Artha India Ventures’ portfolio company Coutloot recently raised $1 million in a new round of funding that was led by the investment arm of Chinese unicorn CashBUS. The round also saw participation from existing investors, Artha India Ventures and Venture Catalysts.
Coutloot is a Mumbai-based social Consumer-to-consumer tech platform where users can buy and sell new as well as preloved fashion. It was founded in 2016 by a young team of Mahima Kaul, Vinit Jain and Jasmeet Thind. This mobile-first C2C (Consumer-to-Consumer) tech platform for fashion has recently raised $1 million in its pre-series A round.
Sector Outlook — opportunities in Consumer tech in India:
The consumer tech sector of the country has risen rapidly because of the growing digitalization and internet penetration. But the bottom three tiers of the country suffer from four major problems i.e. access, quality, selection and price. Without the right solutions, the internet only exacerbates these problems, not solve them. For example, for the first time, a girl in Kanpur (or any small town/village) is aware of what her favourite actor wore on the red carpet within minutes through her smartphone. However, her family’s resources prevent her from buying anything close to it. But therein also lies the opportunity. India is a high aspiration country and the digital consumer segment is largely driven by these aspiring youngsters
Entrepreneurs who bridge this unique access-aspiration gap have the potential to build billion-dollar companies using technology as an enabler. If one wishes to cater to the Indian consumer, the solution required is not that elaborate. We need basic products requiring innovation in bridging the access-aspiration gap. The next billion-dollar consumer company will have to be a healthier, tastier masala chai equivalent, and not a pumpkin spice latte equivalent. But what will be different now is that technology, for the first time, will enable better, be capital efficient, and result in faster scaling of businesses across the spectrum than ever before.
Coutloot jumps the bandwagon:
The idea of selling unused fashion apparel struck Jasmeet when he had to shift his room and, in the process, had to empty his closet. While he didn’t want to throw away his branded but unused clothes, he couldn’t use it either. Reasons being, changes in size, clothes being out of fashion etc. It was then that he looked up for a website or an app that could help him make some money by selling these unused, good quality clothes that crowded his closet. However, he found no website or app that can do this for him without him having to go through the hassle of contacting the buyer and negotiating on its price.
Taking inspiration from the US-based Poshmark and South East Asia based Carousell, Jasmeet thought of developing a similar platform in India where the millennials could not just sell their branded, unused clothes but can also buy pre-owned clothes and keep up with the fashion trends, dirt cheap pricing being the crowd puller. His interactions with Mahima and Vinit (co-founders), and their market research proved that this was a problem no one in the country had addressed. While the classifieds platforms in the country like OLX or Quickr enabled the buyers and sellers to interact and transact directly, they weren’t fashion specific. Also, some of the fashion reselling apps that existed at the time were not appealing to consumers. The founders were then convinced that the problem of overflowing closet that everyone faces, provided a good opportunity to explore and cater to. This gave birth to creating Coutloot- a trustworthy and authentic platform for consumers to buy and sell pre-owned as well as new fashion. Which has now evolved to a mission where CoutLoot wants to empower every Individual to start selling online, be it a small business owner or a first-time seller, Coutloot’s mission is to create 25 Million Entrepreneurs by 2022
The step forward:
They developed a website quickly after this while still doing their regular jobs. In January 2016, they decided to make it big and the founders quit their jobs to work on Coutloot exclusively. Once their app was ready and they acquired a good user base, they decided to seek funding. It was at a Venture Catalyst pitch event, they met Artha India Ventures. They received a seed funding of 60 lakhs post which they have grown by leaps and bounds. In fact, in December 2016, Coutloot was selected by US-based social media behemoth Facebook Inc. for its FbStart programme and then selected by Facebook once again in 2017 for the She Leads Tech Cohort.
In the growing consumer-centric market of India, convenience and price point are given the topmost priority. The young generation is all about getting things done by just a tap of their fingers on the phone may it be food, clothes or anything else. Unlike OLX or Quickr, where people negotiate and make the deal themselves, Coutloot takes care of the entire transaction from picking up the product, checking it for quality, ensuring it is defect free and delivering it to the buyer. This makes the entire process completely hassle-free and convenient which is exactly what their customers are looking for.
Coutloot’s business model:
Coutloot is relevant and specifically targeted towards the age group of 17–25 years which also constitutes 90% of their customers. They charge a pick-up fee of Rs.35 on every product that is sold as well as take a commission of 15% per product. Apart from this, they do the quality check of the product, repack it and deliver it to the buyer at a delivery charge of Rs. 80.
