ShopClues looks for a trendy profit route

NEW DELHI: ShopClues is banking big on fashion, a category within which it expects to start making money in the next couple of months, even as the ecommerce firm moves closer towards posting a profit. The US-registered company is also preparing for an initial public offering and is open for a listing in India, one of its founders said.

"Fashion is the first category that will start making money very soon," Radhika Aggarwal, chief business officer, told ET in an interview. "We are on course for achieving profitability for the company as a whole in the first or second quarter of the next financial year."

In the fashion category, competition will be stiff, from leading fashion etailers -Myntra, Jabong, Flipkart and Amazon - and also smaller companies such as Limeroad and Voonik. Recently Jabong, which was acquired by Flipkart-owned Myntra last year, too claimed to be on track to hit profitability by next year.

ShopClues, which is run by Clues Network, recently launched a television campaign for its fashion category, which includes clothing, footwear and accessories. It plans to spend Rs 5-6 crore on the campaign.

Currently, the company ships about 1.2 million orders a month within the fashion category. It claims to have doubled fashion shipments by two-and-a-half times over the past year, since it ramped up investments in this space, particularly in developing technology around product personalisation, discovery and analytics.

ShopClues is working to bring a large number of small brands on the platform. At present, about 200,000 of the half a million merchants on the platform sell fashion products.

Fashion and lifestyle is one of the biggest verticals for ShopClues, accounting for more than half its revenue. According to retail sector experts, this is one of the highest margin segments compared to other fast-selling categories such as electronics.

Aggarwal refused to comment on the revenue the company generates out of the fashion category. "Fashion contributes to over 50% of our gross merchandise value and a much larger portion of our revenues," said Aggarwal, who is planning to host a fashion event in Delhi to showcase the company's portfolio.

ShopClues said while categories like electronics took a serious hit during the demonetisation phase, it is building up segments such as home and kitchen. Other fast-growing categories that it is ramping up on include refurbished and unboxed smartphones.

The company said it is on course to launching an IPO next year. "We will be open to list in India if it is a better market," said Aggarwal.