Subject: Business in action

Name: Sayed Mujahid 

Module leader: Prof. Bose 

Student Id: St20095332 

Module number: BSP5071 

 
 
 
 
 
 
 
 
 

 
  

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Voonik 
-Disrupting the apparel industry. 
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By Sayed Mujahid 

 
 

 
  

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Table of Contents 

 
                              ​        ​Topic  Pg. 
Introduction  4 
 
a) India - The next biggest Ecommerce Market. 
b) Why China is an Ecommerce outlier? 
c) Indian Government’s initiative to boost 
Ecommerce. 
d) Internet users in India and effect of JIO on 
internet usage. 
e) Ecommerce market in India and possibilities for 
new entrants.  
 
Marketing strategy  7 
a) Female Economy in the world. 
b) BCG survey.  
c) Voonik target market. 
d) Product positioning of Voonik. 
e) SWOT analysis of Voonik. 
f) Advertisements and Social media Presence of 
Voonik. 
Finance Strategy  10 
a) Bootstrapping vs. Investor Funding. 
b) Initial funding. 
c) How is Voonik using every ounce of Investor 
funding.  
  

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                                        ​Topic  Pg. 
Human Resource Strategy  13 
a) Hiring Policies of Voonik. 
b) Culture at Voonik. 
c) Acqui-Hiring and team building.  
d) Organisational Structure and HR strategy of 
Voonik. 
 
Information system  16 
a) Backend system of Voonik. 
b) How Voonik optimises on cost and resources using 
technology? 
c) Artificial Intelligence and its impact on the 
company. 
 
Conclusion  18 
a) Is there a Ecommerce bubble formation in India. 
b) Customer and Company Barrier. 
Bibliography  19 

 
  

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INTRODUCTION:  ​The intensity of E-commerce battle in India has gone up with

the entry of Alibaba- China’s E-commerce heavyweight. According to the figures
from the Economist, E-commerce industry of China experienced 600% of growth
from the year 2010-2014 resulting in the emergence of Alibaba with the net worth
of $28.6 billion. The fact that China is the world’s manufacturing hub and any
Chinese manufacturers were finding means to sell the surplus inventory made
Alibaba an outlier. The case of Indian Ecommerce is not as same as that of China.
India is a home to a number of cultures, ethnicity and languages; thus creating a
challenge for the companies in their marketing campaigns. Logistics is an integral
part of an E-commerce business and Indian roadways are not developed enough to
conduct logistics smoothly. The current Modi Government understands the
importance of roads and its far-reaching effects on the Indian economy and hence
in the budget of 2017, a sum of Rs 64,000/- crore was allotted to the Ministry of
Road Transport and Highways of India-​(News 18, 2017). Also, the introduction of GST
(Goods and service Tax) is a significant step in this course. With a vision to boost
manufacturing sector in India’s Prime Minister, Mr Narendra Modi has initiated the
“Make in India” campaign giving companies the required environment and
atmosphere for business

(IAMAI, 2015)
(Figures are in crore Rs)
  

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Out of 1.3 billion, 340.2 million people in India are smartphone users constituting
25% of country’s population. Only 34% of the population India’s population has
experienced the luxury of an internet ​-(Internetlivestats.com, 2017)​. The number of
smartphone users in India is skyrocketing. According to The Economist, one in
every four cell phone sold in India is a smartphone. After Reliance JIO coming into
the picture, the number of internet users in India has gone up, with 50 million users
in a span of 83 days; JIO was successful in making world record and became
world’s biggest data-carrier -​(Business today, 2016)​. These statistics are very insightful
and convey a lot about India’s growing economy. The industry that is directly
influenced by these figures is the Ecommerce industry.

After China, India is said to be the biggest E-Commerce marketplace, leading to

giants like Google, Facebook and Uber trying to get a stronghold in this region of
Asia. The big picture on E-commerce has international companies like Amazon
compete with the local, in-house companies like Flipkart, Paytm and Snapdeal. The
micro image has emerging players like Voonik, Shopclues, Zovi and Koovs;
however, Voonik is outperforming all the companies and soon would be in the
league of the giants. Voonik is a Bengaluru based company and was started in the
year 2013. As of 2016 has the company has 450 employees. This essay will
highlight on marketing, HR, Finance and information system strategies of Voonik.

