The R6,500-crore apparel firm Arvind Ltd on Tuesday announced an e-commerce platform of its own as the branded apparel business moves online at a tremendous pace and major brands generate around 50% of sales from the various e-commerce websites.
The company has created a Bangalore-based subsidiary called Arvind Internet (AIL) which will function as a startup and create an entrepreneurial environment, the company said. The e-commerce brand, which will be called Creyate, aims to generate Rs 1,000-crore revenue in three years. The online fashion, footwear and accessories market was valued at $559 million in 2013 and is projected to reach $2.8 billion in 2016 growing at a CAGR of 71%.
“We have been building AIL over the past one and half year with 60 people and an investment of Rs 20 crore. Our turnover from e-commerce sites have reached Rs 100 crore a year. E-commerce is a large part of the market and we cannot let others to decide our destiny. Moving forward, e-commerce will be a disruptive force and is a big opportunity. This will be central to our strategy. We will look at organic and inorganic way to grow,” Kulin Lalbhai, the executive director at Arvind Ltd told FE.
Creyate would help build a unique own fashion identity. The online platform can create garments on a 3D visualisation engine and is like having a very own factory at your fingertips, the company said. The platform will help create more than 100,000 unique products, it said.
The company's other subsidiary Arvind Brands is a Rs 2,500-crore business, which sells its own clothing brands apart from holding the marketing rights for several international brands. The company has more than 130 brick-and-mortar outlets and sells the brands through online fashion portals like Myntra and Jabong.
According to Arvind, since the products sold on the platform are custom made and its own, the gross margins will be different. “For the regular e-commerce companies, a lot of cash burn happens in customer acquisition. We wont invest to buy quick revenues. And being a vertically focused website, our cash burn is going to be limited," said Lalbhai.
The internet company will house other businesses and will launch a branded online store in a year. "The world is moving towards personalised products and the platform will try to re-imagine how people buy clothes. The company's formidable offline strength will be leveraged for the e-commerce business," said Lalbhai.
Creyate has plans of launching