CXO of the week: Pankaj Vermani, Founder and CEO, Clovia

Clovia- India’s premier D2C lifestyle and personal care brand for the urban millennial woman. Clovia was launched in 2012 and is headquartered in Noida. Clovia, one of the fastest growing Lingerie brands in India. The brand sells a unit every 3 seconds through its online and offline channels. Over the years the brand has won several awards.

Pankaj Vermani is a serial entrepreneur and has co-founded and grown two companies in the past, which went through successful acquisition and got featured in multiple global forums including Red Herring Asia 100 and Deloitte India Fast 50. In his previous role, he was heading the Incubator / Company-Builder Mountain Apollo India, an initiative of Mountain Partners AG Zurich.

Recently we have engaged in an interview with Pankaj Vermani, Founder and CEO, Clovia. He talks about his journey so far and what Clovia has been up to.

Introduction.

I am Pankaj Vermani; a serial entrepreneur. I have co-founded and grown two companies in the past, which went through successful acquisitions and got featured in multiple global forums including Red Herring Asia 100 and Deloitte India Fast 50. In my previous role, I was heading the Incubator / Company-Builder Mountain Apollo India, an initiative of Mountain Partners AG Zurich.

My latest venture is Clovia, one of the fastest growing Lingerie brands in India. The brand sells a unit every 3 seconds through its online and offline channels. Over the years the brand has won several awards.

I also actively advise and mentor start-ups in the internet, mobile, e-com, consumer and ed-tech space. I write regularly for technology blogs on team building, scale, and business strategies. I am also a theater buff and perform in the Professional Theatre Circle. I am a graduate from IIT Delhi, a premier Engineering Institution In India.

What inspired you to become an entrepreneur? Tell us about your journey so far?

 I have always looked towards solving tough problems that impact a large audience, generating jobs in India and making solutions in India which can impact the world at-large.  My wife and Clovia’s co-founder Neha decided to launch Clovia to address the gap in the lingerie market in India, in absence of well-fitted, comfortable yet fashionable underwear in the Indian intimate wear market. With my experience as a serial entrepreneur and having already founded two companies,I decided to take the plunge into Clovia with her.

Lingerie has always been talked about in hushed voices in our country. It has always been a pain for women to shop from neighborhood stores as they were mostly run by men. We all have heard stories about women facing some funny and some embarrassing situations at their neighborhood lingerie store. As a working woman, Neha felt that the evolution of this category in India had not kept pace with the fast-changing outerwear fashion. While traveling abroad, she saw the many solutions and fashion options available to women there. Then she realized that there exists a major gap in intimate wear for Women in India.

Today, Clovia designs and manufactures in India; and sells premium fashion lingerie, innerwear, nightwear, shapewear, swimwear, athleisure products under the brand name Clovia; and personal care products under the brand Skivia from the House of Clovia. Clovia’s products are sold from both 250+ multi-brand and large format stores as well as 45 exclusive stores.

Recently Reliance Retail Ventures acquired 89% stake in the brand.

Today, Clovia's offerings include more than 6,000 product styles (250 new styles a month) in 75+ sizes based on its feedback-led design approach that processes over 1 mn product feedbacks and 140 mn other customer- profile data points to iterate on its fits and design collection; and backed by its proprietary “Clovia Curve Fit Test". The company ships almost 700,000 products a month selling a piece every 3 sec. Clovia has a customer base of 3mn+ customers across online and offline in 2500+ cities across 27000 pincodes. The brand has also partnered with more than 7500 of it's women customers to recommend & sell Clovia products in their social networks helping them gain financial independence. Clovia already has over 25 buddy entrepreneurs working on manufacturing as well as sales. These are like-minded people who with some assistance from Clovia (technical expertise/seed orders etc) have been able to set up and grow their own SMEs. Clovia intends to add another 1000 buddies to this program soon.

The Lingerie industry in India is growing rapidly, what are the usp/competitive advantages of Clovia?

The lingerie marketplace has gained momentum because of two things: an increase in working women and an increase in disposable income. Clovia is a full stack lingerie brand, which controls every part of its supply chain from mind-to- wardrobe. We procure raw material, design in-house, manufacture in third-party facilities working exclusively for us, ensure our own 4 level quality controls and sell through a host of direct sale channels. Every product we create is first made in small quantities, monitored via a state-of-the-art backend technology, which predicts future sales (based on sales patterns and customer feedback) and recommends what further quantities should be produced.

This leads to a true fast fashion brand that is low on cost (as the middlemen are cut out), high on consumer appeal (thanks to our 100+yrs of combined design experience in-house) and super efficient on inventory (we have the best inventory-to-sales ratio in the industry), leading to better margins and cash flows even in a high number of SKUs/Sizes business. So in short, the brand positioning as an affordable-premium fashion-solution and the supply chain backed by superior mind-to-wardrobe and technology backend gives Clovia an unparalleled edge.

What, as per you, are the five important things that Clovia should be looking at today?

• Pandemic did impact the lives of millions and post pandemic, Clovia has observed a great amount of traction with the need for personal comfort seeing a surge. We as a brand would like to reach the length and breath of the country.
• Post pandemic there has been a change in the habits of customers where they are looking for customised solutions, thereby offering Clovia an opportunity to help its millennial women customers to buy customised products and not generic ones.
• Coming down to innovation, Clovia caters to more and more different body types and provides solutions to them by providing the right bra size according to their body type and cup size.
• Sustenance plays a huge role in the apparel business by focusing on reducing carbon/ plastic footprint.
• And lastly, quality is something which every brand should focus on. As a brand we are scaling more in different cities and our focus today is to give more importance to the quality of our products that we are delivering to our customers.

