How to Build a clothing brand and make 500crores in India? ft. Siddharth Dungarwal | Snitch

it took Westside 12 years to reach 50000 cror Zara sitting at about 2,000 cror and it took you just 4 years to go from 0 to 500 cror that is insane man snitch is not something that was born Just 4 years back right I've been in the apparel industry for almost 17 years now fast fashion brand snitch has raised 110 CR rupees in its series a funding round Mr SAR dungarwal the founder of snitch and I'm the founder and CEO at snitch it appears like you are a fast fashioned company but somehow your clothes are

extremely high quality it appears like all your clothes are expensive but they are so cheap yeah India's fastest growing fast fashion brand for men why should girls have all the fun with snitch we are a trend driven fashion brand even if Men start wearing gagas tomorrow we will manufacture a kagra right apparel is one of the most easiest business to start really but it is the most difficult one to scale fashion bands are easier to start but difficult to scale how did you still end up in fashion Revenue contribution at that time was almost 50%

just from the category of boxers what so you are a boxer company first so 200 crores in profits with 40 stores comes down to just 5 crores yeah in profit is Zara doing something wrong what is the logic behind this magical tool which is able to tell you how much revenue you could generate if you open up a store in XYZ location that is insane how is your Shar Tang experience so over the last 30 months we've grown 12x 12x yeah do these sharks really spend time with you or does their team spend time with

you how does it work so I'll tell you uh to be [Music] honest before we move ahead let me thank our partners ODU for supporting this podcast people running a fashion store isn't just about selling Styles it's about managing chaos for a trendy brand like snitch stock mismanagement piled up orders and scheduling issues can lead to Lost sales and lost Revenue this is exactly where odo's point of sale comes in with Odo point of sale shop owners get real-time inventory tracking and they never lose a sale because of stock mismanagement they can also view past

orders and easily search by customer or product ODU also helps in managing multiple cashier accounts with secure batches scheduling the staff shifts and tracking The Hours worked by each employee it also helps you run promotions on your e-commerce store sync them with your retail locations and set up store specific offers like loyalty programs or Special coupons odo's po system ensures smooth Cash Flow by synchronizing cash counters and tracking daily sales across all payment methods whether that's cash card or online and with Odo self-service option customers can order via kiosks or their phones absolutely seamlessly so

whether you run a flagship store or an online shop Odo helps you stay in complete control the best part is is that your first Odo application is free for life with hosting and support so if you want to run your store in the most efficient way possible and if you want to maximize your profits through efficiency check out the link in the description and start your journey with ODU point of sale now good morning sdat morning welcome to the Indian business podcast absolutely I'm I mean uh fascinated to be here I've been your um you

know greatest fan so so happy to be doing this with you thank you bro I am a very big fan of snitch and like I just told you off camera as well I was just about to go and do a podcast with Arin krial sir and um I couldn't find a good exact same pitch black form and bro I found such an amazing pant such an amazing pant it's pit black and it's got this beautiful luster which almost suits the Blazer and it is so comfortable dit I said you know I'm going to wear this

only and I decided that after I come back I'll just buy five pieces of it yeah okay and similarly when I was going to Bali and this is when I encountered snitch for the first time earlier I used to shop from Zara and I was like Zara it is always ahead in fashion and we would just get clothes out of there but then I started to see my bills and they were exorbitant yeah D told me that you you should go to snitch to shop for Bali and I went over there and and Bill I

don't think it touched even 20K yeah whereas had it been Zara I cannot expect a bill below 30,000 rupes yeah maybe even more yeah maybe even more correct but somehow I don't know if you are a fast fashion company because it appears like you are a fast fashion company but somehow your clothes are extremely high quality yeah it appears like all your it appears like all your clothes are expensive but they are so cheap yeah so I'm just trying to understand that when the likes of H&M and Zara are not able to produce or are

not willing to produce high quality clothes at do cheap price and even they are finding a hard time making a profit in India you make high quality clothes at affordable rates and you're profitable yeah and in this entire podcast I just want to know how the hell did you do it okay I'll I'll try to cover as much as I can uh but thanks for um you know giving that uh sort of boost um I'm sure folks in the you know office would appreciate this um I think it is really simple so snitch is not

something that was born just four years back right I've been in the apparel industry for almost 17 years now uh started with a very small retail store then got into you know trading then got into manufacturing and 2020 is when when we launched snitch uh again I will you know it'll be wrong if I say that from day one was our quality the best U you know we were not uh to be very honest I mean consumers whove bought us maybe um you know bought snitch products year 1 and two may not feel so uh

because we were very very inocent we did not really invest in a lot of R&D uh but as the company matures you know then you start taking those learnings those feedback mechanisms uh I think especially during the Shark Tank uh period right U you know orders literally spiked up a lot uh we were getting insane number of orders and you had to sort of make a lot of products you know to boost sales uh at that period I think we sort of got back in terms of the quality that we wanted to produce hence we

even faced a lot of backlash right and that's the day we took a call that we may go slower but we will make sure that the product quality uh meets at least you know the standards that we've set for ourself uh and that's when we actually went you know deep into um the stages of finding the right yarn finding the right sort of um you know um color that should be used and what is the sort of dying process and how many washes will it last uh I think apparel is one of the most easiest

business to start really but it it is the most difficult one to scale okay uh and the reason is you know one is inventory second is how do you sort of add categories for growth and third what are the right sort of categories that you want to um penetrate into right uh for us we were very sure uh from day one razor focused sharpness and um you know that we will just be a men's apparel brand uh did not diversify into women kids Etc usually a lot of Brands which were not so successful was because

they started diversifying too early uh it's not that we will never do women uh we may do women but I think you have to become a master in one first and I think the time is very very large for us uh so we chose men as a niche and then uh you know went deeper into what are the traits of men and then started you know building the entire thesis around you know what is the sort of product line how many um you know new Styles will you launch um you know how many uh what

is the depth of every SQ that you will launch in how will you build this entire business right uh again I mean we could discuss this in detail once we um you know sort of get deeper into the conversation uh but you know just to even imagine right uh traits of men men are someone who like quick Snappy things right uh you have to go out for a dinner you would go for a beard trim you know uh a slight haircut you look fresh and new uh that's very Snappy uh you wear a perfume you

know you smell good instantly you wear clothes you look good instantly uh if you ask a guy to apply you know one sort of cream for 30 days to see 2% difference he's going to quit day three so one we understood was men like instant gratification and instant gratification categories is what we were at anything that um a person wears and feels motivated confident and looks good you've cracked the game wonderful S I want to go back to your story because U like you said fashion brands are very easy to start but very difficult to

skill okay but you still chose to be in fashion so I want to understand where did the inspiration for fashion come in the first place because from the outset as a consumer I'm a terrible Shopper I don't understand fashion and my fashion sense back then was so bad that I used to wear red color shirt and um yellow color pants to college okay so you could imagine so because I come from that kind of a terrible fashion sense background when I look into a store I see so many sqs and I see so many sizes

and I'm just flabbergasted by the fact that somebody out there is thinking that this piece is going to sell when I can't even imagine what occasion would I choose to wear a particular shirt or a particular pant but then once I moved to Bombay I just realized that every piece of cloth has a purpose has an occasion has a season and then there is also this fashion trend that the world follows knowingly or unknowingly by getting inspired from Bollywood or pop culture and so on and so forth and then I began to understand that there

are just too many variables that one person has to take into consideration and then there are so many stratas of audience in India and you have to like your product is basically a culmination of too many data points which eventually make it to the store yeah and then there is wastage and so on and so forth so I'm just trying to wrap my head around how do you exactly start a fashion brand so I want to go back to your story and because you said fashion bands are easier to start but difficult to scale how

did you still end up in fashion so I'll tell you uh one key data point to look at right if you look at all the successful Brands uh which were not driven by large uh companies uh example of a man example of a rare rabbit they have become successful because they been into this for almost 15 years plus right uh it is a business that takes a lot of deep understanding in terms of you know product uh the right manufacturer how do you build a very very strong supply chain it's a pure play supply chain

business uh even if you think of um you know just snitch as an example like when I started I used to uh sell clothes in retail so it was barely you know half of this Place uh which was barely about 350 foot wherein I used to sell products in retail uh so I was in a morning College shift and post College I used to run the store from that was your store yeah yeah my store okay uh this was back in 2009 okay uh so I was um in a morning College shift post College I

used to run the store wherein uh I used to sell Surplus clothing so I used to procure these leftovers from factories bring them to the retail store and sell them since I was in college I could attract a lot of Youth and that's when I understood what do people buy right and once you you're in that seat looking at what people buy for different occasions you know what is the right sort of inventory you need to get into the store right if if there is Christmas you've already seen what people bought last Christmas so you

have some data point saying that these are the colors these are the sort of products that people will buy during Christmas same when it is a season of Summer same you know so every occasion um we exactly know what is it that a consumer would want okay can you give me some examples of the same like I'm talking about the college kid sidhar who then figured out using observation because this is exactly what wean told me about Ravi sir that because he was a Salesman for a very long time he was able to interact with

his customers and he was able to figure out what exactly is the customer wanting even without the customer being able to comprehend what he wants okay but that's still Shadi like the subset is too less but then when you're in college the occasions are too many the people are too many and their tastes are too many because they also come from diverse backgrounds Cor so how do that young sidhar find patterns to then understand what is going to sell and what will not so there are two things one is the obvious which you know you

know what is going to sell in what sort of season second is the sort of uh risk-taking ability that you build right this is the product that I will sell and you know that sort of uh is Trend setting that is what you want to or you believe will sell because you've seen some data points you know that these products are selling in China these products are selling in Europe and usually those Trends come a little later in India okay uh so using all of these it became much more easier for me to to then

decide what are the sort of products snitch never was there in my mind right uh I didn't even know the meaning of the word snitch when I actually registered it uh I'm just a bcom graduate so uh did that college phase then um you know was stuck with one sort of issue wherein you know there was a buyer who was ready to sell out a fabric uh uh I mean there was a factory which was ready to sell out their Fabric and I had a buyer ready all I had to do is do a transaction

between the two and I was making about 2 and a half lakhs at the age of 20 that was big money for me uh but I didn't have that sort of investment borrowed it from my friends and family and did that transaction but to my bad luck uh there was an audit in the factory that was supposed to ship out these fabrics and it took almost 30 to 35 days for those you know sort of stocks to move out uh by then the customer who was ready to buy denied saying said it's too late I

don't need this fabric anymore and I was basically stuck with that fabric um didn't have place to keep it kept it at a friend's garage made real small swatches of those fabrics and distributed to made what swatches just a small cutting of every fabric that I had and distributed to all the retailers that I knew there was one particular retailer in Bombay who had about 17 18 stores back then you know he called me up and he was like Sid the fabric is fabulous can you make shirts out of them I was stunned because I

didn't know anything about production he just told me look the fabric is good if you could make or convert them into shirts I may baely out of the situation uh at that point uh is when you know the real hustle started the large manufacturing units were not ready to do that very small mq found a very small unit uh in Bangalore sat there for almost 6 to 8 weeks just to understand the whole process of production uh end of 8 weeks you know designed these 300 pieces as samples first and shipped it to Bombay over

the weekend although shirts flew off the counter ended up converting that entire batch of fabric worth 25 lakhs into shirts and made 6 and half lakhs while I was making 2 and half lak selling the fabric okay that's when I realized manufacturing is a much you know bigger uh sort of a business and that is when I ventured into manufacturing and from 2012 until 2019 we were sort of running a buying house whenin we used to design manufacture and deliver products without owning any Factory uh every Factory that we work with even today is is

100% exclusive to us and we'll come back to you know those why are we exclusive or why do we choose to work exclusively with factories and you know end of 2019 is when the thought of snitch came in okay pleas 300 shirts manufacture and this costed you about 25 lakhs no I mean 300 shirts would have costed me roughly about 400 per shirt so that's 400 per shirt yeah that's roughly about let's say 1.2 lakhs if I'm not wrong yeah 1.2 lakhs short B this then got sold for uh I had sold it for about

