Funding is a strategic approach according to the masterminds behind Koovs. They have been investing big in the company to increase brand awareness and maximize their reach in the country.
Till January 3, 2016 management has mainly focused on:
Koovs.com, the online lifestyle venture raised a total of Rs. 186 crore, that is £20 million or $28 million. Investors committed these funds for the purpose of stepping up the fashion portal’s marketing and working capital spends, said its UK based Koovs plc. on Wednesday.
British businessman and now politician Waheed Alli and Nahata family mentioned at the start of the year that they would invest $5.4 million into the firm, but prospective investors were not named. However, it was revealed that Koovs’ very own directors will pitch in with funding requirements.
Mary Turner, the CEO of Koovs said, “This fundraising is a part of our planned growth and will allow us to continue to build our brand, develop our customer offer and deliver our strategy to become India’s number one western fashion destination by 2020.”
These funds are a part of the ecommerce company’s strategy to reach its three year period target of £35 million.
Koovs is a part of a booming market in online retail. Fashion apparel and accessories is one of the biggest online category so far. Myntra and Jabong the major competitors Koovs has to take on to become number 1 to the Indian online consumers. Apart from these fashion centric marketplaces Koovs also has to deal with other existing and new ecommerce players offering apparel and accessories for men and women.
Gaurav Nabh, new marketing director at Koovs, mentioned in an interview that there were no marketing challenges in terms of the category. He supported his claim by simply saying every time they put out their collection, it seems to go well with the public. However, their main challenge is creative, that is to predict what consumers will buy in 6 months from now, he said. There is enough data and user technology, which can help predict these trends. So a collection can be accordingly designed around that, he continued.
Koovs plc. was created by Waheed Alli and Robert Bready, a retail industry executive. It went live in the London Stock Exchange’s AIM market in 2014. Back then Koovs plc had a market cap of £44 million, but now it has been reduced to £14 million only. As a result the new fundraising proposed could result in extreme equity dilution.
Koovs India was set up as a general ecommerce business in 2010 by Manish Tewari, Amit Shukla, Rajesh Kamra, and Kanishk Shukla. But in 2011, the Nahata family took control over Koovs India’s interests. At the start they dealt in the sale of mobile phones and other electronics. It was only later on did they divert their attention towards fashionable apparel and accessories. And now they specialize in online retail specific to this category with a mix of private labels and branded products.
At the beginning of the year, Koovs witnessed a 3x jump in sales. They had their brand awareness campaign from 2015 to thank for it. By January 3, 2016 they managed to make sales worth Rs. 29.5 crores.
This month they announced their gross merchandise value (GMV) was worth Rs. 98.1 crore by the end of the financial year (31 March 2016). Compared to last year’s numbers that is a 189% increase. In addition to that their conversion rates jumped 55% and traffic more than doubled.
Koovs plans on breaking even by 2019 and acquiring a GMV of around 100 crores (a goal it is really close to achieving). They also plan on expanding their warehousing facility from its current 40,000 square feet to 100,000 square feet.
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