Conversation with Merlin [email protected] · Wed Nov 22 2023

Fashion startup boom in Northeast India. Fashion Network.by Das, T. (2021).

The fashion startup ecosystem in Northeast India is experiencing a significant boom, in line with the broader growth of India’s direct-to-consumer (D2C) market. This trend is part of the country's D2C market, which is anticipated to reach $100 billion by 2025, having expanded greatly in recent years. The digital infrastructure's growth, higher internet penetration, and an increase in the number of millennials are among the factors that have contributed to the growth of D2C brands in India.

Fashion startups account for the largest share in the D2C segment, reflecting the substantial potential of India's fashion industry, which is expected to reach $43.2 billion by 2025. Several factors, including the impact of the Covid pandemic and the evolving preferences of Indian consumers, have propelled the success of D2C brands. The waning loyalty towards traditional players has created a favorable environment for new-age D2C brands to capitalize on the growing appetite of Indian consumers for innovation.

Moreover, the emergence of successful D2C brands like Mamaearth, CaratLane, and Nua within just a few years showcases the success potential within the country. This growth extends to the Northeast region, where an increasing number of young entrepreneurs are establishing their businesses, attracted by the abundant natural resources and supportive government policies and private initiatives. State government policies, such as incubation centers and startup policies that aim to facilitate the growth of new startups and create employment opportunities, are contributing to the development of the startup ecosystem in the Northeast.

This overall trend underscores the increasing importance of the fashion startup ecosystem in Northeast India within the wider context of the country's growing D2C market. It also highlights the opportunities presented for entrepreneurs and the potential for further growth and innovation in the region's fashion industry.

Indias direct-to-consumer (D2C) market, which is likely to reach a size of $100 Bn by 2025, has grown exponentially in the last few years Fashion startups account for the largest share in the D2C segment as the countrys fashion industry has the highest potential and is expected to grow to $43.2 Bn by 2025 D2C brands aim to capitalise on the growing appetite of Indian consumers for innovation and waning loyalty towards traditional players Indias direct-to-consumer (D2C) market, which is likely to reach a size of $100 Bn by 2025, has grown exponentially in the last few years. Several factors including the Covid pandemic, higher internet penetration, growth of digital infrastructure and rise in the number of millennials, among others, have shored up the D2C brands. Home to more than 190 Mn digital shoppers, India has the worlds third-largest online shopping base in the world. It is this burgeoning ecosystem that the new-age D2C brands aim to capitalise on, on the back of the growing appetite of Indian consumers for innovation and waning loyalty towards traditional players. Of this, fashion and clothing startups have the highest potential and are expected to grow to $43.2 Bn by 2025, according to an Inc42 report. Some of the emerging D2C brands including Mamaearth, CaratLane and Nua merely took a couple of years to reach INR 100 Cr revenue mark. This is a testament to the success of D2C brands in the country. Lets take a look at some of the popular D2C brands in the country. The list is not meant to be a ranking of any kind. We have listed the Indian D2C startups in alphabetical order. 1. 82E Founded in 2021 by Bollywood Actress Deepika Padukone and Jigar Shah, 82E is a direct-to-consumer (D2C) personal care brand. It sells four skincare products moisturisers, face oil, cleanser and sunscreen in the price range of INR 1,200 and INR 2,900, as per the companys website. In December 2022, it secured $7.5 Mn in seed funding from DSG Consumer Partners, IDEO Ventures, Padukones family office, and some ultra-high net worth individuals (UHNIs). It also has a research and development lab in Bengaluru city. 2. Anveya Living Founded in 2018 by serial entrepreneur Saurav Patnaik and a former FirstCry executive Vivek Singh, Anveya Living sells sustainable hair and skin care products. In 2022, the D2C startup launched its flagship products Colorisma and Curlvana and added a gold acne kit to its offerings. The startup clocked a revenue of about INR 11.7 Cr in the fiscal year 2021-22 (FY22). The Bengaluru-based startup aims to clock a revenue of INR 45 Cr in 2023. It has added more hair care products to its offerings. In February 2022, Anveya raised INR 8 Cr in a seed funding round from Venture capital firm Rukam Capital. 3. Arata Founded in 2017 by Dhruv Madhok and Dhruv Bhasin, ARATAs first-ever product, a homemade hair gel, came to being around Madhoks wedding. Madhok had made the chemical-free hair gel for Bhasin. 24 months later, the D2C brands first product was sold on its website and the company took shape. The startup derives its name from the Japanese word Arata, which means fresh and new. ARATA finds its differentiation in the chemical-free beauty and skincare segment, and its range includes products such as hair gels, hair creams, shampoos, conditioners, toothpaste, face wash and serums. The D2C brand procures ingredients globally and locally from certified organic farms, which are developed into finished products after extensive research and development (R&D). The startup claims to offer zero-chemical and toxic-free personal care products that use only recycled plastic for packaging as part of its sustainability promise. The D2C brand currently has 26 SKUs and a user base of more than 5 Lakh customers. It claims to have sold more than 7 Lakh products by mid-2022. However, a majority of its sales, around 70%, take place from ecommerce marketplaces such as Amazon, Nykaa, Flipkart, and BigBasket. 4. Atomberg Set up in 2012 by Manoj Mee