450 okay and the retailer must have sold it for maybe 12200 1 12200 and that is when you understood what that you know while I was selling just the fabric I was making say about 10 Rupees per meter okay but when I converted that fabric into a shirt I made 50 bucks per shirt so you understood the importance of value addition absolutely got it now take me back to that store of yours because I'm trying to understand the fashion entrepreneurs Acumen from that college experience of yours you said that you know in summer people buy

this kind of shirts in Winter people buy these kind of clothes but then there are so many colors so many sizes can you take me back to those experiences where you able to pick oh you know what these three shorts will 100% sell which are true even to this day I think luckily we are in the men's fashion space right and there are not not too many things there are very few men who will wear a red shirt with a yellow pant right correct U men have obvious traits so it becomes much more easier for

us to understand um you know what is it that someone's going to wear but there are a certain products that we want to you know be the first person to set that Trend and make things work okay uh and that is what keeps us you know defined uh and you know apart from um the the regular sort of brands that were U always available two three things that you have to always think of is one while curating a product who is the sort of person that you're targeting to um you know what is his traits

like is he a college goer is is it the person who likes to party a lot uh is it a person who is working a lot uh I mean is going to be in office and then start building products according to occasions uh from morning to evening there are you know uh three four things that you will obviously see as soon as you get up you maybe hit hit the gym so there's Sports Weare there what are you going to sell uh to a guy who's you know hitting the gym um post that you're going

to either go to college or go to office what is the sort of clothing that you will wear and from there you start to understand that how many what is the sort of share in in one's wardrobe that you could uh you know sort of capture and keep building categories towards that got it so it would be gym college party and I would also say hostel yeah host basic clothes I mean it could be uh occasions like you know there's a wedding season um I mean these days concerts are there so I mean people do

buy a lot more products for concerts so I mean you should just be ahead of time and realize that what is the next big Trend got it so the first thing that you did is you understood what are the scenarios in which your customer would require clothes and then you define these scenarios as gym college party hostel and let's say something like a concert or a wedding yeah now after you zero down on let's say college because gym it's again pretty obvious people are not very fashion sensitive when it comes to gym they would just

wear a black or white it would still be fine but when it comes to college now that's a very big subset yeah as an entrepreneur back then without the snitch experience how did you go about choosing the clothes to understand that this is going to sell and this is going to be my bet of experiment so I mean uh one good thing that I've learned is always start very very small right so I never used to procure like 100 pieces in one single design it was always 10 pieces or 20 pieces so that my risk

taking ability is higher and the chances of that stock not selling is lower uh and plus chances of having a Deb stock is lower okay so starting very very small gave me that ability and I could immediately know that if I've gotten 10 products three are super hot selling products two are mediocre and five may you know be something that I will have to live with for a while or maybe sell at a discounted price okay U so you have to really identify and uh see what are these three products that sold really well why

did they sell really well and it's not necessary that this is selling well today it may sell well you know uh maybe 6 months later also you so making the right sort of quantity or buying the right sort of quantity is very very important okay uh so whenever you start start really really small so that you understand the pattern and then start doubling down and it's very difficult to sort of of know why is it that you know these products are selling versus this is not selling I may have a gut feel that you know

these will really sell well but often uh you know it it doesn't and that is why you should always go by data and not always by gut got it so these three two and five designs that you picked were the three designs like Basics like black white blue or how was it so again depends on the sort of season it is at usually because it's men's we it is going to be these common colors uh but during Seasons we've seen uh you know last year mauve was a color that sold the the highest for us

like any shirt or t-shirt in that color was flying off the counter so you should know what are the right sort of colors you should know what are the right sort of silvet that will sell like oversized t-shirt is a new silvet never existed but suddenly came and you know now you see everyone in oversized t-shirts uh we were the one of the first Brands who started coord sets for men which is a paired clothing uh again um saw a lot of brands in um Europe and China manufacturing these and uh people adopting to it

um starting really small there also gave us that sort of confidence to then build a new category itself from coords right and there have been instances like these in every single category that we've launched got it so what do you saying is color silvette and Trends from Europe and China will help you determine these things got it so now understood what a uh how did the scrappy entrepreneur s think while he was back in college let's now go from the scrappy entrepreneur sidath to now a seasoned entrepreneur sidat and the wisdom lessons that you would

like to provide to an entrepreneur who's just starting out so in the next one and a half hours let's try and decode a blueprint from the wisdom that you acquired from snitch on how to go from 0 to 10 CR rupes got it okay let's start with the snitch story derive lessons and then derive call to actions okay let's start with the snitch story after you did this value addition thing you understood that you were making 50 rupees a unit as compared to 10 Rupees a unit yeah then what happened so um then I got

into full-fledged manufacturing so from 2012 until late 2019 I was running a buying house wherein we used to design we used to manufacture and deliver for Brands across the domain right done productions for large Brands as well as very small sort sort of you know family-owned businesses uh we were like a One-Stop solution for them so if you had if you decided to start a brand uh and if you would have come to us we would have first spoken about what is the sort of you know customer base that you want to cater to uh

what is the sort of price point that you want to sell a product in what are the categories that you want to do and then curator collection bases our um you know um Trend analysis uh saying that you know these are the product that we could design for you and manufacture as well as deliver and that's how we started that entire business um 7 years scaled that business to almost 70 80 CR perom sort of a business but back of the Mind always had a thought of starting something of my own right uh that's when

the idea of snitch came in I was just sitting one day and thinking that uh I've been doing this for 10 years every brand that I've been working with is following one traditional pattern which is making collection season wise there is a you know summer collection there is a winter collection or maybe spring summer autumn winter uh and every brand is following the same pattern uh while Brands like like hnm and Zara were coming into India and disrupting the traditional model model of business right uh just asked myself why aren't Indian Brands doing this understood

that the supply chain is broken you have to be somewhat vertically integrated to sort of build a good fashion brand uh that was the thesis behind starting snitch so typically if you look at any traditional Brands right they might take anything between 8 months to 36 months to even decide what is the sort of collection that they're going to launch what is the sort of designs where will they manufacture you know what is the quantity that they will do what is the price point and the entire supply chain was very very broken right because of

the complexities that they've created over so many years uh while we could do it within 20 to 30 days today got it and that's a very very strong differentiator so that any Trend that we spot on uh you know we are able to bring that out within 30 days test it and then scale before others could catch got it s let's talk about the supply chain first and then try to understand the nuances behind it can you take me from the beginning till the end which is I would consider the starting point to be the

production of yan all the way to the piece of cloth being sold to the customer yeah walk me through the entire supply chain it would first be design then would be procurement then would be a sampling stage then it will be various R&S that you want to do with the product like then testing I mean normal you know an fpt report and a GPT report which will actually tell you if you rub this garment for 2,000 times will it last or will it get peling or will the color fade off will it shrink if it

will shrink how much will it shrink all those details are found through the these reports and then you know you decide upon which Factory is the best to manufacture this product and what is the sort of mq you want to uh order this for so there are two um you know two sort of procurements that you could do one is a job work second is an fob order job job work is largely you are procuring all the raw materials finding a supplier uh finding a man a factory that could manufacture that at a fixed cost

right if I have to manufactur a shirt maybe I will pay 150 rupees he has to just um you know sort of use his Factory to manufacture it the stitching process the packing ironing Etc uh that's one side of the supply chain the second is uh I go to a large buying house I tell them this is the tech pack this is the sort of product that I want they will then figure out all the raw materials you know they will um figure out which Factory will manufacture and then the cost of that may be

approximately 8 to 10% higher because they will obviously have their own margins got it fob order BR so uh fob order um largely is that you've given an outright purchase uh where this job work is something which is more like youve procured all the raw materials and then given um you know uh to A supplier so there is design procurement sampling R&D where the testing happens for example if you drop the fabric 2,000 times will the fabric deteriorate then you've got the factory where you put out anq saying that minimum order quantity is 1,000 units

or 10,000 units or whatever and then it goes to the wholesalers depends I mean you could do wholesalers you could do multibrand Outlets you could do direct to Consumer there are various touch points got it then it goes into the then it goes into the retail Channel whether that's wholesaler or the retailer or d2c got it and you mentioned buying house 10 to 15% roughly 10 to 15% in your cost of boots let's start with the design process s how do you how like I spoke to the I spoke to one of the urbani guys

also that they've got I think 1,200 designs or something like that I was like how do you do it and then he mentioned some very complex uh data scraping process on how they go about it and how they ptic designs please walk me through this process so I mean with us ear we were very very manual so we used to spot Trends uh maybe you know looking at websites around the globe plus there is um you know an Institute called wgsn which largely Works upon the future Trends um you know read those sort of analysis

and then you know uh even look at Celebrities or maybe large influencers uh and um you know then curate products for example first you have to think of a category uh baggy denims were not being sold 5 years before it was only skinny denims suddenly a lot of celebrities started wearing baggy denims uh a lot of brands in the Europe and China started producing baggy denims and that's why baggy denims are in Trend today right so you have to be very sharp at you know observing these points and that is how we started today we've

built our own you know scraping tool again which could scrape around everything that you want to actually look at you could look at the top keywords that are trending on Google you could look at Instagram hashtags which are trending you could look at um you know Global Brands uh you could look at you know wgsn reports um so you could wjsn wgsn okay GSN yeah that's again an Institute so you we could probably scrape everything that we want and the tool automatically curates a mood board for the design team to work upon right you build

this in house yeah okay absolutely but if I were to be an if I were to be a starter yeah can I buy a subscription which can help me scrap through this data I think there are a lot of tools which are readily available which is as low as I think 10,000 rupees a month okay do you do you happen to know some names um I don't remember but I'm sure um you know even a chat GPD could solve this today I'll find it and put it on the screen yeah no I mean even even

if you ask Chad GPT today what is going to Trend it's going to scrape everything that it knows and give you an answer got it so if you have to figure out your design it's going to be a function of data scraping which is going to involve keywords hashtags Global Trends and wgsn instute yeah and then we marry it with our data which is what was it like last time uh same period what was the sort of products that was selling what are the common trades between the two and then decide upon which are the

ones that we are betting higher on and which are the ones that we are going to bet lower on right we look at almost 20 30 data points across every product like if it is a check shirt how many inches of checks is it uh that sold well last time where is this time if it was a caller was it a button down CER or a spread CER uh did shirts with pocket do well or without pocket so there are certain data points that we know obviously uh from the sort of historical data that we

have over the last four five years use them uh with the current sort of trend and then curate a collection accordingly s you spoke about choosing the category carefully like I was speaking to Vishal from Biryani by kilo and he told me that the first thing that you have to keep in mind is it has to be a category that is very very regular absolutely for example Chinese is now very very regular biryanis are very very regular because you can just count on your fingertips four or five occasions where you would have a Biryani specifically

right and then you also mentioned that this has to be a category which can scale very very quickly for example a chart is quite difficult to scale as compared to a Biryani so he said after you understood which category is going to scale and which category is growing in terms of market share then you identify then you identify which category does not have Brands which can command trust for example in Chinese about 3 to four years back there was Mainline China and that's it but then we realized that affordability isue tast consist and then from

juming told me that so if there is one brand over there it's not a threat it's an opportunity because now there is a space for another brand to come in so I've understood that if I were to choose a category in food my blueprint has three steps find something that's regular find something that has a higher ticket size so that it can accommodate for margins as we scale and most importantly find those categories where there is lack of trust either due to the existing brands or due to lack of brands in the first place I

will add in another very important point that you have to always build for is agility agility um you should be very very agile when it comes to your supply chain that can this be converted into something else which is trending very very soon without being bother bothered about what is the sort of dead inventry that you hold in other categories right can you give me an example um for example denim is a category uh and you know baggy skinny boot cut Etc are the subcategories within it uh for example if you've decided that I want

to start a denim brand then you would obviously look at data points which are readily available and say I will make 30% baggy denims 20% you know skinny 20% boot cut uh maybe 20% straight fit uh and then sort of decide upon the sort of styles that you will make uh say there are obvious colors that you will make you know there are key elements that you would want to add which becomes an identification to your brand and then also how will you sell these products with that great sort of aspiration that you want to

