants. They realised there was a market for such a provision. Currently, it has 21 exclusive outlets in 16 Indian cities including Mumbai, Delhi and Chennai. Its products retail at about 60 multi-brand stores.
2
BRAND FEATURES KEY EMPLOYEES Vivek Prabhakar, Founder & CEO Arvind K, Head Sourcing Somanna M, Marketing Manager at Chumbak Nivedita N, Sourcer Sakshi M, Business Operations Manager Malini M, Sourcing Manager at Chumbak Ashwath S, Sr Accounts Executive Krishna P, Manager (IT) Saumia S, Planning Manager Kartiki K, Kingchuk C- Illustrator/Visualiser Ramesh K, Assistant Manager
3
PAST MARKETING STRATEGIES Spotting trends and developing products along those lines is a continuous process. As new products are introduced, old ones, for which demand dips, are removed. The entire planning, designing and production is in-house. Initially, Chumbak started to grow its distribution through both, online and multi-brand outlets. It used the mix of Social Media Marketing, Content Social Media Marketing and Visual Social Media Marketing to achieve an online fan-base. After a couple of years, when the business was stable, its first store was set up in July 2013, in Bangalore. Seeing the idea of having its own stores working, the company set up about 20 through the next seven months. Chumbak strategized with real estate too. It looked at smaller stores 150-200 sq ft, instead of commercial spaces of 1,000 sq ft to save funds from renting too much space. Today, the brand has 20 stores and kiosks across five cities, along with presence in about 60 multi-brand outlets. Currently, online sales account for about 15 per cent of total sales. Mumbai, New Delhi and Bangalore contribute 60 per cent to Chumbak’s total sales. The company is now focusing to increase the online sales to 30 per cent of its overall earnings, and is, therefore, researching and experimenting on various technological platforms.
The company now also sells its products in Japan and West Asia. From a two-member team, Chumbak now has a 70-member staff. Its stores have 80 additional members and growing. With gross margins varying across categories, Chumbak is eyeing annual revenue of Rs 400 crore in the next three to four years.
Past Sales The Chumbak team claims that the venture was profitable from the getgo. As of 2013, the brand registered a growth of 300% year on year with a recorded revenue of 50 crores. In the first year, 2010, online sales contributed to a very little part of the business whereas offline was close to 90% of the sales. After 4 years of being in the business the situation is quite different. 25% of their online customer base directly comes from their fans on Facebook. 15% of their total sales are made from their online store. In 2014, the brand planned to increase the contribution of its online sales to its overall earnings to at least 30%. With gross margins varying across categories, Chumbak is eyeing annual revenues of 400 crores in the next 3-4 years. Also, the brand recieved a series B funding in May 2014 from private equity firm Matrix Partners as well as another round from Seedfund. Initially, Chumbak had raised 200 million dollars in the series A funding from venture capital firm Seedfund in 2012. The brand plans to set up another 50-60 outlets including kiosks and small format stores by the end of 2015.
4
TARGET MARKET Chumbak has become popular and grown phenomenally since its launch in 2010. It has come to be known as a youth-centric brand. They started out with targeting their customer base using a facebook page (their only marketing strategy at the time as it was a low budget strategy) Though the Chumbak stores focus on Metro cities and an urban youth clientele, their online stores reach over 20 cities in India including tier-two cities. Chumbak targets students and college =-goers between the ages of 18-25, and youth between 25-35 years of age.
SEGMENTATION Currently, Chumbak targets a geographic segment and demographic of Indian youth. The age group that the brand caters to is 18-24. The brand maintains an affordable yet premium pricing range as their main target is the youth. However, 2014 saw an expansion of the target market as Japanese companies approached Vivek Prabhakar to extend the brand’s reach to Japan. Their quirky, colourful, fun and eccentric products based on the theme of India are synonymous with personality, likes and dislikes of the youth. They try to target youth who will engage with the brand and be loyal and passionate customers.
6
MERCHANDISE PRODUCTS RANGE Accessories Apparels and Footwear Cases and Sleeves Collectables Lighting, Tableware, Cutlery Wall Art, Decor and Furnishing Gifting
1
1
7
MARKETING STRATEGY 1. Chumbak conducts a weekend contest every week which include themes that are related to India and its essence. For example, ‘Which are your most memorable Bollywood movie dialogues’ and ‘What would be the funniest English translation?’ Also, instead of giving away products as prizes, they give discount vouchers which are then redeemable at the web store. This serves as a useful strategy to convert fans into customers. 2. The brand promotes the store URL in all their packaging so that it creates potential online customers. 3. Chumbak also built product films like ‘Yogi Baba’ and ‘Everybody loves everyone’ to include the new products to their target base.