In the case where the product doesn’t have a standard quality, the seller loses their cash and is charged a fine of Rs.200 before listing other products on the platform. To avoid such occurrences, the delivery person carefully checks the product for quality defect or misrepresentation and if not satisfactory, it is not picked up. CoutLoot also has a trusted “meet & buy” model where sellers and buyers can meet and transact offline without having to share their phone numbers, the CoutLoot chat can schedule and track offline meetings.
Being a C2C platform, checking the quality of the products that are being sold and bought on their portal is the most crucial part of Coutloot’s business. They always make sure that the customers on their platform have a hassle-free experience. For this, there is a list of things they do viz. brand check, collection check, label check, fabric check, damage or stain check, disinfection and sanitization. Curated by fashion experts, the products dwell in a no non-sense inventory, all done in collaboration with their logistics partners. The app’s algorithm also checks the image quality of the products the sellers list on the app. If the image is blurred or is directly pulled from Google or any other source, it is automatically rejected.
When a seller lists any product on the app, they are given a clear break-up of the earnings. Such transparency with the users helps in gaining their trust and they keep coming back to list more of their products.
In the last 3–4 months, the business has grown to 500K active users per month. They do over 500 pickups a day and over 19000 products are being sold every month.
One of the major reasons for Coutloot’s popularity and rising user base is the association of many TV celebrities and social media influencers with the brand. Celebrities like Aditi Bhatia, Karishma Tanna, Aarti Chabbria and 5000 more top influencers sell their customized fashion on the app making Coutloot popular among their fans across India
However, it is more than celebrities that have kept the ball rolling. The founders keep making alterations to their product based on customer feedback and continuously develop their portal to serve its users better. They are introducing new features every other day, trying and testing them and understanding customer behaviour.
Recently, they introduced a new category of the product i.e. the mobile phone campaign that played out excellently and increased their sales and revenue.
More than a re-commerce business, Coutloot wants to advance as a social platform where people can discuss, bargain, sell and buy inexpensive, high-quality clothes and accessories. They wish to focus on the five main things that millennials will always look for online:
4. Finding rooms
5. Ticket, general items
The numbers speak for themselves:
Since its inception in 2016, Coutloot has expanded across the country and grown exponentially. It began with charging a 25% commission when the volumes were low and barely sold 100 products a month. But with the introduction of more features and products on their app, the sales have grown and around 300 online transactions take place every day. Also, with the introduction of offline feature where the buyers and sellers can schedule a meeting, decide a place and time to meet and sell/buy the product, their sales boomed, and they see more than 500 transactions happening daily.
The Coutloot app has been downloaded by more than a million users including a lot of bloggers, social media influencers and celebrities which has boosted the standard of the app, attracting more buyers who want to shop the branded closet of the celebrities but at a lower cost than the original. This is helping them in increasing their monthly turnover. It is indeed building the social C2C commerce in India.
The most difficult challenge that Coutloot has had to overcome is breaking the taboo about buying pre-owned clothes when they started off the business. They had to make sure they only offered good quality products, that were fashionable and at a hugely discounted amount than the original cost. Coutloot successfully managed to do this by keeping a quality-controlled and heavily monitored inventory and a strict quality check on all the items.
Getting bloggers and celebrities on board has further increased the number of buyers on their platforms as a lot of followers from across the country want to wear clothes from their favourite celebrity’s closet. These bloggers and celebrities have essentially made a statement that the second hand is cool and helped Coutloot break the taboo.
Coutloot has opened doors to the $12 Bn worth of quality goods kept in the Indian houses and also take the other $30Bn offline lifestyle market, online. Since India has always been a price conscious market, the ‘Bargain’ feature on the Coutloot app has been an instant hit. Especially in tier 2 and tier 3 cities, where brands aren’t easily available, and people cannot afford their high costs, Coutloot has hit the right spot by providing a solution.
Jasmeet believes that, as a founder, one must give the user what they want and eventually bring out the change they intend to, with their product. Coutloot has succeeded in maintaining a problem-centric approach that evolves based on user needs. He values three things the most; first, family- these are the people who make the company what it is (employees, peers, partners etc.). Second, the experience and learnings from the ups and downs in business, how to get through them together, and third, the legacy one leaves behind.
This post was originally published on Medium in Artha India Ventures on 11 December 2018 by the author as part of her work at the company.