 
  

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Marketing  Strategy: In an HBR article on “The Female Economy”, Michael

and Kate mentioned that the female market in the world is bigger than the GDP of
China and India combined. This research was published in the year 2009 and it
claimed that Female market would grow as high as $28 trillion by the year 2014.
The article also emphasised on the $47 billion apparel industry and gave significant
inferences on the apparel industry.

-​(Sayre and Silverstein, 2009)

BCG surveyed more than 12,000 women of different demographics, income group
and age, countries and ethnic backgrounds to find out that for women the two
things that matter the most while buying apparel is fitting of the cloth and
reasonable pricing. The report concluded by indicating scope to improve comfort
and fit along with good fabrication and colour.

STP:  ​Voonik has made efforts to deliver good fitting products at reasonable rate.
Voonik was successful in attracting tier-1 and tier-2 cities by its budget-friendly
pricing and great customer services.
  

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As of 2016 Voonik has 20 million users, consisting of 25% tier-1 and remaining
75% from tier-II and tier-III cities ​-(Peermohamed, 2017)​. Capturing tier-II and tier-III
market is challenging as customers in those regions of India have not yet embraced
the concept e-commerce.

SWOT:  ​Customer experience and loyalty are the top priority at Voonik. In the year
2016 Voonik acquired Dekkoh an app startup that helps users to directly chat with
a personal stylist and allows them to make better decisions while buying online.
Moreover, to provide better fitting clothes, Voonik has collaborated with Mad
Street Den that helps the Voonik in making Artificial Intelligence (AI) modules
that form a visual of the customer according to the measurement inputs given by
the user. This technology is helping to bridge the gap between digital and the
physical purchase convenience of the customers. The pace at which AI is growing
it seems that it will not only disrupt the market but also our society as well.

In a startup, nothing can be “All good.” A review report of 472 voonik customers
can be alarming for the startup. Mouthshut.com is a review website in India that
helps Indians to rate the experience they had with certain goods or service.
Following is the review of more than 400 people about Voonik and its services.
Out of 5, overall product satisfaction of a voonik product was 2.21 points, while
35% of the reviewers considered of recommending the company to their peers and
relatives. Customer service, product reliability and product quality were rated 2 out
of 5; while delivery time and user interface of the app/website was rated 3 out of 5
-(Mouthshut.com, n.d.)​.

These numbers indicate that customer is the most important variable in the
equation of a successful business. Hence, with an intention to build a loyal
customer base the company has decided to launch a loyalty program similar to its
  

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rival Amazon called Primo ​-(Menezes, 2017)​. Through this program, customers will
receive free shipping of goods and also customers will have access to an exclusive
range of products. Primo customers will also have access to video chat with a
fashion stylists using Dekkoh. In an interview with Business-Standard, CEO and
Co-founder of Voonik Mr Ali said that currently, it is competing with Amazon and
Flipkart and not with fashion E-commerce platform like Myntra, Koovs and Jabong
as the later caters only to the premium market segment. The startup has a 48.5k
Instagram following and more that 1 million facebook likes.

(Play.google.com, n.d.)

Voonik depicting Indian women in ethnic wears.

To target its customer base Voonik started a T.V campaign promoting the idea that
every day is an occasion to be fashionable with the tagline of ​“Har din Fashion
karo.” The campaign was designed to target women’s desire to fashion every day
while keeping the budget conscious nature of Indian women in mind.

 
  

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Finance  Strategy:  ​The very next step after having a business plan ready is to
arrange for its finances so as to make the business model a sustainable one. There
are debates on the topic of “Bootstrapping vs. Investor funding” and both have
their pros and cons. In the end, it all boils down to the amount of risk the founders
are willing to undertake, the amount of control they want in the company and
structure of the business model. Some startups like Voonik do a mixture of both, by
initially bootstrapping and later receiving funds from investors for further growth
of the business. In its initial days, till the MVP (​M​inimum ​V​iable ​P​roduct) of the
company was ready, voonik followed the strategy of bootstrapping. In its budding
years (2013), the co-founders met the Mukesh Bansal, the CEO of myntra who
liked the business plan and he then not only invested a small amount but also
agreed to mentor the team. Later, they participated in the “The pitch” a Bloomberg
T.V program and ended up winning the show. The winning prize was seed funding
from a Seedfund, and thus Voonik received a seed fund of 2.5 crores against 30%
of company’s stake ​-(Crunchbase.com, n.d.)​. Later the company decided to participate in
Microsoft Ventures program, as the funding was non-equity ​-(P NAIR, 2016)​. The
funding gave the startup a leverage to make bold business decisions. According to
Tofler, Voonik has a debt-equity ratio is 1.61. In August 2015, Voonik acqui-hired
Trialkart, a virtual dressing room app. Hardly six months later, it acqui-hired
Getsty, a curator of personalised fashion for men following which Voonik launched
Mr Voonik. Before launching Vilara the company bought out online occasion-wear
brand Zohraa. At the same time, it announced that it has acqui-hired Styl, an app
that connects salons and stylists to users, as well as Picksilk, an online silk store for
handloom sarees, for technology. In the year 2016, Sequoia Capital invested
$20million in Series B funding ​-​(Crunchbase.com, n.d.)​.
  

