Craftsvilla sees itself at profitability by 2017 & as India’s leading ethnic brand

Promises of profitability are made every year by online retailers. This year,

• Urban Ladder said it is expecting profits in 2 years.
• Flipkart cut down its spending and changed its business model to inch closer to profits. The etailer even gave its marketplace ads more attention to speed up its approach to profitability.
• Myntra got rid of its non-performers to make sure nothing is in its way towards destination profits!
• Shopclues’ planned for profitability by holding its purse strings tight and backing its sellers in every way possible.

Craftsvilla is also looking to turn profitable. The online ethnic store plans on achieving profitability by 2017. It intends on getting there by growing its business.

The company’s Co-founder, Manoj Gupta said, “Last year we focused a lot on scale of the revenue and we were not profitable. This year we are completely focused on a decent growth, but very healthy bottom line. The matrix revolves more on bottom line now rather than top line growth. Next year, once we achieve profitability, we would again start to ramp up our sale.”

When it was founded in 2011, Craftsvilla followed the heavy discounting trend and strived to meet ethnic clothing needs of consumers from across the country. Once the industry started changing its models to achieve capital efficiency, co-founders Manoj Gupta and his wife Monica Gupta emphasised on efficiency improvements taking calculated steps towards progress.

Craftsvilla’s planned path to profits

Gupta said, “We are a very capital efficient company and we are looking to become profitable in a few months, in next year. Our charter of growth is profitability, unit economics, capital efficiency, cost of financials, GMV (gross merchandise volume) and others.”

Craftsvilla acquired PlaceofOrigin, in February this year. It is a Bangalore-based online marketplace that sells Indian sweets and snacks. The company acquires its ethnic eatables from a variety of producers from all over the country. PlaceofOrigin follows the same marketplace concept where sellers use it as a platform to sell their wares.

Craftsvilla is using this acquisition to expand into the online food business. Since the PlaceofOrigin marketplace specialises in local food, it allows Craftsvilla to stick to its ethnic theme too.

The ethnic ecommerce business is also trying to expand its overseas market share. For this, it is aiming ethnic apparel towards Indians outside the country. Within the country, it aims to increase sales by offering Ayurvedic products, home products and other local goods to consumers.

Craftsvilla has gotten into the logistics business too. With the help of its logistical acquisition, Sennd, the firm now has better logistical operations. It is also working on reducing product returns and improving product pricing.

Where does Craftsvilla stand so far?

The online ethnic platform:

• Has over 5 million products for sale
• Receives 80% of its sales from the ethnic fashion category
• Sees 60% sales from Tire II and III cities
• Has 80% female consumers
• Values average orders at approximately Rs.1,400
• Offers ethnic food to 10,000 PIN codes and caters to over 20,000 PIN codes otherwise
• Has $54.5 million as investor funding

Craftsvilla claims it is not looking for any more funding. Currently, it is focused on attaining profitability. Once it manages that in 2017, the online retail store plans on obtaining fivefold business growth. The firm’s future plan is to become the country’s leading ethnic brand irrespective of the category.