bring upon uh you need to be agile saying that you have bettered larger on baggy denims what if the trend shifts and suddenly boot cut denims are selling higher right uh if you are stuck with that mq issue saying that I've manufactured so many baggy denims and now for you to Pivot and manufacture larger sort of boot cut denims will be an issue because you'll have obvious cash flow issues uh so you need to be really really smart and that agility that you have to sort of inculcate from day one that I'm going to go

really slow learn from data points and then start scaling and I need to at any given point not hold inventory which is more than say 60 days or 90 got it does this mq problem happen because people are often lured by margins because th% 10,000 is that the reason why entrepreneurs get tempted to not really I think it is a problem uh with the entire infrastructure itself right there are very very large manufacturers who come in with so much of investment that they need certain mqs for their batches to run uh while you know there

are very very small manufacturing units where they might not be skilled enough or they may not be compliant enough enough to sort of um you know um suit you uh because you need basic compliances you need basic um you know sort of machineries to do it uh so finding the right sort of manufacturer is very very difficult in India today okay how do you find the great manufacturer I think um the number one thing is you need to trust that that guy uh is like a co-owner and is um you know buying the story that

you're selling like when I started the factory that I went on to the first time I was manufacturing 2,000 shirts for him with him um you know back in 2009 uh till date I'm I you know he's one of my largest supplier and today manufactures over 1 lakh units per month for me uh he has always believed in my vision he has always invested in his manufacturing unit to upgrade it Bas is the sort of belief that I've um you know built upon um certain period and then um you know he's almost like a partner

today who's working with us very very closely in terms of what next what is the Machinery upgradation that you want to do and we've built these factories so agile that today my shirt manufacturing unit could also make pajamas my denim manufacturing units could also make you know cargo pants or chinos because the Machinery used is very very similar it is just the skill that you have to develop in terms of the labors who work there uh so any so today when when when we speak about working with manufacturers exclusively the advantage that we hold one

we are solving a lot of problems for the factories right if you're a manufacturer uh you might have 8 months of full capacity utilization 4 months you may be um you know out of uh that uh threshold and you may burn uh money right we went to manufacturer we said look I'm going to cover you up for 12 months even if it is a peak season or not I'm going to pay you this minimum uh amount of um you know uh uh money for so many pieces being produced one we solve that entire headache for

him of not being dependent or not be thinking about um you know capacity utilization two if he's working with seven eight different brands every time a new brand gives him an order he has to change the entire sop that has been because every brand will have their own uh Sops we've standardized that saying this is one single sop which you have to work upon okay uh three we do a lot of skill development inside the manufacturing unit itself uh while it comes to upgrading their you know um labor skills upgrading their machineries Etc we help

them do all of that and four the factory has to just look at the basic compliances and um you know sort of uh pay wages at the right time everything else is done uh by our teams so that sort of solves everything for him and it's a pure play partnership that we do got it you mentioned something about a single sop what does that mean so U every brand has their own Sops right like they might like we as a brand we use one standard label you know for every product that we manufacture uh there

is a single tag even if you look at Global fast fashion brands you'll see a very very similar trait because speed increases once you have a um the right sort of set of label tags Etc then you're sorted for at least a certain period of time you don't need to keep changing uh while traditional Brands and you know Brands which are at higher price points who want to really sell aspiration would keep tweaking with their label tags with every single collection that they launch which adds complexities um you know to the factory is he has

to again you know sort of do samples for that again has to run through the company the company will come back and say these are the changes so it is too time consuming uh that is just one aspect of a garment right now imagine there is thread you know what what sort of thread to be used which is the brand so we've standardized that fusing what is the sort of fusing to be used so every garment requires different sort of fusing you can't put you know one fusing in all the garments you know you'll have

either bubbles or it may be too stiff Etc so we have standardized that uh washing process we've standardized that so every element needs to be standardized and there's a set of sop that we've derived now saying this is the factory which can produce this at its best quality and that is why we choose to give it um you know to this manufacturer got it so if I were to summarize this the basic theme says that you need to the manufacturer needs to act like a co-owner of your brand yeah and the way that is done

is that you work with them to design easier sop so that their job becomes easier number two you help them with skill development and this is something that Japanese companies often practice with their Partners whereby they help them with skill development they help them with debt also sometimes which makes it easier for the partner to trust you and to deliver their best and you also mentioned compliances and wages if they can comply with one two three compliances and they can also make sure that all the workers are paid on time that's a great green flag

whereby you can choose that manufacturer having said that that is there like a website where we can actually go and look up all these manufacturers I think today uh it's become much more easier because these factories have started promoting thems on Instagram right okay like you will keep finding them in every 10 or 15 Scrolls that you'd make saying that hey I'm a manufacturer I make t-shirts for so and so Etc uh now the problem again is because he's out on the internet and you know sort of um showing it to the whole world how

do you trust him that he will exclusively work with you you have to start really slow uh start small by taking say 10% of his capacity and then build that trust over a period of time saying that over a period of time if one the product that he's manufacturing are matching my standards there are no customer complaints there are no sort of red flags that I see I will start scaling this manufacturer and then once I utilize say 90% of it then I will go to another one but again the complexity of apparel is so

large that every category requires a different sort of factory like t-shirts there are certain you know sort of machineries and certain sort of uh areas where you would find them right like thur Lana are the obvious places uh for woven it is different for Den it is different so you have to first choose the category and then start looking at the sort of factory that you want to work got it now let's go back to category selection manufacturer has to be easier it has to be more standardized skill development needs to happen with the manufacturer

and then compliances and wages are very very important and then how do you find them just go and say manufacturers of I keep telling people right consumer businesses can't be built on an Excel sheet or in an office you'll have to go out there find you know 1 5 10 20 50 manufacturers unless you find the right one is there an auditing company that can help us understand the compliances of these manufacturers so that they can give them a green flag because going to a manufacturer and going deep into their Factory to understand the nuances

of compliances and wages is going to be quite difficult so I'll I'll tell you honestly when you're starting off that's not the greatest thing that you should be bothered about the first thing is can you make the right product compliances can be solved during the go right uh you could catch hold of any agency and tell them you know start working with this Factory and make it compliant now let's go back to and for design you mentioned that keywords hashtags Global Trends and wgsn sidat can you tell me the top three or four categories that

an entrepreneur can start with right away like you mentioned for every category the processes are different yeah the manufacturing costs are also different and the supply chain is also different then we'll come back to why the supply chain is broken just like Vishal said Chinese Biryani and uh Burgers is a growing category what would be your top three picks in fashion industry which is blowing up so I think in terms of category it is obvious that t-shirts is number one number two would be cargo pants now because they're trending uh number three would be denims

because they're you know ever um they they're going to sell 365 days got it anything else that you wouldd like to add let's make it top five then I no I mean then it covers everything like you could add shirts you could add um you know chinos uh but again they are a little more complex and have mq issues got it take now let's come back to the supply chain and you mentioned supply chain just to recap this it's design procurement sampling R&D where the testing happens then it goes to the factory the mq is

decided and then it goes into the supply chain key customer from a wholesaler or a retailer now sudat why do you say that the supply chain is broken so um what really happens like I just spoke about right um every Factory that you have to work with has to be uh either exclusive to you if you want to build a very very large uh apparel brand and the reason why I say that is one if you want to build a fast fashion brand you will start with lower mqs every large manufacturer that you would go

to will not accept that low mq uh then you have to again you know go back and compromise so by sort of working exclusively with factories we solve that problem uh traditionally this was not there we sort of came in and said let's you know just take the entire Factory so that MyQ because I'm the owner of the factory indirectly right I could decide which design what is the sort ofq that needs to be manufactured or because I've covered him for 30 days and told him I'm going to pay you anyways um so there you

know the mq issues is is solved to be able to get to that threshold of being able to solve for the mq issue what do you think is the right amount of capital to start with I think I'm a strong believer I started uh with 11,000 rupees in my pocket uh so I don't think so a lot of capital is required you could start really slow by you know just trading a few apparel just to understand what sells and what does not sell right even if you had to find out 10 manufacturers around you go

there you know request them to sell their leftovers find retailers sell them and see what is it that is selling then you understand you know okay these are the products that I will tap upon and start building a supply chain for it to manufacture got it if you go to a factory if you go to a manufacturer today and you look for their leftovers and then you pick those leftovers and then sell it to the retailers you would make a margin absolutely okay can you can you give me the economics behind it Mar easily about

20% if you were to pick any one of these categories out of t-shirts cargo pants and denims how would you do it can you give me an example so if if I had to pick up T-shirts for example I may go to you know thur find a lot of large manufacturers who will obviously have leftovers with them uh if there are two um sort of things that you could do there one they may have leftovers in terms of fabric so you could tell them anyways you know this is lying with you I will give you

my designs can you print these t-shirts for me in you know 20 30 50 pieces batches and um you know um sort of I will start scaling it with you as in when you know I start growing the second is he may have some readily made t-shirts which is made for XYZ brand but you obviously can't buy it outright they will cut these labels Etc and uh then you need to sell it to retailers who sell these Surplus garments got it yeah I that is what I used to do back in 200 9:10 uh came

in uh I still remember Sharma transports bus which used to leave at 10:00 p.m. and drop me at 9:00 a.m. in um um I think Borelli or somewhere and then you know take a local train go to these car market um you know every every sort of supplier there would know me even till date because I've gone to every shop tell them that you look I'm from Bangalore you know uh this is what we um sort of sell and um build that entire thesis around um you know getting good credibility to your side how do

you get this credibility I think it comes over time uh it does not come just like that um you know I always say that I've built this entire business on my suppliers money suppers money yeah absolutely because the sort of Goodwill and trust that I've built over the last um you know 17 years has now enabled me um you know to make my cash flow really really positive can you talk about your actions and I'll give you an example of the Creator industry in the Creator industry the way it works is that our a our

partners are basically agencies and Brands and the problem over here is that every brand has a different requirement and they're extremely fussy but there are some brands that are so good that they would respect your creative Liberty they would work with you just like your factory owner like a co-owner and they would make sure that you produce great content but they would just give you a mandate that you know these are a constraints if you can just operate Within These constraints that would be great and that gives us an insane amount of motivation to produce

the best video possible for example scaler is a brand that we work with they give us all the Liberty in the world to pick the video and they say Stefan says if you think this will work I will bet my money on it and it always works whereas there are some Brands which will confuse us with their own constraints and they would put so much limitation that they don't let us be creative eventually the video doesn't perform and then they would play the blame game similarly when it comes to the agencies you know they look

for the small buck for example if you do a deal of 100 rupees they get 20 rupees out of it but here's where they play with transparency they would tell the brand that this Creator is charging 200 rupees they would take 20% from the brand and then they would take 20% from you as well so if you think about it they made more money than the Creator yeah so the brand then gets confused because the brand thinks but 200 r that is terrible so the brand doesn't end up working with the Creator as a result

the relationship deteriorates and then what we've realized over time is that in the race of this small buck the agencies lose out on trust as a result they're not able to scale whereas whereas there's another friend of mine whose name is aayush wadwa no matter which guy he deals with he says straight 20% that's it because he believes in speed of doing business and this simple behavior is so disruptive especially in an industry where trust is in deficit that this becomes your Mo just like this in the fashion industry what exactly are the things that

people do wrong because of which they lose out on the trust of the suppliers if not the customers which then causes problems so I think one is um being true to whatever you promise right from day one we we said we're going to launch new Styles every day we kept that promise uh we said our returns and exchange is going to be hasslefree we've worked really hard day and night to make sure that it is Hass hasslefree at least to the 99% of the people um third is that um we've always believed in true and

honest pricing uh and we don't want to be a brand which is always tagged with discounts right even today if you go on our website website there'll be just one small section which has some discounts on it 90% of the products won't have discounts because we believe in true and honest pricing traditionally when Brands uh have been manufacturing they always knew that you know 30 or 40% of my collection is going to sell at full MRP uh then 30 to 40% is going to sell at maybe 30% discount and the leftover you know 30 40%

may sell at 70% discount and taking everything into consideration is how they have kept their pricing on the front end right and over a period of time if you're a consumer of that brand consistently you exactly know when is this product coming under discount and you've lost on that uh trust that you hold right so being consistent and honest is the number one thing I think in any industry just like you said right uh working with one uh person who was charging you 20% but you know giving you content working with speed um you know

he was not losing it's just whether you make 1,000 rupes in revenue or 100 rupees in Revenue what is your bottom if it is similar then you don't need to really worry about the top line but what exactly tempts these entrepreneurs to do wrong things and can can you give me an example of the dark things that entrepreneur often do that ends up suppliers in trouble and the customers in trouble I think like I told you one uh I'll I'll just speak about apparel right one is going really large initially itself because cash low is

everything in this business uh if you have not been looking at your working capital um then you are you know sort of putting yourself in a trap so um starting really small uh and then building it slowly is one key element two is being able to um you know sort of do the right storytelling that you want to sell this product why have you C curated this who is the audience and you know why should they buy a product um a lot of people goof up there because they don't really you know sort of come

out with an identity saying that you know this is what we are um with snitch we are a trend driven fashion brand uh we are very very clear that whatever is trending we will make even if Men start wearing gagas tomorrow we will manufacture a gagra right so we are a trend driven uh brand but with certain brands the sort of baggage that they hold makes them really um you know so uh stubborn that they they lose out on the agility can you give an example uh I would not want to name a lot of