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These funds were raised to enhance customer experience and to scale the business
into other categories. The launch of Primo and growth of Mr Voonik and Vilara are
an outcome of this strategy.

Funding to Voonik since its inception (Excel report).

It is very surprising to notice that Voonik is receiving multiple fundings and

investments at the time when other E-commerce heavy-weights are struggling with
investments and valuations. The flip side of multiple investments is that it takes the
company away from its breakeven. But, Mr Ali claims to achieve breakeven by the
end of December 2017. According to Crunch base, Voonik has received equity
funding of up to $31.5 million while as of 2016 it has a turnover of $13.6 million
according to the statistics of financial express for women apparel section alone.
  

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Voonik recently hired the CFO of Myntra, and in an article, Economic Times
mentioned that the company is maintaining 15-20% of monthly growth and has a
Gross Merchandise Value of $100 million (including the GMV of Vilara and Mr
Voonik). The fixed cost of the business is managed by the commission from the
sellers on the portal which is 20%. As of 2017, for every Rupee, the company spent
on customer acquisition it received back through commissions. The company has
also focused on cutting down the cost by automating work that was manually
performed. The benefit of automating is both human errors and the cost is reduced.
By the end of 2017, the company will have will AI based chatting system and
shifting its focus on video chatting with stylist using the Primo. Voonik seems to be
using its funding to disrupt the Ecommerce industry.

 
  

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Human Resource Strategy:

In a talk show Gary Vaynerchuk- CEO of Vaynermedia said that building HR

foundation in a company is like parenting, and the results of the excellent culture
could be experienced in not less than 10 years. Many companies fail to understand
the importance of HR and its far-reaching effects. Unlike corporate culture, SME
and startup culture is a different ball game. “SMEs have the opportunity to create a
work-friendly, easygoing environment with an open culture so the employees can
relax and focus on work. HR managers working in such small-scale companies can
easily resolve workplace problems by having one-on-one interactions with the
employees and share valuable information.” ​-(HR Strategies for SMEs and Startups, 2015).

Hiring the best candidate is very difficult when it comes to startups as they have
  

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limited resources and at times the candidate should be able to perform multiple
roles.

Voonik follows certain guidelines while hiring an employee:

● Voonik hires based on references, this method is more effective as it helps

prevents recruiters to avoid filtering candidates by going through their CVs
and Linkedin profiles. “In startups where the entire growth depends on
correct hire, ensure hiring happens reference basis.” - Ali,2016. Voonik
generally hires people working in the eCommerce domain
● The company hires the candidate who has leadership skills and who is a
team influencer.
● An all-rounder candidate has a higher probability to get hired as at times
employees have to be flexible and are expected to step out of their roles ​-(How
not to make hiring mistakes in a startup, 2016)​.

Voonik follows proactive HRM strategy. Voonik as a startup has made

phenomenal acqui-hires which have multiplied the strength of talented employees
in the company. Acqui-hiring helps a company to get a team that has already
worked on many projects together.

Since its inception, Voonik has acqui-hired six startups of different genres in the
fashion industry. Voonik also hires from modern hiring platforms like Hiree.
  

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Recently Voonik hired Raghu Lakkapragada, a former executive of Amazon India

as the COO and Himmat Padode, a former executive at Groupons as their chief
data scientist. In the year 2016 Voonik hired Prabhakar Sunder Ex-Finance Head of
Myntra as the CFO, thus making it clear that for leadership roles company hires the
best of the executives available in the industry, who have experience working with
startups. Voonik follows a flat structure system, allowing the employees to have
access to their leaders. At Voonik employees are motivated to take new initiatives
and new ideas are always encouraged in the company. As of 2016, Voonik had 450
employees. Glassdoor is one of the largest recruiting websites in the world and
helps employees select companies on the basis of reviews given by existing
employees. 30 employee reviews on Glassdoor, Voonik has a rating of 4.0 out of 5
and 85% of the employees were willing to recommend the company to their
friends. Note: these figures could be subjected to the “law of small numbers” bias
as the number of reviews compared to employees working is too low.

