eShakti, an online apparel firm that is targeting Indian market has raised $3mn from IDG Ventures. eShakti makes customized, designer clothes for women and so far has focused on US market. The company plans to use the funding for scaling up operations, expand to new product lines and focus on Indian customers (with launch of new brand Zapelle).
A few days back, Exclusively.in which raised $16mn moved from members to traditional ecommerce business model:
“We saw the future of sales shifting on our site from a members-only to an open site due to an overwhelming demand for our products that short-lived flash sales could not meet. We felt the best way to service that demand was to move away from a consignment model in order to provide fully curated collections with a much broader selection and a full range of sizing to a wider consumer base.”
And that’s the challenge with niche ecommerce business models in India – that is, you cannot grow the segment exponentially (I shared the sentiment here also: “When it comes to niche categories, you cannot grow the segments exponentially. That’s why people prefer doing everything.”).
Once ecommerce companies raise funding, the pressure is to show sales numbers (i.e. revenue) and not percentage of (niche) category market share. It’d be interesting to see how eShakti keeps the focus given their business model.