Brands but obviously there are Brands who have stuck to their thesis saying that and once they are stuck in that you know Black Box becomes very difficult or it's too late for them to come out of it like you mentioned it would take them how much you said that it would take them anywhere between 8 months to 36 months just to like just imagine if you had to today predict what is the sort of content um you know that will work 8 months later uh you will not be able to um you know sort of

gauge that but traditionally a lot of brands have been doing that even today uh and they've been successful also uh but will they be successful forever is a question uh I believe that the more agile you make yourself as a company and um put in a lot of data points to it it becomes much more easier in you know increasing the speed of the uh business understood St you mentioned about working capital and I also want to touch upon hassle-free returns okay let's talk about the working capital problem first let's take into consideration the unit

economics and then go backwards towards understanding the working capital problem let's take let's talk about the unit economics of a short that's Niche sales what's the cost of manufacturing and how much do you sell it for uh for us we are roughly at about 48% Cog 52% gross margin that's it your marketing fees everything is considered in cogs no no I mean just the cogs of the product 48% is walk me through the entire unit economics no please uh so if 52% is my gross margin marketing would eat out maybe about 20% um 7 to

8% is logistics and after all operational expenses we may be anywhere between um 7 to 8% sort of AA okay understood now let's talk about the working capital problem your eitaa is 7 to 8% so I'm assuming your net would be somewhere close to 4 to 5% yeah okay net profit margin would be 4 to 5% working capital problem so working capital problem because you don't sort of know the industry no one's going to give you any credit period so you you are going to pay say 30% Advance before Manufacturing any merchandise once it reaches

your Warehouse you'll have to pay out the balance 70% supposedly you've invested 1,000 rupees in one batch of um apparel you've already invested 1,000 rupees right it's gone off your bank account to his bank account day one your sales will be 10 Rupees day two it is going to be maybe 12 rupees and it's going to keep building up you cannot stop manufacturing newer batches because you have to again re in that so again you will put in a lot more Capital to manufacture new products and uh that is where you get stuck uh if

you could build that relationship and trust and get some credit period there supposedly this 1,000 rupees you had to pay 30 days later in those 30 days you would have at least sold 100 pieces so at least the new 100 pieces that you have to manufacture you don't need to invest new money into it that's the working capital trap where most of um you know the entrepreneurs get stuck at got it sidat what do you think about um in fact CH let's go back back to the subject you spoke about the supply chain being broken

because of multiple reasons a there's a working capital problem from the entrepreneur side B you said that there are a lot of Manufacturers who often ask you to manufacture with very high mqs and the solution to which would be to go to a place like tupur find manufacturers who've got left over two things either it could be a fabric or it could be clothes then you bring those pieces to Mumbai and then sell it to people over here build your trust in such a way that you're able to gener more cash flow once you have

enough cash flow then you can go on to find a manufacturer in fact work with one of the manufacturers in trur itself because now you've built trust with them and then manufacture and then sell it over here in Mumbai okay so are there any other problems in the supply chain apart from the manufacturing problem and the working capital problem no I think largely then it becomes how do you choose the the right sort of color design Etc okay and for that you've mentioned data screaming yeah I mean um you will only keep getting better with

time right there is no brand that can be built within 6 months 12 months 3 years it has to be 10 years and above so if you have a very very long Horizon that is when U you know you're you'll be able to build something really meaningful uh like if today the day I start thinking of an exit uh is the day I put poison in my mind and my company right uh if I'm always thinking that I want to be the number one fashion brand that is period right wonderful so what do you think

about unlo because I find Uni very fascinating and I'll tell you why because I find it extremely difficult to wrap my head around Trends okay but you know Apple did this job back in 1990s where they so for curation very easily by saying that you know we've got limited choices so I recently walked into a uni store and it was a delight for me why because you wear one shirt and you've got all shirts over there no dots or prints or anything and without my wife I don't go shopping because I get scolded after that

about what the did I just shop so I just went to Unico and I picked four shirts two pants and I was sorted okay now and that got me thinking that there are two and that got me thinking that there are two philosophies of approaching fashion and correct me if I'm wrong over here one is you be the trend Setter or you be the trend catcher where you look for a trend you manufacture that cloth and then you put it in the market and the market consumes it and the other is you say you know

what guys we're just going to stick to Basics okay and the reason why we sticking to Basics is because Basics will never go out of fashion and we would just make the best Basics people would come byy which gives us multiple super absolutely and that's a obvious Japanese trait right like the category that they choose they will go into the depth of it um you know they will probably go to the entire route of it and find out if their product is the best in that particular category uh they will not really test upon newer

Trends newer Fabrics but stick to that core but make the absolute best sort of product quality I mean I'm sure they would be spending millions of dollars just in their R&D which is very very important yeah so do you really is this correct like is my hypothesis right there are two philosophies and fashion two philosophies um of fashion one is Trend driven one is cor driven uh with cor driven again we've seen a lot of successful brands in the US right uh not only Uno you look at true Classics again a company which is just

four or five years uh back is when they started just basic t-shirts is what they manufacture today is doing above $250 million in revenue and just like four years uh unbelievable stuff you have to just sort of catch hold of one Niche and make sure you're the absolute best there my question is s that you know catching the trend is such a difficult thing to do and there are so many risks involved because if I were to make if I am if I am given two choices one is the uni low way the other is

the snitch way it is quite obvious for me that I would choose a uni way and I'll just help you explain why with uni I don't have to scrap through data I have to invest in r&t which is a very easy controllable when it comes to Trends it's not under my control so I have to consistently catch up with my Trend the second thing is that over here there is a very high possibility of a working capital deadlock because once the trend is gone and the piec are wasted then they're waste inventory it's dead stock

whereas over there in uni I know for a fact that the white shirt is going to sell today tomorrow or day after tomorrow the next year as well so the risk of a dead stock is quite low and most importantly because the trends and Basics change so slow that I have a lot of time to prepare for that time when that trend is going to hit and then make sure that I make sure that I deliver the absolute best product possible right so my question is why did you choose the hard way um look there

are two key points right one when you're limiting yourself um you need to make sure that you are the best uh if you ask me were we the best in one particular category back then I would have said no maybe if we would have invested in a lot of R&D we would have reached there we chose um Trend as the option because one uh it really excites you every single day uh two you know you always start thinking forward uh three is um you know there was a lot of opportunity there uh while you know

a lot of Brands every brand has their own core by the way uh even in Snitch we would have our core which is just 20% or 30% of the entire business contribution right but for Uno it was always sticking to the core but their TGs are also defined uh they have their own limitations like if you had to go for a Christmas night party very difficult uh for you to find products there right or if you had to probably go for a wedding and you wanted a floral shirt you're not going to get it there

so they had their own limitations so we wanted to keep the Tam as large as possible and that is why we chose Trends got it you know in marketing there's a philosophy that if you try to sell to everyone you will end up selling to no one but you're practically selling to everyone yeah I mean uh again so that again depends on uh two things one what is the risk that you're taking if your risk is too high then you're in a trap if your risk is low which is your inventory is low then you

on the right sort of track got it is actually risk assessment absolutely yes so if if you don't really so it's just like you know the roule table right there are 36 numbers that you have to bet on you should exactly know which is the number that you're going to bet higher on and cover up with you know smaller bets across so that you're not killing your cash flows understood sidat let's go back to unit economics and you told me that 20% of the money goes into marketing okay and um having spoken to so many

d2c Founders I've understood that d2c channel is a great head start but that's not a very sustainable channel to grow then I discovered and this is when I spoke to the founder of bold vun told me that there is d2c there is e-commerce and there is offline and then he also categorized it when it comes to electronics and I would want to understand the same thing of fashion where he said that if you want to understand the taste of the audience and see where you're getting the Maximum Traction you go d2c because you get every

single detail of your customer once you get those details you understand that you are good to go then you go to e-commerce something like an Amazon or flip card and the more reviews you get the more your c will eventually come down eventually you'll become profitable once you get that done and with d2c you get a data point saying that Mumbai Delhi are selling insanely well and if you could just understand because you're shipping the product to their house if you can also understand that malard West or borille or Candi or bkc selling insanely well

you form a hypothesis saying that here's where my store should be then you open up a small store over there and then he also walked me through the blueprint of how does he choose the store if it is an exclusive store or a multibrand outlet and that's and that's when we understood that profit offline but testing d2c say offline immediately profitable it's not like a shot that you're taking with a blind eye so walk me through the same process when it comes to Fashion how does it happen because when it comes to electronics as well

the the categories are too small and the number of sqs that they have is also quite significantly small as compared to you so how do you go about this process walking through your marketing strategy so I mean um again marketing I think timing is the most important thing when we started um online right back in 2020 uh offline was completely shut and that is why we pivoted towards online before that snitch was a B2B brand when we started off in online there were just three or four players offline traditional Brands didn't even have websites um

so it became very very easy for us to attract consumers uh and you know that is how you choose categories right when we started off we had 35 products five boxers and 30 shirts right these five boxers were sold out within 24 hours of the launch of the website okay and that that was Peak during covid understood that you know people want a lot of boxers because they're at home now and it's the most comfortable sort of shorts you could wear uh without looking vulgar right uh that's when we started doubling down on boxers and

like I told you like uh we made these Factory so agile that my shirt manufacturing unit can also make boxers or pajamas so we converted and started man furing boxers uh our Revenue contribution at that time was almost 50% just from the category of boxers what and that that was the most easiest sort of uh you know hack for us to enter someone's wardrobe so you were a boxer company first uh you could call that but that was a category that actually sold really well uh it was it was that crazy like we we used

to launch so we were sing selling single packs then we did pack of three to increase the aov started selling even better pack of five you know your revenue is increasing five times and your aov is also increasing five times and boxers is a no return category so we start off started penetrating and you know um that category was almost contributing 50 60% of our Revenue but then came a downfall when suddenly boxers did not sell that's when we you know sort of recalibrated that how do you sort of do marketing right uh and to

be honest we did not have a very very great team we were just about four or five people when we started off we've learned everything from the internet uh you know I clearly remember I had manifested this also right like in 2021 I've seen your podcast of decoding Zara's billion dollar idea really oh wow I mean um I clearly remember when did I see this what was I doing at that time and you know in fact I had manifested that maybe one day uh I would be there and I truly believe in the power of

manifesting right um look at so many people um you know I uh I'm great friend of um you know the danzo founders both Kabir and D um when I met them about 8 nine years back um they showed me that this is what they're doing they were on WhatsApp and I was like what idea is this but they knew it in their head right you look at every great business that has been built businesses are built here right and then you start working on how how do you want to do it uh if you've got

that right on your head then it becomes very very easy look at Elon Musk you know if if he actually um you know back then went and said I'm going to build SpaceX people were laughing at him what are you trying to say and look what they've done now same with zepto I mean if you are very very sure on um you know the best way to look at it is uh you are sitting there and imagining what am I doing you might be seeing a cluster of buildings behind me and that's why you like

what is he trying to build here there are already so many buildings right but I'm looking at from this side I feel an it's an empty Baron land I could build whatever that I want to uh and that's the difference between you know a great founder who has uh built something on in his head and has imagined that very interesting man and you know you spoke about um the story that you must tell as a brand yeah and considering the fact that there are so many Brands out there and you mentioned that you were a