“Finally, the HR Strategy for the Start-Up Business has to be as simple as possible.
The team has to focus on key priorities. HR has to source the company with new
hires. HR should not spend time designing sophisticated processes and benefits. No
one cares about them. They just need the agile Human Resources Management that
fits the needs and requirements.”- ​(Best HRM Strategies for Start-Up Businesses, n.d.).

 
  

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Information  System  Strategy:  ​This section of the essay will discuss the
technologies that Voonik uses to stay well-organised and cost-effective. For the
Web server, Voonik uses Nginx which is a free and open source HTTP server and
contains additional features of proxy and reverse proxy. Nginx is known for its
durability, stability rich user interface and low resource consumption. Along with
Nginx, Voonik also uses Rack-cache for caching Rack-based applications -(BuiltWith,
n.d.)​. G-suite, a cloud-based google product helps teams to connect and use google
services like google docs, calendar and drive. This package is useful as the team is
able to work together without the requirement of physical presence of the entire
team in the office. G-suite uses AI technology to understand the user needs and its
comprehensive security system makes it more reliable and trustworthy. The
company also uses Workplace by Facebook that helps the group to connect via
audio and video calling and helps the team to engage in discussion through
Facebook. Since its inception, Voonik has tried to make its company
customer-centric. For customer convenience, the company uses Freshdesk, a
cloud-based customer support platform to solve customer grievances and to engage
with them via email. The company is hosted by Amazon and Akamai hosted while
SSL certificate is provided by GoDaddy ​-(BuiltWith, n.d.)​. Ruby on rails is an open
source programming language and web framework of Voonik is designed on this
platform. For its E-commerce website, the company uses Cart functionality, HTML
and CSS. For Analytics and tracking, Voonik uses multiple platforms and services
and some of which are New relic, Google analytics, Vizury, Facebook pixel, yahoo
dot, Yahoo web analytics, Everest Technologies and much more. Jon Epstein in his
blog mentioned that AI is disrupting business and out the top affected industries is
the retail industry. Voonik has a hawkeye on the AI innovations and is using the
technology to grow its business.
  

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Initially, Personal stylists used to recommend clothes to the customers through the
acqui-hired startup of Dekkoh and now as they have decided to shift the workforce
of the stylists onto the video chat system of Primo, the company has introduced AI
chatbots to help customers decide for them. Voonik has a collaboration with
Madstreetden and it provides the company with VUE.AI.

The salient features of VUE.AI are that it stores user behaviour history, takes
measurement inputs from the customer and provides a visual structure of the
apparel on their body. It also generates similar results that the user might be
looking for after analysis the search patterns of the user and it also optimises
logistics through its computer vision and hence minimising human errors. This
technology also helps to manage inventories but currently, voonik does not operate
with inventories. Marketing campaigns and trend prediction have become
somewhat possible with the help of AI as it works on the principles of predictive
analysis providing a scope for marketer to understand customer behaviour in more
structured manner.

From driving our cars to selecting our wardrobes, AI has already begun to take
roots in our lives and it will soon bring a tremendous change in human civilisation.
The coming era would be the era of artificial intelligence.
  

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Conclusion: There is no doubt that a lot is happening in the eCommerce

industry and Voonik is also a part of the action. In the end what matters is, “who
has the biggest slice of cake?” Amazon and Ebay were the pioneers in changing the
customer’s perceptions regarding online shopping and entry of Flipkart and
Snapdeal made customers more satisfied and E-commerce became more reliable.
These heavyweights have made a solid platform for the new entrants in terms
customer reliability but at the same time made it difficult for them to survive in the
market due to their customer retention strategies.

The image below discusses the barriers between customers and the Companies.

-​(Puro, 2016)

The biggest challenge for E-commerce startups is the fund management as every
penny in this cut-throat competition matters. There are two extreme opinions
amongst experts on the topic of Indian E-commerce. Either it is the next biggest
E-commerce market after china or maybe it could be a beginning of an
“E-commerce bubble”. The big picture of the Indian E-commerce is still distorted
and the fog seems to get clear by 2020.
  

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