How has technology enabled you to scale up your venture? The major challenges you have dealt with, so far?

We are based on an amalgamation of fashion and technology. We have built a proprietary technology engine known as ReX (or ReqS, i.e. Short for Requirement Simulator). We have patent-pending algorithms that help us gauge the customer purchase pattern through our sales channels and track their feedback fast. It helps us know which product, design, color are being purchased more and also more importantly, which products have high satisfaction score. This helps us provide better products and also plan our inventory accordingly. We also use smart technology and big data analytics for smart management of our inventory ensuring we have the industry best inventory holding, one of the most critical parameters for scaling an apparel business.

In the lingerie industry, standard production runs are of few thousand units and therefore a brand could not offer more than 100 styles in a year. We had to launch 100+ styles every month while keeping a tight control on inventory. We had to, therefore, convince our production partners to work on this seemingly crazy production plans. However, we could show them on how by using technology, we could come up with optimum production plans. Clovia also came up with a breakthrough technology and has created a tool called the “Fit Test” to solve this fundamental problem. We did extensive research and developed this test that asks a woman 5 questions about her body type and then recommends the right bra. We have a very high customer satisfaction score here.

Coming down to challenges, our biggest challenge since the day we started was that with bras, customers didn’t understand sizing especially the cup sizes. They were, used to a salesperson appraising them visually and suggesting a size or just simply buying by band sizes regardless of cup size. We had to educate women about how to size themselves, sister cup sizes and their body shapes. We used our proprietary algorithm based on ‘Clovia’s Fit Test’. We did extensive research and developed a test that asks a woman 5 questions about her body type and then recommends the right bra. We have a very high customer satisfaction score here.

Now Clovia offers over 6,000 product styles (250 new styles per month) in 75+ sizes based on its feedback-based design approach that integrates over 1 million product feedback and 140 million other customer-profile data points to fit your needs. To iterate over processes and designs collections; and backed by its proprietary "Clovia Curve Fit Test".

Recently, Clovia launched WhatsApp as a service provider for customers to trigger purchases, offers and service updates on WhatsApp. BOT understands customer needs from their messages and identifies sales or service processes. Bot added 200,000 customers in the first 30 days of launch.

Which retail formats are working well for Clovia and why?

All formats are doing well for us be it EBO (Exclusive Brand Outlets), Shop-in-shop or LFS (Large Format Stores).

The brand currently has 45 exclusive brand outlets in the country and has been diversifying its product range along with aggressive offline expansion plans. Clovia plans to open 130 EBOs by the end of this year .Clovia has always been a mass-market brand and most of its repeat customers come from tier-II and tier-III markets. Over 65% of Clovia's customer base comes from non-metro cities.

Also these three formats have different target audiences. EBO has a different target audience which visits shopping malls, or high street are brand conscious. Shop-in-shop audience would still like to buy from small shops, nearby retailers. LFS has a very different format where all other brands presence are there under one umbrella.

What innovations have you introduced into this space?

Clovia being a premier D2C fashion, lingerie and personal care brand has been able to cater to multiple sizes/ fits PAN India. No brand was able to do without exerting its manufacturing or working capital  Clovia was able to educate women about how to size themselves, sister cup sizes and their body shapes. We used our proprietary algorithm based on ‘Clovia’s Fit Test’.

We did extensive research and developed a test that asks a woman 5 questions about her body type and then recommends the right bra. We have a very high customer satisfaction score here. Clovia also came up with a breakthrough technology and has created a tool called the “Fit Test” to solve this fundamental problem.  Clovia’s customer engagement on social platforms has been extremely strong through the years.

Clovia also has an AI chatbot, named a Bra-Bot, which handles a host of issues like helping users to make a purchase, updating order & delivery status or guiding to policies, FAQs or sizing suggestions. This leads to a frictionless purchase experience while ensuring the customer is not blocked by surges in call traffic or site footfalls. The bot can handle varied issues from helping to make a purchase to updating one on their order & delivery status or pointing one to policies, FAQs, or sizing suggestions.

The response to the Bra-Bot has been exceptional so far.  At the product front Clovia has made many innovations such as adding Saree shapewear with drawstring, introducing a range of full figure bras meant to cater sizes up to 42F\ 44E.

What is the most significant difference in the functioning of e-commerce players in an emerging and developed economy?

E-commerce has the potential to play a significant role in enhancing the trade benefits in emerging economies. The reach of the technology and the ways in which it may be utilized in retail will be determined in part by how well the definitions of e-commerce has been defined. A skilled and hardworking staff can help in making the client's understanding better than the brand which plays a key role in emerging economies to take down barriers to purchase- COD, easy return and easy pickup, home trials.  Emerging economies still face a challenge of delivering affordable products at a good price which has developed a high penetration of brands, with the emergence of retail malls. Many emerging platforms are aiming to democratize the apparel industry by bringing fashion designers, retailers, and customers on one platform while providing end-to-end solutions. Manufacturing apparel companies to start-ups and budding designers; all have diversified their products towards the luxury sector.

Where do you see the next opportunity coming from?

As the product-market fit has been a roaring success for Clovia and the feedback and customer response/retention is epic, the focus now is primarily to meet demand and ensure growth on all channels of distribution. Clovia is currently expanding both in the online and offline space with equal vigor. The brand has always been a mass-market brand and most of its repeat customers come from tier-II and tier-III markets. The fun for a brand is to understand the audience and nuances of each channel and ensure a genuine Omni experience for customers and sellers. This is Clovia’s main focus for the next 5-6 quarters.