Mensa Brands bets on ethnic groups for growth; forecasts $250 million in revenue from ethnic apparel over the next 4-5 years, Retail News, ET Retail
New Delhi: Style company Thrasio Mensa Brands has decided to bet on ethnic clusters for its growth as it is the largest fashion segment with a market of around $3.5 billion, according to Ananth Narayanan, founder and CEO of the company. He said the market was very fragmented with no big players and demand was moving online.
To build an ethnic tech-focused cluster in India, led by women, the company acquired brands such as Karagiri, Priyaasi, Ishin and Anubhutee which currently represent a digital cluster of around $45 million. The company expects revenue to reach around $80 million this fiscal year.
Narayanan said, “We are not burning cash and actually delivering profitable EBITDA across the ethnic group as we continue to grow and scale.” He thinks it can grow from $40 million to $200-250 million over the next 4-5 years.
The company earns through its direct-to-consumer (D2C), marketplaces, offline and export websites. He plans to take a few brands online offline, following an omnichannel approach, as he predicts 20-30% year-over-year growth in the offline market. The company also sells its products to the global market through D2C or Amazon websites and expects the Middle East, UK and US to be an important market.
As general market conditions stabilize, the company sees the cost of logistics and transportation decreasing after an upward price trajectory over the past 5-6 months. For most shipping, the cost has finally started to come down.
The company expects better business during the festive season as cotton prices have also seen a price decline.
Currently, the company sources from more than 50 suppliers, mainly from Jaipur and Surat, controls the design process and works closely with sub-contractors to complete the overall manufacturing. Also, it has a warehouse in Jaipur and plans to set up a unit in Surat.
Narayanan believes that D2C brands should be digital or technology-based first to provide a better customer experience. He said better products, customization, fast delivery and good customer experience are the key points that help to cope with changing consumer behavior.
Currently, Mensa is trying to build a technology-focused brand house. With 21 brands, its organic growth rate is 60-70% year over year, outside of what the company buys.
The range of products it offers through its cluster includes sets of sarees, kurtas, party wear and fashion jewelry. Additionally, it plans to partner with Western clothing, footwear and athletics brands.