team of four people how did you differentiate yourself in in that constraint so we had only three promises which we kept saying again and again new Styles every day hasslefree returns and exchange cash on delivery available these were the three basic things that we started with hassle fre returns and exchanges okay and you know cash on delivery available cashable during that period people did not trust online Brands because there were so many frauds happening there was Peak Co every Zone had a Red Zone green zone you didn't know how where to ship um you know

where not to ship there were couriers which were totally broken so we had to sit and fix up saying that these are the PIN codes that are serviceable and we will make sure we are only enabling these PIN codes to order uh so to build trust right if I would have taken orders from across all the PIN codes uh I would have been in a mess because a lot of orders would not be delivered at all so just being consistent with your communication and then you know you start building aspiration with good content good um

photo shoots good videos and those are you know things that can be built but your roots need to be very very strong I mean even 20 years later people should know snitch saying new Styles every day you know they great experience online offline and you know they are a customer entry company got it s tell me something in 2020 like you just said you just launched and you're able to sell all these products now there are two reasons why this could be this could have been possible the first reason is the sheer expansion of the

market the hunger of the market where people were just willing to buy anything just for the sake of experiment eventually they loved it and then they bought it again the second is your ability to build Speed Of Trust which one of these reasons do you think was uh the reason why I think the number one was timing timing uh timing was the most important thing I think for any business timing is the most important thing you should be in the right place at the right time uh a little too early or a little too late

may not give you that sort of impact so uh and timing again happens through uh luck and through the sort of experience that you hold uh two I would again say trust uh we had to build over a period of time it's not that we had a very large customer support team you know who could answer phone calls Etc it was me and Chan who a CMO who were on Instagram DM you know telling hey I'm Jenny how can I help you um we had to do all these hacks I'm Jenny yeah so we had

to sound cool right uh so we did all of that um even midnight I'm telling you I'm looking at these three uh phone numbers and chatting with them you have to look at these three we had a small WhatsApp group and we that's how we were communicating uh but then the hunger for building trust was always there and it is still there I will never you know even till day tell that we are the best I mean uh I would even want to apologize to Consumers who had bad experience with with us right my only

um you know sort of thought process there is am I better than yesterday uh if we are that then we are in the right direction and that's the only thing that we talk about every product that we launch is it better than yesterday every policy that we make is it you know for the ease of consumers uh there might be a lot of consumers who had lot of backlashes lot of bad experience but we have evolved over the last four years and um you know we have grown and matured as a company now uh and

you know now the sort of decision making that we take is more um I would say thoughtful uh rather than just thinking of unit economics thinking of you know what will we make Etc H so you're saying that we optimizing for trust and better systems as compared to better un and I think one more thing that happened was shock tank that gave us absolute great recognition um you know trust uh everything that an entrepreneur wanted right and luckily the episode went really well uh and even there right um I was supposed to enter the tank

at 7:30 in the morning uh couldn't sleep the whole night uh because of that pressure and ended up entering the T tank at 10: p.m. oh my God so that was uh I just had a you know coffee shot and I just said sit be yourself and you know it is so simple when you think very very clearly that you know you want to remain profitable from day one you building a business not a business to attract investors or you know get a good exit for yourself um you need to be very clear in your

choices uh you know it took me 17 years to understand what not to do in life right so I keep telling this because I knew from day one if we expanded into different verticals too soon we would be in a trap like a lot of Brands I've seen they've reached a x Revenue they would hit women's apparel again hit a x Revenue they would enter into kids and then home and Furnishing you get attracted too soon uh the ability to hold that is the key if you are able to say that no I'm not going

to do this I'm just going to focus on this one particular category scale it until the you know that like the glass is almost full then think of another category and build that from scratch and I see a lot of fashion brands in fact uh with theja I used to go to a lot of these Fest and I used to see a lot of fashion brands now I did not know a lot about fashion but when I spoke to them I understood that they're also distracted like the mission statement is not very clear um the

story is not very clear and because the story is not clear the values are not clear because the values are not clear then the kpis follow the values right and unless you have that cular Vision it's very hard to segregate yourself from the market because if you yourself don't know how are you different from the noise how are you going to help the customer differentiate you from the noise from their perspective it's quite difficult now talk to me about uh let's go back to marketing let's talk about the unit economics if you sell something via

d2c if you sell something via Amazon on day one versus let's say day th000 3 years later and then let's talk about offline stores if I sell something for 100 rupees what's the unit economics going to look like if I sell d2c look again uh very unfair to sort of look at only one and attribute everything there right it is not necessary that whatever sort of spends that you've done is only towards one channel uh there are a lot of consumers who would have seen a great ad on Instagram but went on mintra or any

other platform and bought us there uh but it becomes very difficult for me to then attribute that got it same could be with offline s I'll tell you why am I asking this question and from what perspective I'm coming from I'm very close friends with a family that runs cycle pure agati and I was having this very interesting conversation with one of their Marketing Executives his name is VOD and I keep sending him um pictures of competitor products on blinket and zepto and one F day I asked him why aren't you on blinket so he

said no you know the listing fees is too high and it's not really worth it because they were looking at the attribution in terms of direct equation how much am I investing and how much am I getting out of it and that's when they realized that you know offline is very very profitable and this is something that entrepreneurs often miss out on that they don't understand that because they've built such a large company and there's a new thing that's upcoming in the market they don't understand that it is causing a indirect ripple effect to the

sales that's happening for a product offline for example fool I bought fool from blinket only to realize that the product is fantastic and now I buy it offline but here's where the one question that most of these entrepreneurs ask is what is a healthy attribution like if I spend 100 rupees and I get a c of 40 rupees offline I know for a fact that I'm going to derive x amount of profit but if I get the same 40 rupees of GAC when it comes to online and then I have to spend with last mile

delivery then I have no profits left so what kind of a profit margin is healthy for me and if I'm going to incur a loss what kind of a loss margin is healthy for me to be able to say you know what quick Commerce is still working d2c is still working does that make sense to you yeah I mean it does make sense but uh at least from my perspective you have to take two steps back and first think what do you want to build if you want to build a company which is highly profitable

uh scaling say uh 20 30 40% year on year uh and you know you're enjoying your you know work life balance uh that's a great business to do I mean uh then you could just pick up few um products pick up few marketplaces um reverse calculate and keep your pricing accordingly saying that this is the sort of margin that I want to hold these are the obvious commissions logistic cost Etc this is the marketing and this is how I want to build it but if you want to build a brand which you are very clear

from day one saying that it is going to be you know uh widespread I want to build it giving my everything for the next 5 years and you know sort of make that noise then you need to start really slow keep your cost really really slow do as much as you can by yourself like I told you right we never knew anything about marketing I didn't know the meaning of RTO when we started snitch RTO is returned to origin I did not know the meaning when the first parcel came back is when I realized a

that's when someone told me that this is RTO which means customer placed an order but did not you know take the delivery that is why it's come back to you so you have to really start really really small learn from the sort of mistakes it's okay I mean let it take 3 years four years 5 years but if you want to build a very very large business then be consistently doing the basics right and keep optimizing on your cost got when we started our return was 40% today it's at you know 13 14% when we

started our marketing was almost 30% but now we brought it down to 20 and it'll start going lower uh the main thing is are you going in the right Direction so it's very difficult to sort of say how much of marketing is good enough I think if your gross margins are around 65% you could go up to a 30% in marketing yeah got it are you talking about d2c or overall overall I think uh d2c specific then yeah 65 to 30 is a good ratio 65 to 30 is a good ratio butl like for the

same piece of product how is the margin different from offline versus online so today we spend zero rupees on offline marketing right everywhere we open a store it's just a simple announcement on our social handles and messages to our consumers saying that snitch is now available at so and so location choosing the right location is the most important thing we built in a tool which could probably tell exactly that if I'm sitting in your office here uh at this pin code if I open a store what is the sort of Revenue that it'll make what

is the SI sort of size that I could opt for and what is the nearest competition look looking like right uh that ability today because we've spent you know so much over the last four years gives that um you know sort of ability to go zero marketing on offline and everything that we've spent over the last four years is now getting attributed towards offline and as we start scaling offline businesses and build you know vertically uh good online uh categories the gross margins is just going to increase bro I'm wondering how you said that with

the straight phase yeah you know we built a tool that can tell us how many customers we have and how much each store will generate by the way guys the last time he told me this this is just during the break I was mind blown I was like dude what the hell is this like how did you build this now tell me Sid what is the logic behind this magical tool which is able to tell you how much revenue you could generate if you open up a store in XYZ location that is insane so we've

served over 3 million consumers right uh so I know exactly three million consumers across different PIN codes we've mapped it with PIN codes that exist on the Google Map now uh any pin code that I tap on I know exactly how many consumers do I have in this radius overall there are six pin codes what is the sort of total number of consumers that I have what is their average order value been like over the last 4 years what is the sort of retention that they've got over the last 12 months um you know how

many times have they bought in the last 12 months uh and then the system will will exactly tell you whether this is a high potential low potential or a no sort of a location data collection unknowingly because we were always online first so obviously data it is just when we decided to go offline we went back and started looking at data and that's when um you know anik who's our CBO plotted this uh entire thing but would you have got this data had you sold via e-commerce I mean it is very very difficult to trust

someone else's data right I will never talk to me more about that yeah I will never do that um you know there are certain tools which are readily available today which could give you these insights but I would not want to trust them just because I think it's a sales proposition for them right they might build a crazy tool which will give me high conviction but I will not want to risk it unless I have verified it through my data uh and that is why we chose to build it internally right everything that we've done

over the last four years like I told you the first thing that we think of is is it good for us if it is good for us then let's think in that direction and build something which is scalable and which makes more sort of logic if you had to Outsource this I had to give this data to someone else which is very very precious and might be misused H so sidat had you sold all your products by e-commerce would you get this data yeah yeah obviously I mean through You by e-commerce do you mean Marketplace

marketplaces by Marketplace you don't get these insights yeah that's what I was asking yeah data which means what if a Founder has to start and if that person has this vision of going offline which is highly profitable that person must spend a lot of money going d2c not really I'll tell you Ganesh it is very very simple uh if you choose Marketplace as an option go there build a product Market fit there you know you know these are the sqs that are top performing these are the sort of um you know categories that you're in

which are doing really well now you start your own website start really slow with marketing because already you have a presence somewhere people may know you and that is when you start the second Channel and then offline so it is not very very complex if you actually sit and think about it but patience is the number one thing with which most people don't have so you need to build that patience inside you saying that I'm going to give 5 years 10 years and not just a 2 years tint and you know think of an exit

so if you are very clear on choosing your path any path according to me is amazing right I have seen so many Brands which operate into B2B which are just manufacturing and selling and they're doing anywhere between 50 crores to 500 crores making you know anywhere between 5 crores to 50 crores perom which is not a wrong choice uh it is just that a lot of people believe in um you know curating their own brand when uh and it it is not very easy to do that also true right so it is all on your

choices and how much effort are you going to do to put it I mean tomorrow if you decide that I'm running things school parallely I will start a fashion brand it's never going to get get successful unless you shut down things school and actually sit there and start it from the scratch M that's so interesting man that is there are so many different philosophies it's just that you have to stick to the philosophy that suits you the best abely I mean I keep telling I was making more money before starting snitch than I am now

uh but I chose this because I knew what you know what is the sort of uh large threshold I've kept for myself uh in the future so it is all about your choices that's very interesting but tell me something I was just reading through Zara's numbers and uh if I'm not wrong they did about 2,000 crores in Revenue yeah 2100 I think 2100 or 2400 in the profits were close to 200 crores y and then they I think have 11 stores right 22 22 stores but if you do the math it comes down to a

very less they have about 40 stores sorry so 200 crores in profits with 40 stores comes down to just 5 crores yeah in profit yeah so if Zara is Zara doing something wrong no I don't think so Zara is not doing anything wrong I believe I mean that's a brand that I have the users respect for man they've survived you know two world wars yeah so uh they they they can't do anything wrong I think one they've not really focused on India as a market and uh two inflation happened in Europe in us and they

started attributing that towards India also but Indian consumers are very very different right they will not just buy a product because it is Zara Zara right they will apply their common sense so uh if you're building a brand in India you need to be very very um you know rooted towards Indian mentality and then try and build that because abhi Dubai Japan Oria more or more or same collection abhi it was insanely expensive in India is also comparatively it's insanely expensive and then I was just thinking that if I were to go to a snitch