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Arindam Dasgupta, founder, Tamul PlatesImage: Surajit Sharma for Forbes India About 100 km from Guwahati lies the tiny district of Barpeta, where an unmetalled road wide enough for just one vehicle winds its way through lush greenery. On a 0.3 hectare piece of land there, almost entirely covered with dried areca nut leaves, stands Tamul Plates. Set up in 2010 by Arindam Dasgupta (23), the facility produces 10,000 to 20,000 units of tableware made from areca leaves per day. Although there are multiple companies in Kerala and Karnataka making tableware from areca nut leaves, Dasgupta was the first to do so in the northeast of the country, making use of the regions abundant natural resources. The company has received a total funding of 45 lakh from Upaya Social Ventures and Rianta Capital, and as Dasgupta says, is planning to buy 1 hectare land somewhere close by and soon move our production facility there. Dasgupta is an example of a new generation of young entrepreneurs who are choosing to set up their fledgling businesses in Assam and Manipur, not just for their abundant natural resourcesWe decided to use dried leaf sheaths of areca nut trees to make tableware, but there is so much work being done with bamboo and other resources as well, he saysbut also state government policies, as well as private initiatives. For instance, Assam has set up an incubation centre, The Nest, in Guwahati along with Indian Institute of Management Calcutta Innovation Park. Pranjal Konwar, COO of The Nest says, Assams startup policy aims to facilitate the growth of about 1,000 new startups, and create direct and indirect employment for 1 lakh people over five years. There are other incentives under the policy such as GST reimbursements, lease rental subsidies and power subsidies. The Nest has been instrumental in encouraging innovation and technology in the state. Companies such as Zerund (it makes bricks with cement and plastic powder instead of red clay), Little Machines (it makes a portable digital microscope), Lenshood (a photography equipment rental portal) and My3Dselfie (it makes 3D figurines on sandstone) are some of the startups that are now part of The Nest. When it came to understanding finance and management, the basics of how to run a business, we had no idea. In such cases, the seminars and programmes by The Nest really helped us, says Ravi Chakravorty of Little Machines. Apart from government support, there are individuals who are returning to their hometowns to mentor and support entrepreneurship in Assam and Manipur as well. Imphal Angels, set up last November, is a network of angel investors. We realised that if someone founded a startup here, it would work well for a while and then fizzle out since there was a lack of connectivity with the rest of the world, says Fisher Laishram, partner, Imphal Angels. We wanted to do something to give these startups the exposure they need. The network organised the first ever Northeast Startup Summit in 2019 to help startups from the region understand the nuances of running a business, and create a network of entrepreneurs. Of the 10 selected applicants, the winner received 3 lakh funding from the summit. In the Northeast, any and every other company set up is seen to be a startup. We are trying to redefine this concept, and help people look at startups as companies that are highly scalable and asset-light, says Chingakham Priyobrata Singh, partner, Imphal Angels. The Manipur government implemented the Startup Manipur policy in 2016, and provides new enterprises with subsidised loans. It has plans to set up a state-funded incubation centre, offer preferential lease of land, access to government R&D labs, and funding of up to 10 lakh to colleges in Manipur to set up Entrepreneurship Development Centres.Homing inDifferent entrepreneurs may have different reasons to set up businesses in Assam and Manipur, but the common factor is their wish to develop their home states. (left)Zeinorin Stephen and

