While countless startups are incorporated in India every year, only a few achieve long-term success. However, the stories of many startups that are very vibrant at the beginning are strengthening the Indian startup eco-system. But many start-ups were unable to overcome the subsequent crises and retreated. It is not uncommon for early-stage enterprises to struggle to find their ideal product market and innovate when necessary.

However, the success of Vedang Patel, Aditya Sharma, Harsh Lal and Rohin Samthani’s D2C brand The Sold Story is down to their passion for pop culture.

The UPI boom was at its peak in 2013, when India’s commerce history started gaining popularity. Recognizing the opportunity, the founders paved the way for enjoyment by incorporating their favorite symbols and characters into designs with like-minded people to maintain a touch of personality.

From that, The Sold Store was born as a lifestyle brand offering a variety of apparel with comic references from pop culture, Marvel and DC Studios.

After 10 years, The Sold Store, based in Mumbai, has come to terms with the ever-growing Indian customer’s love for casual wear.

Today, Sold Store, a growing omnichannel lifestyle brand with 22 retail stores across India and a presence on online marketplaces like Flipkart and Myntra, has been able to thrive. The brand has expanded its offerings to include trendy casual wear, shoes, hats, umbrellas and more.

Most of the revenue, 64%, comes from the website and mobile application, which is generated by the brand identity built among the audience over the years. Cofounder Sharma added: This is followed by offline stores (21%) and marketplaces (15%).

Backed by Elevation Capital and Exponasia Capital, Sold Store’s profits are increasing day by day. Every month, the startup has shipped around 2.5 lakh online orders, served over 70 lakh customers so far and expanded its team size to over 500 members. In FY23, it reported revenue of Rs 235 crore.

From initial failures to future growth.

For a brand created by individuals who weren’t particularly fashion savvy, but enjoyed making pop culture references, The Sold Store’s offerings have been a hit since the beginning.

Patel informed that the platform generated enough revenue early on and was not bootstrapped for five years.

Profits were maintained for six consecutive years until the pandemic hit, and all-round growth led to a solid position.

However, the founders admit to making a few mistakes in between. Like many other startups, they spent a lot of money on rents and discounts, resulting in a loss of Rs 26.72 crore in FY22, compared to a profit of Rs 51.27 lakh a year ago.

But they corrected their mistakes early and bounced back with investor support. Patel claimed a positive EBITDA margin of 2% for FY23. The startup is targeting an EBITDA margin of 15% in FY24.

Sold Story's super move

In the highly competitive fashion industry, visibility plays an important role. A well-understood brand, it often collaborates with influencers and celebrities including actor Sara Ali Khan (who is also an investor) and cricketer Hardik Pandya. Due to such collaborations and other marketing activities, the startup has gained more than 1.4 million followers on Instagram.

“Celebrity endorsements have consistently increased click-through rates on our ads and performance marketing efficiency while improving our app and site. As they contribute to ad recall, increased brand awareness, brand searches and organic traffic, that translates into improved marketing efficiency and revenue,” said Sharma.

Celebrity endorsements require huge expenses. So how do cofounders ensure that these extensive marketing expenses don’t backfire on their business?

“We mainly follow two principles: get profit from first order and maintain customer lifetime value (CLTV) to customer acquisition cost (CAC) ratio of 2.5:1,” added Sharma.

That is, a 3:1 ratio of CLTV to CAC is considered the gold standard. This indicates that a brand has effectively invested in CAC and generated consistent revenue. Sold Store ensures a ratio of at least 2.5:1 by closely monitoring metrics such as search volume and website traffic to measure the impacts of branding activities and decide whether to repeat them.

To stay in touch with the market dynamics, the startup is constantly learning about the market. In 2023, it ran notable campaigns like recreating the theme song of the popular series Brooklyn Nine-Nine, organizing a Ram watch party for the anime show Naruto, and sharing information about the Chandrayaan-3 mission through social media channels. These initiatives helped the startup grow its Gen Z demographic.

Operation of Sold Store with Emisa

Customer is the biggest for any business. And in the context of D2C operations, the average customer retention ratio is 28%. As part of that, ensuring a seamless customer experience goes beyond marketing and branding.

A large aspect of customer experience (CX) takes place in the post-purchase phase. This implies that when the customer places an order, uninterrupted delivery of the product becomes essential for retention and steady growth.

Hence, to improve order delivery time, the lifestyle startup tied up with Emisa, a third party logistics (3PL). Headquartered in Mumbai, Emisa has 25 fulfillment centers in 14 cities across India. It also facilitates the fulfillment of more than 1 lakh orders daily.

The Sold Store has partnered with Emisa to accelerate deliveries in 2023. Earlier operating from a warehouse in Mumbai, the brand now distributes goods across the country using Emisa’s network of regional fulfillment centers. This aims to generate more substantial profits.

Emisa takes care of everything related to inventory and fulfillment for the startup, from keeping the inventory in pristine condition to ensuring the management of speedy order processing.

As a result, the brand was able to reduce order processing time from 24 hours to 12 hours. Faster order processing has led to faster delivery times, improved customer experience and improved scalability across India.

“Emisa’s functionality and efficiency sets it apart from other 3PLs. Whenever we faced a sudden turnaround in orders, the Emisa team was there to help us quickly,” said Sharma.

According to Rao of Emisa.. “We initially helped the sold store establish a strong presence in North India, enhancing its customer experience and reducing logistics costs through local fulfillment”.

He added that Emisa’s relationship with The Sold Store team has grown and the brand has expanded its warehousing sector with its other fulfillment centers.

From Fashion Forward to Fandom: Brands Gear Up for GenZ Shoppers

Sold Store has succeeded in building a large base of loyal customers over the years. The millennial demographic makes up 60% of its customer base. The remaining 40% of the brand is shared by GenZ shoppers.

This is because the brand understands the need to expand beyond superheroes and sitcoms. This category is the most selling.

In an effort to connect with GenZ customers, the brand has a fandom-driven collection featuring sleeping anime characters like Naruto. But it is strategically expanding its segments in 2024 with an emphasis on categories such as sneakers and women’s wear.

The sold store is also looking to grow its physical presence. They aim to set up 40 stores this year.

“We are continuously working to expand customer touch points by expanding our offline presence across different states. “The key challenge we foresee is to establish our identity as a fashion forward casual wear and lifestyle brand,” said Sharma.

The brand’s plan for the next two to three years revolves around offline expansion and portfolio diversification while maintaining online growth, he added.

The sold store’s intense focus on GenZ shoppers aligns with current market trends. According to a Bain & Company report, one-third of online shoppers belong to the Gen Z demographic born in 1997 or later, making this segment a significant force in India’s customer landscape.