I'm able to find more variety and Zara somehow is going more towards Street Wear which I don't know is suiting the Indian taste or not but then I went to abudhabi and there I saw that they had the same collection so I don't know and this could be an amateur's guess that maybe they're just applying one size fits for all because if you look at Zara they are present practically in every Hotpot in the country there isn't a single India one person who says that you know I don't know about Zara or I haven't shopped

from Zara so their awareness level has peaked Beyond this it's India too which is never going to shop from Zara now awareness level pricing for that particular unit of cloth you are charging the highest in the market and you present in all the hotpots and you're still sitting at a profit of about 5 crores per store again uh look uh Zara in India is operated by a third party company so it is more like a B2B sales that Zara does to the Indian company and the numbers that we talking about is the number that the

Indian company is making right it's not their Global number uh obviously when they ship any product here uh they would be keeping that margin there and then ship it here understood so it is more like a B2B channel it's more like a franchise uh business right because then You' already kept certain margins and then shipped it to the franchising because I'm just trying to understand that if Zara is present in all these Hotpot awareness level is high Zara has kind of achieved this product Market fit but um um and I could be completely wrong about

this but don't see the same agility when it comes to Zara India yeah because again like I told you focus is very very important their focus is not only in India right they're a true Global brand um you know who's got maybe 2,000 plus stes across you know 50 different countries so uh for them the focus on India is maybe not that high uh and this is what that they want from um you know this particular uh country or pin code or whatever that they think of uh and I think that is why a brand

Lakes snitch has great opportunity what I was so for a customer like in the tier 2 and three either it is you know unaccessible or unaffordable or you know maybe uh you know not relevant also to an extent uh but there you know a Brand L nits could open you know 10 stores in Bangalore I could go to you know Hui dvad belgam any sort of tier two and three cities across there also without any hesitation because my price point my category and my T loves me to Zar Benchmark or opportunity create that they've set

this Benchmark for fast fashion which was seemingly unknown to India before they arrived which has given the likes of a Trent a Westside a snitch a huge opportunity to tap and that tap onto that Mega Trend because although they've created this Mega Trend in India they've left a very big white space in terms of the pricing as well as the location which then can be capitalized by the likes of snitch Trent and others yeah I mean I think um you know if if you really spend a lot of time and understand businesses it'll make you

really really sharp uh and you you could get that speed Advantage right to give you an example bests side was started in 1998 I think it's 25 years old now uh it took them 12 years or you know 13 years to reach where we have reached in you know 4 years uh so I mean again it is all about timing it is all about you know the sort of speed that you could generate uh in your organization and you know go faster it is so fascinating to know that Westside took 12 years to reach the

500 CR Mark yeah I mean uh it again depends on the timing like I told you right take the credit it took Westside 12 years to reach 500 crores Zara is sitting at about 2000 CR and it took you just four years to go from 0 to 500 crores that is insane man yeah I mean uh again uh like I told you our our belief from day one is being very very clear I I'll give you a very short story like uh anik who's our CBO um I knew him through delir who's the co-founder at

danzo so um I think it was year one of snitch I was speaking to I told him don't know how to corporatize this uh and but we're doing phenomenally well we've already hit 100 CR Mark within you know 18 months he was he was also stunned G are wow then I told him I need someone who could you know sort of help me he told me I have a guy uh whom you know who I know really well his name is anik he's on a break uh and I was like take just connect me to

him um connected um we had a conversation he came up with data points Etc and told me that yeah I've seen so much much on the internet about you and I think I could add a lot of value uh and I will U be a consultant uh so I was like okay do consultancy uh week one he was there for one day week two he was there for two days week three he was there for 3 days over a period of 7 weeks he was there almost every single day the only question that I asked

him was do you think this can go to 1,000 CR within 3 years he told me absolutely yes uh and that is when I told him please you know come on board and you know let's let's create this rocket ship and you know having the right sort of talent team is very very important I think I'm the most you know sort of dumb person in the organization if I have to say so my only um you know sort of objective is to throw numbers to throw Vision to just talk about the impossible and when you

start doing that you know people will come up and say hey you know what I'm going to build this it becomes so so easy and you know at that time it is also very important if you have a intern who's coming up to you and telling you that you know what this is a problem that I find and I think I can solve this you need to give him that opportunity to actually solve it uh whether it is Cricket whether it is uh entrepreneurship whether it is life right opportunities when given at the right time

to the right person just betting on his belief right could create you know very very strong players or leaders yeah that that makes so much sense man now I want to go back to offline and online sidat um if an entrepreneur is spending time in e-commerce um what exactly is the methodology to crack e-commerce in the first place especially when it comes to marketplaces like Amazon and Flipkart what would you advise a fashion entrepreneur to start with I mean look uh first of all these channels don't work for fashion the channel that you have to

choose is MRA AIO because these are more relevant towards fashion how good is Aio bro AIO is equally good I would say I mean um I mean for us we consider every Marketplace equally it depends on the sort of traffic and uh you know retention that they can generate so I was speaking to Varun from Bolt and he told me that mintra has a much higher aovs compared to Amazon simply because people are coming there for fashion okay so have you seen that happen when it comes any day I mean MRA is much much larger

so obviously U you know they are the largest fashion platform uh so that's the best play you could best place you could go out and at least start uh then take inputs from there and build your own e-commerce website cool let's talk about the basics of menra if a fashion entrepreneur has to do insanely well in midra let's jot down the basics what's the way to grow first is to start I think that's the most difficult thing to do right A lot of people think of ideas in the ahead and sleep but morning it's flushed

out I think start second is start really small don't have you know I mean you could have the highest of Ambitions but um you should take the most limited sort of risk maybe 10 sqs maybe 20 sqs you start with and small mq wait for some sort of organic growth of that particular product and not really just push it by marketing uh platforms may push you but you have to sort of pull back and say I I want to see what is the organ reach like and then start building a strong community over you know

uh Instagram and all the other social platforms that you want which is the core eors of your brand right whatever that you want you want to say that I'm the most coolest brand or I'm the number one street wear brand or whatever that you are uh the story is very very important marrying that story with you know uh feedback loop on your platform is the key again uh which is you put a collection that is coming out and it is a available in the channel that you're selling at got it you mentioned about mqs what

is a healthy mq to start if you have 10 sqs I think you could start as low as 50 to 100 pieces per SK correct because you know like is something that people like is something that you'll get when people like you comment is something that you will get either when people love you or they hate you yeah so comment is a great reflection of How Deeply you have touched the sentiment of the audience corre so if you could just communicate that feeling through your video whether that's a funny video or an inspiring video or

a document if you could just communicate that feeling the platform is going to get you more Impressions eventually getting you more CTR and that CTR will translate into more views and that's how the flywheel starts yeah and as you keep growing bigger and bigger this just opportunity just keeps on increasing in size eventually getting you more audience more visibility more money now how does mintra work because here I'm thinking as a content creator I can definitely produce a different piece of content but if I'm selling a black T-shirt and there are 10 other brands or

100 other brands which are selling the same black T-shirt some are very big known Brands some are unknown Brands some are unknown brands with a lot of reviews and here I am an unknown brand with not a lot of reviews at all because it's going to be my first sale on mintra does the platform still promote me absolutely it is equally the same right if you've curated 10 pieces of content with Zero Subs subscribers your hope should be that one particular content is is you know going crazily viral it's the same thesis here also that

if you're producing 10 sqs or 15 sqs you should just do your best there saying that at least one or two products are just going to be a you know super seller for me which will create this entire business uh right and once that particular product starts selling and never goes out of stock uh in your warehouse and you make sure that it does not you'll start getting a lot more reviews and the way the algorithm itself works is one how much of inventory that you have two is the reviews if you maintain these two

you're all automatically and organically being on top but how does this fly start correct correct so how do you establish that Speed Of Trust because I don't remember a single product that I've bought from Amazon or mintra without having a look at the reviews the number one thing is it is going to take you time to get reviews unless you're going in for a fake review uh which is making someone transact and then putting reviews on it uh so you have to do it organically and number two is when you're choosing your category choose a

niche which and see the perfect sort of gap which is available uh for example if you decide I want to make say t-shirts for example then see the sort of top sellers on mintra what is the price point what are the products looking like can you make something which is better at that similar price point keeping your price point as a moot or the other thing is um I will not keep price point as a moot but I know what is selling the best there I will make the best sort of t-shirt there but charge

a premium for it that also works uh it is just that you know people need to find it attractive because e-commerce is all about your visual appearance right if you can make it very look very attractive there is an obvious thing that you know people will click on it and make that transaction happen got it got it understood so it's basically like YouTube only absolutely absolutely got it um is it any different for AIO just like flipart it is all all all the marketplaces are you know very very similar sidhart now let's talk about a

different category and like you mentioned now you ventured into shoes fragrance Sun glasses and bags which is the category that you're absolutely bullish about I think all the categories we absolutely bullish about and that's why we started I a strong believer that businesses are built vertically so whenever we've thought of category we've just thought of that one category as a vertical and then seeing you know what is the sort of competition available what is the sort of um you know Gap that we could fulfill in and how can I upsell this product to my existing

consumer right since we are going off offline now aggressively becomes much more easier to make the basket size even larger a fragrance kept near the checkout you know a cool bag which is around the store which gives you that complete look a footwear again a a great you know uh category to be in um so I mean all of these choices we've again but whenever we start we start really small we first test uh you know the sort of product line that we venturing into then crack the supply chain then double down even if it's

going to take year I'm okay with it walk me through this testing process again launch say maybe 10 20 sqs with very low mqs even though my cost of goods is really high only online or offline online first becomes easier because your inventory is in one place becomes much more easier for you to uh you know ship out faster to all the zones uh so obviously online first start really small and you know see the top sellers see the ones that sold at you know very large discounts discard them and then start building products which

actually got good traction got it so snitch at the heart of it right now is a fast fashion brand which is selling clothes and now you are venturing into shoes fragrances bags and sunglasses okay let's understand your customer Persona first and then I want to understand the thought process behind all of these other categories so who exactly is your customer let's start start with the age and then go down so I think anyone in the age of 18 to 35 is our ideal consumer right okay um who digitally Savvy uh who likes being um you

know trendy because everyone wants that right swipe on Tinder everyone wants there in Instagram fresh to you know feed to look really fresh um three is someone who not only wants to look um good but also feel comfortable in that clothing um income could be anywhere you know earning maybe 30,000 to 3 lakhs a month uh mostly you know consumers would have two- wheelers or you know a few may have cars uh who commute um you know um I mean this is the mode of commute that they would choose um if I have to picturize

a cons I mean mostly working uh or you know self-employed yeah so I mean these are the obvious consumer India won last I think any brand right it's like a pyramid you have to start from the top uh there is no brand which can tell I'm a tier three brand and I will only build there it is impossible um every brand is a pyramid I mean if that was the case uh you know Mercedes-Benz is sold highest in the tier three cities right they'll never start there uh same with maruti uh everyone has to start

from the top so tier one or the Metros are your number one consumers and India is so diverse that every Metro will have Tier 1 2 3 4 in terms of the income class understood okay so now I've understood the customer personal now let's go down to understand the gaps in each category let's start with shoes shoap bro I think Footwear is a category which is untapped again okay like you why do you say that you name me five Indian Brands which are doing phenomenally well h b red tape again not Indian red tape yeah

