Winning hands down

This week’s start-up idea is to establish a platform for people to buy, sell and discover pre-owned luxury fashion clothing and accessories. The start-up will be “The go-to place for old clothes and accessories”. It will work on the peer-to-peer model where users will be able to buy and sell old clothes and accessories.

Market definition

This resale of clothing online is estimated to be $2 billion per year. Indian households disposed of used goods worth approximately Rs 115,000 crore in 2015, up from Rs 80,000 crore in 2014 and Rs 60,000 crore in 2011, according to a study by Assocham. Another study about previously owned goods by OL across 16 cities revealed that urban households are sitting on goods as diverse as a sofa and cars and worth Rs 56,000 crore that they no longer need.

Competitor analysis

India has seen a lot of players in the sale of used goods like OLX and Quicker, and they have done well. In the used clothes market, there are players like Confidential Couture, Spoyl, Envoged, and Refashion, which are primarily based on the international brands like Rebagg, Poshmark, and Tradesy. Although the players like OLX and Quicker have done well, the resale of luxury clothes is fairly new

Pain point & target audience

Because of the rising income levels, most of the people in the age bracket of 18 to 35 years today purchase expensive clothes from various luxury brands and designers across the globe which are usually worn less than five times. In our view, there would be a high number of sellers of these products in Tier 1 and Tier 2 cities and buyers in Tier 2 and Tier 3 cities.

Value proposition

Due to limited use, most of these items are in excellent condition. Customers would be more than happy to sell these unused items at a discounted price and at the same time there would be many customers who would be keen to purchase high-end clothes and accessories at a substantially lower price.

Business model

The start-up will have to follow a hybrid business model that is a mix of Flipkart and OLX. Users of the website and app should be able to post the used clothes and accessories with photos along with the proposed sale price. Once the order is placed, the start-up should pick up the products from the sellers’ door and deliver to the buyer’s home. The start-up can charge a percentage of the amount of the product and the fee for pick-up and delivery of goods. The logistics should be outsourced to a third part delivery partner so that the start-up does not waste time in non-core activities.

Way to market

The first step would be to prepare a website and an app that would be available on all platforms. The next step would make sure that the site and app are launched in one Tier 1 city and one Tier 2 city together. This would make sure that the startup gets initial traction. The startup should also focus on ensuring the authenticity and genuineness of the products.

Milestones

Post the software is ready, the first bit would be to market the website and the app. It is essential that people know more about the app. The startup will have to advertise outside or near luxury malls and markets where a lot of fashion designers are located. It would also be very helpful if a tie-up could be done with luxury fashion portals advising their customers about this platform where they can sell the used apparels.

Investment needed for prototype

For testing and building the prototype, pitch for raising $50K  from angel investors or incubators ln your city. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology.

Team capability

You would need to have a marketing expert who has worked with a “Re-commerce” player earlier. Additionally, it may be a good idea to have a garment expert in the team, preferably someone who is a fashion designer with expertise in procurement.