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India is increasingly a focal point for the fashion industry, reflecting a rapidly growing middle class and an increasingly powerful manufacturing sector. These forces, together with strong economic fundamentals and growing tech savvy, make India too important for international brands to ignore. Indeed, Indias ascent is one of ten trends the fashion industry should watch in 2019, highlighted in our latest State of Fashion report, written in partnership with the Business of Fashion (BoF). Economic expansion is happening across Asia, but we expect that 2019 will be the year when India takes center stage. The country is being propelled by strong macroeconomic tailwinds, and its GDP is predicted to grow 8 percent a year between 2018 and 2022 (exhibit). Indias middle class is forecast to expand by 1.4 percent a year over the same period, outpacing China, Mexico, and Brazil. As a result, India is set to evolve from an increasingly important sourcing hub into one of the most attractive consumer markets outside the Western world. Indias apparel market will be worth $59.3 billion in 2022, making it the sixth largest in the world, comparable to the United Kingdoms ($65 billion) and Germanys ($63.1 billion), according to data from McKinseys FashionScope. The aggregate income of the addressable population (individuals with more than $9,500 in annual income) is expected to triple between now and 2025. According to Sanjay Kapoor, founder of Genesis Luxury, an Indian luxury retail conglomerate, higher incomes are likely to create a whole new class of consumer: We are moving on toward the gold collar worker. Its a term that defines the well-paid, highly paid professionals, who are happy to look good, happy to feel good, and are expanding the consumption of today. Given these dynamics, it is little surprise that more than 300 international fashion brands are expected to open stores in India in the next two years. But India remains a complex market that presents challenges as well as opportunities. The apparel business is still largely unorganized, with formal retail accounting for just 35 percent of sales in 2016. Its share is likely to reach around 45 percent by 2025still a relatively low proportion. To build momentum around conventional stores, Indian players are innovating: retailers are leveraging technology to enhance the in-store experience with digital marketing displays and improved checkout. For instance, Madura Fashion & Lifestyle launched the Van Heusen Style Studio, which uses augmented reality to display outfits on customers. Malls have also increased their share of space devoted to food service and entertainment. The growth in the apparel sector is also being driven by increasing tech savviness among consumers. Ten years ago, technology was for the few, with just five million smartphones in a country of 1.2 billion people and only 45 million Internet users. These figures have since increased to 355 million and 460 million, respectively, in 2018, and they are expected to double by 2021, when more than 900 million Indian consumers will be online. E-commerce leaders are moving to solutions based on artificial intelligence. Personalization and curation based on personal taste will become a lot more important, says Ananth Narayanan, chief executive of Myntra, a fashion e-commerce player acquired by Flipkart in 2014. Its not about having the largest selection; its about presenting the most appropriate selection to the customer involved. The supply side of the industry is equally robust, and the growth of textile and apparel exports is expected to accelerate. According to a 2017 McKinsey survey, 41 percent of chief procurement officers expect to increase the share of their sourcing from India, where average labor costs are significantly lower than Chinas and comparable to Vietnams. Raw materials (such as cotton, wool, silk, and jute) are highly available, which enables participation in the entire fashion value chain. Still, players loo

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