Indian but Woodland red yeah will you wear them how many of these Brands yeah how how many of these Brands will you buy bro I actually don't buy any of them exactly the point I go to Zara whatever I find I just get it yeah exactly the point right uh I'll tell you why did we start these categories and what is the sort of thought process imagine uh you know I'll take International Brand's name uh maybe super dry right when you imagine super you're thinking of Hardcore functional products you know t-shirts which have these huge

graphic prints on it cargo pants which are really heavy and you know Army sort of a product line when you think of you know some Formal Wear brand you know you would just imagine you know shirts chinos Blazers Etc but when you think of a Zara you would really not know what are you going to buy unless you enter the store you might buy a footwear you might buy a denim you might buy a fragrance you might buy anything that is available there because you connect with the brand Zara right correct that is what we're

trying to build and that is why um you know we we trying to enter different categories because uh we want to create a Persona around snitch itself that you know you start resonating with the brand and becomes much more easier for you to choose this as your you know One-Stop solution got it so Gap shoes do you think there are less brands in the market or the price or what is it I mean it is I mean we want to sell a brand no consumer brand can be built over price or anything apart from being

a brand right so we want as a brand we want to be a complete men's Lifestyle brand at least for now uh before we vent Venture into different segments um so for us it is very clear that we want to build the business vertically if I am build making you know X number of rupees by shirts then I've started denims to make the extra um you know 20% of it then I've she knows to make the extra 20% every business is you know separate for me every category is very very separate and that is how

we build the entire business uh then it becomes very easy for you so whenever we think of footware as a category we've seen what is trending what is the sort of Gap in terms of product range and uh you know the price point and then curated a collection of it doing a very small litmus test the basis the sort of data that we see we will start doubling down on the supply chain and get more products can you just walk me through one such product line that you've spotted the gap for looked at the price

and then launched it see um like I told you right the start itself we never wanted to be a boxer brand uh but when we started we were selling the number one category for us was boxers uh and we had to kill it within like 12 months because people were not opting for it so agility was important we had to shift and get other categories up right so I think um even the same with coads like when we started we were the one of the only Brands which were manufacturing cords and selling them because people

were at home we knew you know people are doing House Parties now and during Co and they want to wear something which is cool and comfortable but even that category is not so successful now so I mean you have to be like Footwear is a category which is very large uh you know it's not going to get killed at all everyone is going to wear Footwear right so we knew the time is very large now the second point is what are the gaps that are available you have to just look at the brands which exist

what are they lacking and what have they done really well with and then come up with a collection which blends you know both these learnings and you could create a large business there example collection so that I can understand the thinking behind it so I'll tell you the example of Footwear itself right like we launched our first collection last year which was just about 12 skus we were online only then uh just had one retail store um online you know since we had a strong customer base people started buying foot they these were just sneakers

sneakers okay yeah very casual sneakers so uh started with that took data points spoke to a lot of customers who bought tried and understood what was their feedback few told us it is really cool few told us you know it is really comfortable few told us it is cool to look at but not very comfortable so then we took those data points built a stronger supply chain towards it and now launched a larger collection uh and now since we are there offline also people can actually look at it feel where and you know uh obviously

there's a good new category that we could build H and this also happens through data scraping absolutely got it understood so does the same thesis apply to all other categories as well understood so let's not go around it um s that the last thing that I want to cover is store economics um a lot of people do not understand and even I had the same notion back then that the store is so expensive like d2c is much better only to realize that d2c is not that good as compared to a store and what I've come

to realize is that and this is something that came from the founders of Coco guard as well as um Vidant who told me that bro if you just get the right store at the right location it's going to be insane so walk me through one of your store economics so that people can understand that especially when it comes to a fashion brand so look again it is very different I mean for us since we have been online four years uh people are aware of the store so it becomes very easy for them for us to

attract footfalls otherwise if you are just starting with offline that's the big bet that you're taking unless you know um you have enough Capital to survive uh so the number one metric is the rent to revenue ratio rent to revenue ratio so if you are um you know paying X rent this is the sort of Revenue that you should do what's health for a brand like us we take as 10 to 12% for a brand which is got higher gross margins could go up to 18% to 20% there are Brands which go up to 30%

also oh really can you name these Brands I mean no but yeah I mean there are Brands which uh I mean their gross margins are high so they can afford it which is not wrong at all right give me the basics with Mumbai as context yeah so I mean Mumbai again you know there are so many Deep Pockets uh it is best to choose a location if you have if you have nothing right you are just sitting at your home and now you decide you want to start off a store first you will start sourcing

products that you think will sell you can sell in retail then spot a location maybe the best thing to start off is around your residence because you know a lot of community there people around it uh you don't have to do a lot of research because you already know Community this is the age group this is the income level Etc start a store there becomes very easy for you to then keep growing from there there then choose the next location which is similar to this Etc uh but if you're a brand who's been there for

a very long time then you need to you know obviously have that sort of experience which you're giving consumers online also so for us um rent to revenue matters scheme of the building which is what is the facade height you know obvious trades that we want uh obvious TR so I mean for us we are very clear that at least 25 to 30 ft should be the facade you know uh 10 to 11 ft of clear height uh should not be very very you know vertical sort of a building should be two three floors Max

why so I mean consumers don't really go up till fifth floor then go to Fourth then go to third huh like if you're taking the whole floor if you're only taking the ground floor it's okay I mean for us we do slightly larger format stores because of the sort of width that we have with sqs someone who's got 30 sqs could start with a 400 ft also because your I see your store at Infinity yeah but then once you get inside it's located on the first floor of infinity and that's when I discovered oh my

God snitch and that's when I went shopping over there so um and you know this is something that the founders of COK guard told me that they said that if you have a customer Persona and you see that there is a brand in a different category which has the same customer Persona just blindly go and put out a store on the ground floor of a mall right alongside that particular store for example when it comes to goart Zara customers they customer Persona matches with Coco cart's customer Persona so they're like bro our hack is pretty

simple because we have the leverage of capital we would just put up a store as close as possible to a Zara or a Starbucks that is enough to drive enough foodfall eventually we'll be able to sell very well do you also follow something very similar no I mean we've again learned it the tough way saying that follow your own data and not someone else's data right can you give an example did you mess up somewhere not mess up somewhere but we we've seen like uh uh all Zara stores don't do phenomenally well uh there is

a Zara store in Surat which uh just does 10% of what it does in padium if I had to place it there then it'll be a wrong call right so I think the the way we look at it is number one is our data point how many consumers do we hold which is an obvious thing that if I have 2,000 consumers and say this particular pin Cod I know uh even if 30% is the the retention rate how many are going to shop from me and through the malls pool how many new consumers will I

uh sort of attract and plus three is there are a lot of consumers who've seen us but never shopped because they didn't want to buy online now they can go to the store and experience it so for us data towards a neighborhood is not very very important uh to give you an example our first store in Bangalore is on a semi High Street store even till date there is no absolute ret retail presence across 500 M up and down okay we chose that location I was passing by jar saw tet board uh the first store

that we were doing right it said 2,200 ft um 365,000 is the rental uh the first thing that hit my head was even if we do 7 eight lakhs out of Revenue we'll be profitable um so we decided to take up that place uh took about 2 months to design it July 15th is when we launched and within you you know 15 days that store H 50 lakhs in net revenue oh wow that was a strong brand pull because there's absolutely no sort of you know retail presence there uh and again I think art of

distraction helps you you know amazingly well uh in marketing at least right uh same with online if you're scrolling on Instagram you see something which is distracting you you know different from the obvious content that you're watching it is for sure that you will spend extra 5 Seconds the same way when you're passing by a street which is just Barren suddenly you see a you know flashy store in between that's a distraction so I think taking the right bets is also very very important and um you know starting with very very low um you know

fixed and operational cost is also very important H got it s when it comes to a fashion brand like yours what exactly is the metric of success because when it comes to something like bellavita perfumes it's obviously the repeat rate like but when it comes to snitch there's a possibility that I like this trend so I go and Shop but then the next Trend that comes up I don't like that Trend so much so I may not shop from snitch but that doesn't mean that I don't like snitch so what exactly are the parameters that

you gauge or any fashion brand must gauge especially in the fast fashion space to be able to gauge their success I think uh number one is so I I'll take two steps back right we have over 10,000 styles on the website and app 10,000 10,000 Styles if you cumulate L look at right over the last four years more than 10,000 Styles have been produced typically a brand manufactures anywhere between 500 to 1,000 okay so that sort of shows up that we have everything and anything for everyone which means that if you are coming on the

website there will be something that you may like where is you know um someone else coming in there we want to curate everything for everyone for every single location that um you know whenever I think of go I should think of opening the snitch app you know you I I think of Christmas I want to think of snitch app I'm thinking of a wedding I have to open this this is going to be my goto app that I want to open in right uh how do we do that again very very complex because you know

managing so many sqs is the biggest challenge not you know having a lot of dead stock uh so what's your dead stock percentage I mean we would be anywhere between 3 4% above 365 days what are I saying 3 4% yeah bro man is at 2% dead stock yeah and you guys are at 3 to 4% that's crazy bro no I mean again that is over a period of 365 days that is because of your learning algorithms yeah uh and again if you look at above say 6 months then it'll be barely about 78% if

you look at above 180 days then it'll be so largely what happens above 365 days uh is the category that we operate in uh and so like I told you Winter Wear is one category which lasts only 2 months right uh there are chances that this has to be you know sold only the next year and that is why you know we may be at that uh 2 3% sort of a thing but we always keep Provisions for that in our Mis what do you do with this dead stock I mean largely uh it would

be either in one or two single sizes in different sort of um you know um designs uh so it's not something that is a complete complete unsuccessful design which is sitting on the inventory uh largely it'll be broken sizes just one piece two pieces Etc what do you do with them so either we try and liquidate through Marketplace or the end is a CSR activity that we keep doing every year got it got it understood um s the last question that I had for you is uh tell me what are the biggest mistakes oh we

were at what are the parameters that one is supposed to gaug to assess the success of the company dead stock dead stock ratio less than 5% again depends on what sort of brand that you're into Define a few categories and give me a number no please so if it is a you know very very slow core then you could hold inventory up to 6 months 9 months also like uni yeah uh but I don't know the exact number of uh uni so I will not commend but for a fashion brand we are at say about

45 days 45 days got it and for the store like you mentioned rent to revenue ratio should be between 10 to 12% I mean again depends on your gross margins so you could go as high as you can if your gross margins love you at a 50% gross margin you said 10 to 12% you could up to go up to 20 also to start off because every store will keep growing your on year right uh so SSG is another thing that you have to keep monitoring which is same same store sales growth should it be

growing every year yeah at least by 7 8% it should grow 78% yeah even a bare minimum any parameters that somebody should take into consideration no then it is all about your Interiors your VM you know making sure the right inventory is at the right location right uh the advantage that we have that because we are a digital first brand I exactly know that you know this particular SKU will sell in Gujarat but will never sell in Delhi and you know this SKU will only sell in Delhi but never sell in Gujarat so that also

gives you that Advantage being digitally first having that data last question yeah better question how was your Shar tank experience because I almost forgot that um you became extremely popular after Shar tank what was the experience like it was the most um you know amazing moment of my life I would say uh because one it gave you validation two it built a lot of trust three everything there was free so I didn't had to pay a penny to go there my travel was taken care of you know my food was taken care of of um

you know even had I not got anything out of there I would have got a lot of learnings so I mean that was one of the best moments in the Journey of snitch uh which I'm sure will be embarked forever did your s shoot up obviously it did obviously it by how much I mean we grew almost uh so over the last 30 months we've grown 12x 12x yeah that's insane man uh during that phase I mean again that is a very short-term sort of growth that you could get right uh what Shak tank did

is we were here it got us here and then stabilized us here uh and you know to a point it was coming down also and then that's the time you you know again uplift the game with right product right experience do everything that you promised and build business from there who all have invested in Snitch well we have an we had an all five Shar deal everybody yeah now what is your experience with the sharang Investments because um do these sharks really spend time with you or does their team spend time with you how does

it work so I'll tell you uh to be honest you should only use them when you want to either get a good Network or you you know you're trying something new want to get their opinion uh but always build your business bases your own gut feeling uh because no one is right or wrong here right uh even uh even anyone that you take as an example uh cannot be 100% right but you could take insights from them and just use them and that's how you know I I I'm great friends with everyone and wherever I

feel that I need a you know sort of help I would obviously nudge them but don't expect them to come and run your business that's not going to happen have you ever seek help from them yeah yeah obviously I have um you know in terms of building Network in terms of um you know maybe understanding certain data points or certain tools Etc I have give me a few examples of these and I'll tell you why because every time time somebody raises money they have some sudo expectations for example they expect that the investor will pay

them a visit every year or get them on call so that or get the investor on call so that the investor can tell them that this is right that is wrong or they would want the investor to have a look at the entire company report so that the investor can give them analysis and what they don't understand is that just because the investor has put in some money your business doesn't become from his business so help me understand that once you have investors on board what is the right way to leverage these investors so that

you can Propel your business to the next level and how have you done it so I mean look again different people have different thesis I think it depends on what is the size of investment how many you know sort of what is the stake that they hold etc etc angels will largely back you just you know because they are passionate about uh you know uh creating entrepreneur ship or they believe in your vision Etc when you're doing a larger investment round the number one thing that they look at is you know how large is the