From the very start, Chumbak maintained a low budge marketing and promotion strategy using social media extensively. Vivek Prabhakar, Co-founder says,” Our strategy is quite simple, it is to be social – however silly it sounds, it is true. Conversations are a part of our DNA and that’s something that shows in our ocial media strategy as well. We feel that in today’s day, where the average person has so much access, it is really important for our business.” The Facebook page is responsible for 25% of the online revenue that Chumbak generates. The Facebook page is a platform that enables his team to have a two-way dialogue with customers in everything from product appreciation to mashing of ideas to customer service issues. Encouraging participation from fans is a big part of their marketing, especially to gain customer loyalty. Chumbak ha had a great run so far persuing a good hybrid model as a strategy, i.e selling both, in online and offline space has benefitted the brand.
8
1
COMPETITION Chumbak, a leader in quirky, kitschy Indian-inspired goods, has several emerging competitors. The most prominent among these include e-retailers Bewakoof, Happily Unmarried, and The Elephant Company. Similar to Chumbak, these brands focus on a specific design philosophy: eye-catching, kitschy, bright Indian-inspired graphics. With vivid colors and cheeky slogans and illustrations, the products have a cheerful, humorous presence. These quirky brands have understood an increasing interest in cheeky, unique aesthetics that are synonymous with a new Indian identity.These companies are proud advocators of a newly emerging side of India – a side that is fearless, fun, and not afraid to laugh at themselves. This philosophy is the cause for the rising popularity and success of such brands - and Chumbak’s competition is catching up. Bewakoof Bewakoof creates apparel and tech accessories for a ‘young, astute Indian with a new approach to life in mind’. Their apparel features modern graphics, contemporary styles and fits, cheeky slogans, and unique typography. Their mobile cases follow the same design aesthetic, keeping a young perspective in mind.
HAPPILY UNMARRIED
THE ELEPHANT COMPANY
COMPETITON BEWAKOOF
TAPPU KI DUKAAN
• Happily Unmarried • The very name of the brand is tongue-in-cheek, which is prevalent in their design sensibility. With products like the ‘DesiShotglass’ and ‘Kaho Na Jar Hai – Love ki cheat sheet’, the entire range is likeably wayward. The brand focuses on quirky text, colorful illustrations, and vintage-inspired themes. They design a wide range of lifestyle products, with collections ranging from furnishings, accessories, stationery, and bar wares. • • The Elephant Company • The Elephant Company takes a slightly more sophisticated spin on Indian kitsch. They infuse Indian principles with a global, artsy aes-
1
13
NEW PRODUCT CONCEPT Product Description:
About the design:
Chumbak started with souvenir products and currently caters to a wide variety of products. In footwear segment they only provide flip-flops and thus plan to come up with a new range of graphical sneakers in near future. These sneakers will be unisex and will have the basic essence of Chumbak, that is, they are funky, playful, quirky and stylish. They are largely inspired from Indian traditional motifs and caricatures. These sneakers will be comfortable, stylish and value for money which can make them an instant hit among the consumers.
They are always thinking of more silly stuff to do, better briefs to come up with and a million topics and trends passing through their heads. This inspiration comes from just looking all around them. India is full of amazing sights, sounds and smells. They look at the most random stuff and come up with what they do. They keep tweaking their designs till they are happy. A single product typically goes through many iterations. For something to become a Chumbak product, they typically cover the Chumbak logo and have it go through the design test. 9/10 people should recognize it as a Chumbak product without looking at the logo. Then they know that they are consistent!
14
1
Need:
Pricing Strategy:
Sneakers are known for being sporty, fun and comfortable. However, no brand in India offers such product. Chumbak plans to fill this gap and launch a new range of stylish and funky sneakers. Also Chumbak only offers flip-flops as of now that cannot worn to all the occasions and place. Hence, consumers would like to have more options for completing their quirky look.
The new range of sneakers from Chumbak will be launched according to the Market-Oriented Pricing Strategy, i.e., the company has done an extensive research about the competitive brands which offer sneakers. In market, the price range of sneakers is between Rs.400 to Rs.15,000 and the company plans to price sneakers in a range of Rs.1,495 to Rs.2,995 so that they are affordable without compromising with the quality.
Target Market: It includes students(18-24) and young-adults(25-30) who like to experiment and don’t want to settle just for formals and shades of grey. The quirky, colorful, fun and eccentric design based on the themes of India are synonymous with the personality, likes and dislikes of the youth they target.