Tam where do you fit in there and you know what is your vision like uh there is no one who's going to come and sit and do your entire business right unless they've acquired you or own More than 70% of the company um so you know for me I have been very clear from day one that I want someone who could guide me only when I'm taking the wrong route right and reroots me just like the Google Map I want to be the driver I put on the Google Maps to a certain location while I'm

going to a wrong direction can you just reroot me and tell me that you know this is the wrong way and you need to come back to your Basics I think it is largely towards I mean um not with the sharks it has not been that much because you know um at a point we also understood that you know they have a busy sket uh only certain points that you really want them to interfere you would want them to interfere uh with our investors currently I mean we would have chats about um you know what

is the outside world thinking about snitch or you know what is the next sort of uh big thing that we want to do Etc uh they might help you with getting the right sort of talent uh you know getting you in touch with the right sort of mentors that you want to meet in future all of those things but you can't expect someone to come in you know drive your business look they have invested money on you just because you sold them a story and if you can't fulfill that story it's your mistake no one

else's got it thank you so much sidar I have learned so much man and I'm just going to walk you through my notes quickly so that you can tell me if there's anything wrong with the summary that's very long uh yeah that's pretty long we started with a few important lessons you started as a Trader then became a manufacturer and then started running snitch and then you also mentioned something very very important that every entrepr is supposed to keep in mind that you have to be you could be slower but you need to be better

it's very difficult to scale a fashion business primarily because it's very difficult for you to manage inventory and pick categories so the model of the story from the first segment was razor focus is absolutely important in your case you stuck with men's appil and you did not Venture into too many things before you no even in men's we started with certain categories and then started building categories around it got it and this is after you got a very strong foot over for the existing categories and then the one thing that you picked over is that

men are quick and snappy so if you have a certain occasion this person should think about snitch and snitch must have all the things required for that quick and snappy person for that particular occasion and here's where your previous experience comes into play where you ran a small store and then you looked at what are the occasions where boys would go and shop and you had these occasions as going to the gym going to college going to party living in the hostel and going for an occasion like a concert here you had three parameters based

on which you were able to acquire these products which was color silvette and Trends and this was largely based on Europe and China then once you started with your business the fundamental reason for you to start this business is because you understood the power of value addition you understood that if you just keep trading you would make less money as compared to manufacturing and then trading and then you understood that you could make even more money and build a sustainable identity for yourself if you build a brand manufacture and trade all by yourself so and

then you spoke about the supply chain of a fashion brand this goes from design to procurement to sampling to R&D then to the factory where the mq is decided and then it goes to the wholesalers retailers whichever distribution chain you choose in procurement you mention mentioned that there are two ways in which you could get your products manufactured one is job work the other is FOB order the difference between job work and fob order is that in job work you buy the raw material give it to the manufacturer and they do the manufacturing packaging and

the rest of it but when it comes to the fob you give it to a buying house which is what you used to do before where they would do everything for you from designing to procuring the raw material to manufacturing it the cost difference between both these um both these methods is about 10 to 15% with buying house being more costlier with buying house being costlier than the job work and then you mentioned that the supply chain is broken and here's where you spotted a very big gap in the market when it comes to Big

Brands where they take anywhere between 8 months to 36 months to decide which unit to sell which color to sell which size to sell and to make that decision and then take it to the market it takes them anywhere between 8 to 36 months because of which they're not able to capitalize on Trends which gives a huge opportunity for fast fashioned Brands like yourself to be able to spot this trend manufacture a product and take it to the market quickly so that the customer buys it the market consumes it and then you can go on

to the next Trend here you mentioned that you look at keywords you look at hashtags you look at Global Trends and then you look at the wgsn Institute where you're able to spot all these Trends you zero down on one of these Trends you zero down on some of these trends and then you marry this with your own data to understand these Trends are fine but which one of these Trends will resonate with your customers and then you decide on your catalog you also mentioned that anybody could start a business with about 10 to 11,000

rupees if they don't have too much Capital to do all these things all they could do is go to a place like trur or Luda get hold of stock which is dead stock for the factory and this dead stock could be in terms of the fabric or the products themselves bu the products at their cheap price because it's anyways waste for them come to Mumbai and then sell it to the people who are here by which you'll get more and more capital and as you get more and more Capital then you can go for manufacturing

and when it comes to manufacturing you mentioned that when you choose your manufacturer this person has to operate like a co-owner of your brand you have to Define standardized Sops so that his job becomes easier like you mentioned the same setup that you have that makes shirts can also make pajamas you have to help them with skill development so that they can build great products for you and not just Outsource skill development and think that it's their job to do because if it's their job to do then you should also expect quality of their standard

so you should also contribute to skill development just like the Japanese companies do to their partners and then you got to look at compliance and wages wages because if there are no wages there are no workers compliance because as you become a larger company compliances are super super important and then we spoke about three categories that you mentioned are growing and here's where I asked you just like biryanis and Chinese which categories would you pick if you want to pick a growing category and here's where you mentioned t-shirts cargo pants and denims then we went

to the unit economics of snitch and here's where you told me that 48% is your cogs 20% is your marketing cost 7 to 8% is your Logistics cost and 7 to 8% is your ABA is that correct yeah roughly yeah okay and then you have about and because your adti about 7 to 8% your net profit it stands at about 4 to 5% great and then we spoke about the four key values of snitch you said treat people and consumers with respect you said get it right do it right create leaders in your organization because

no matter who comes in when they come in you have to look at them as Future Leaders so that they can go on to lead the team and they can see the ladder of success as your company grows bigger and bigger and lastly you said company first your values your interest will always come next then we spoke about your competition which is very very interesting Zara does a revenue for about 2,000 crores and you're already at 500 crores which is absolutely incredible and Zara does about 30% men 30% men which means you are practically bigger

than Zara in men right I mean I would I would not want to believe that okay I would want to believe that in two years for sure um and then here also we spoke about the incredible Pace at which we've grown like it took West Side about 12 years to get to the 500 CR Mark and for you it just took you 4 years and that is primarily because of the wealth of experience that you've had from your past after that we spoke about the multiple channels that you have and how you choose to operate

your stores the way you pick your stores is you look at all the customer data that you have from the online Channel you understand which which areas do you sell very well and you have a customer base of about 3 million customers that gives you a good triangulated data that you know in Mal West if you open up a store it's going to sell 3 crores worth of stock if you set up the store in and West it may sell 3.5 gr with a stock once you have a very clear idea you get to understand

counterintuitive places where you could open up your stores and you mentioned Hub because to the person next door hu sounds like a stupid idea but for you data says that it's a brilliant idea this gives you an insan advantage whereby you are able to spot those places which are potential blind spot for your competitors but you're able to enter that place and you're able to dominate them simply because of your data and this is also primarily because you use your d2c data e-commerce does not give you so many intricacies because you sold d2c you're able

to get a lot of data and that data is now enabling you to make better decisions which also draws a very important lesson that in d2c at the beginning you may not be very profitable but the data that you're getting is eventually going to give you the wealth of wisdom to be able to take bigger and Bolder steps which will eventually become profitable in your case it was the data that you got from your online sales which then helped you open up stores and now you have about how many stores 45 45 stores great and

then we spoke about MRA and auu and here you clearly said that it's just like YouTube get hold of a few mqs here here you say that it's just like YouTube get hold of 10 or 20 sqs 50 to 100 um mqs and you got to start small um focus only on organic growth do not engage in paid growth because if you do that then the validation will go a little bit of paid is okay but yeah more focus should little bit of paid is okay then you said you got to build your own community

on your socials and you got to consistently keep telling a story so that you can separate yourself from the noise and once whatever transaction is happening y d2c talk to your customers get hold of feedback incorporate that feedback and then make sure that in the next batch or the next talk that you're presenting to the customers these feedbacks are Incorporated and then you spoke about the expansion of Stitch which went into shoes bags sunglasses and fragrance and here the concept is very very simple just like Zara where people would like to have a curated outfit

snitch is also aiming to provide curated outfits where somebody goes for an occasion because men are quick and snappy just simply go and buy the entire outfit for themselves and you also mentioned that there are too many brands in the market which do not have a clear story and because you guys have a clear story The Brand snitch by itself it's almost like amul selling protein right because the Brand Story is pretty strong and you want to keep building that brand story in such a way that no matter what you sell whether that's shoes fragrance

bags or sunglasses people buy into the story of snitch fashion and not look at snitch as just another clothing company and then we spoke about your customer Persona which is 18 to35 digitally Savvy trendy who want comfortable clothes income between 30,000 to 3 lakhs and may have a two wheeler again there you know in the age bracket itself right uh one of the great learnings that we've received is if I have to enter someone's wardrobe the or someone's you know family wardrobe the number one thing that I have to crack is somehow enter the 23-year-old

first which is digitally Savvy make sure that he's got the right purchase for him to then you know start speaking about it within in within his family and the other key thing that we've learned is when I was a kid my father was the decision maker for me right used to take me to a shop you know make me shop for like 6 months and um period it's over today um you know the 23y old is more like the decision maker in the house uh you know his father wants to be cool with the son

that is why he would want him to you know sort of um resonate and try the brand that his son feels so if you've actually you know cracked the 23 to or 25 year old in a household uh chances of you getting more share in that family is very very high perfect and then we spoke about how you choose your store location this is about 10 to 11 ft height 25 to 30 ft facade is that correct yeah okay um I don't know what that means can you explain facad is the entry entry then you've

got you have a rent to revenue ratio about 10 to 12% which can go up to 18 to 20% as well depending on your gross margins but you stand at 10 to 12% so I would just consider that to be a marker of safety um and then you also spoke about the your inventory which should not go beyond 45 to 60 days beyond that you got to be a little I me it could go I mean it's very very difficult to control if you a core brand then it could go us set right yeah I

mean if you are selling Basics which is 365 days where you could hold up to 6 months also got it but when it comes to fast fashion 45 to 60 days is a healthy marker yeah I mean always important that you keep it as low as possible because if you don't have inventory you cannot sell and grow so you have to have the right sort of mix understood maybe if you're selling 100 pieces get in 110 110 got it and then we spoke about the same store sales growth which should be about 7 to 8%

and most importantly you should learn from your mistakes and just keep getting better and faster does that some of a conversation yeah absolutely one key hack that I would also you know sort of give a business idea which no one is looking at right everyone is just thinking about d2c d2c go online offline Etc there's a huge huge supply chain Gap in fashion a a huge opportunity in the B2B businesses right when I started snitch we started more like a B2B brand so um what we used to do is um traditionally a lot of Brands

would call if you were a multi you know multi-brand outlet store for example you have something called as things school store you would have 30 40 Brands which you sell inside the store every brand will call you 6 months prior and ask you to predict your sales and book stocks and then they will supply in 6 months um you know basis The Collection that they've curated uh there we you know sort of got in a differentiator which was we created a small app saying that every single day we will give you new styles theq could

be as low as 25 to 50 pieces and there is cash on delivery available that sort of you know skyrocketed the entire business itself because here the retailer was not worried about depending on you know what is the trend that will go on for 6 months how much do I book today Etc because he exactly knows as men at 25 shs B tomorrow morning I order 25 again so that again is a huge huge business opportunity which a lot of people have never looked at got it wonderful man thank you so much for spending so

much time absolutely thanks a lot Ganesh for having me here it was a pleasure bro thank you so much same here thank that's okay we'll send you some thank you bro thank you so much I would be very happy to receive it [Music]