Soumajit Bhowmik and Durga Dash share their journey founding Styched, India's largest online youth fashion brand with zero waste.
In 2017, Soumajit and Durga wanted to build a high-quality customizable apparel brand that didn’t carry any stock. They wanted to create a customer-focused brand where products are created based on customer stories and preferences. So they registered their domain and started selling India-themed t-shirts.
One of Soumajit’s neighbors mentioned that he has a group that travels to Mount Everest every year and that if Styched made some t-shirts that speak about the Himalayas his group would all be interested in buying some. Based on that suggestion, they started to create ‘I love India’ t-shirts. They noticed that when visiting other countries you’re always able to find those types of t-shirts but in India they are hard to find and the quality is inconsistent. The Styched team decided to make their t-shirts a little more interesting by customizing them to different places in India, like Goa and Mumbai, and creating illustrations of something which is very prominent in those areas and then having I love India written below it so that people can take something back with them when they return from their travels. And that's how Styched started.
The fast fashion industry has a lot of issues that contribute to the negative connotation of the fast fashion segment. Many of these issues, Durga, felt could be solved with technology and proper processes. Inventory remains the biggest problem, because you have to carry a massive amount of stock of various different items. Every time a new style is launched, the unsold inventory goes to the landfills and the chemicals that come off of the fabric poisons the land, making it unfit for agriculture. In Noida, there have been instances where the land had caught fire, because of the chemicals that seeped into the ground.
So unsold inventory is a major problem, almost 25% of all inventory produced never gets sold and 15% of the fabric used to make garments are actually extra pieces that are discarded in landfills. In total, 40% of all fabric procured is wasted and ends up in landfills. The Styched team realized that if you are able to solve this problem, you would be able to save 40% of the fabric cost and pass on the benefit to the consumer.
Another major issue is the rate of RTO (Return to Origin) products. These are products that go out of the warehouse, but are never delivered due to multiple issues. Sometimes the customer wouldn’t be available at the time of delivery, the address provided is not serviceable or the customer no longer wants the product because delivery took too long and the reason for the purchase had passed.
Undeliverables in India account for 35% across all major brands and marketplaces. Although it’s not a massive problem, often the items that are returned are in a poor condition, they are damaged, water has seeped in and sometimes the season is over by the time the product is returned to the warehouse. Those products are labeled out-of-season products, because the new season inventory has already launched. This means the warehouse will have to house that inventory for almost a year before it can sell it again increasing warehouse costs.
The Styched team wanted to try and solve most of these problems and pass the cost benefit to the customer. They wanted to have zero wastage, zero inventory and zero warehousing, enabling them to pass all the cost benefits to the customers to become the most affordable high-quality brand.
If they could have zero inventory, then technically they wouldn’t have any product in stock and would not be restricted by season. They wouldn’t have to create and stock up designs, instead they could upload designs everyday. They would be able to take feedback from customers as to what they're looking for and upload designs daily. That was their thought process - they decided to pause the Styched website and started working on a scheme around production and demand. How could they create a production demand scheme, which is not linear?
Shortly after that they received an offer from a company called StalkBuyLove. StalkBuyLove used to sell items that were midway between semi-premium and fast fashion, but they were on demand. When the team visited their office they found that StalkBuyLove had 350 plus tailors on their payroll who were all sitting on two floors. Their back-end was well organized with certain products and categories mapped to certain tailors. So when an order comes, it gets mapped to a master tailor, who would do the cutting and 10 to 15 tailors reporting to him would do the stitching before the orders get shipped.
In 2021, StalkBuyLove shut down partly due to attrition of master tailors and the seasonality of the industry. When a master tailor would leave they would have to fill that position with somebody who's equally qualified for that category, subcategory, or products. When a master tailor left and orders came in for their category, it took StalkBuyLove 30 to 40 days to deliver the orders. They were completely dependent on the artmanship of the tailor.
Every tailor might have a different overview on how the products should be built or constructed and two master tailors can have two different products coming out of the same scheme. Additionally you couldn’t accurately determine demand for all the products.
So there were phases when certain categories would not sell and the tailors who were assigned to those products were actually sitting idle. However, you still had to pay for the maintenance of the machinery, the salary of the tailor, of the master tailors without them actually contributing to the revenue.
So the idea was to create something very disruptive, which does not need to follow a linear model, and which completely eliminates the dependence on a master tailor.
The Styched team started to break down each apparel into equations that would allow them to bundle the pattern blocks together. When the back-end looks at the orders, they would be able to tell them how many orders of pattern 1, pattern 2 and pattern 3 they received. They would then cut pattern 1s, stitching pattern 1, pattern 2 and pattern 3, without knowing what apparel they were stitching. Once they are done, they get to see how it comes together in an apparel.
This enables them to work without a minimum order quantity dependency on the apparel. So they can get one order for a certain SKU or zero orders for another SKU - it doesn't matter because they are not looking at it from an apparel point of view. They are bundling together the variables or the pattern blocks and just looking at the algorithm and stitching the pattern blocks. That's how the algorithm comes to fruition. At Styched, they are not dependent on the artmanship of the tailor so the cutting happens algorithmically. There's no pattern master involved. That enables them to look at the back-end and stitch the pattern blocks together using a single thread machine or a double thread machine.
In 2020, the team realized that they needed to recruit some tailors and at the time tailors were very difficult to find. That’s when they decided to create an app where tailors can register and showcase some of their previous works. Tailors would go through a due diligence process and some training modules to enable them to understand the back end process. Once successfully completed, they could choose how much stitching work they want to do.
The tailors would come to the nearest Styched hub to pick up the pre-cut materials, and take it back to their place where they’d stitch the patterns using their sewing machine. They’d complete the work and return it to the hub within 24 hours, where the Styched team would run a 14-step quality control process and ship approved products.
Now the tailors could start earning as much as they desired - they were no longer dependent on a master tailor for work. They didn't have to go to a factory setup where somebody cut the fabric for them. They could choose whether they wanted to do extra work at some point of time - there's no batch manufacturing. The Styched team noticed that the percentage the tailors were earning from them was more than what they would have earned from a salary, which was the primary indicator that this model was benefiting tailors. That’s when the team decided to scale their tailor network and go all out.
To solve the issues with RTO (return to origin), the team created a panel of reasons or variables that would result in a package being returned to the warehouse. There are other startups working on solving the RTO issue, however their solution is focused on unreliable shoppers. These startups’ believe that RTO primarily happens because some customers are impulsive shoppers who select the cash on delivery option and then later don’t honor the purchase. Styched realized that these shoppers only account for around 18% of RTO. A larger chunk is as a result of the inefficiency of delivery partners.
Packages that leave the warehouse and are returned because the delivery attempts failed are not considered returns. Returns are products that the customer received and decided to return because there was an issue with the product, for example the size was wrong, the quality was bad or the wrong product was dispatched.
Styched was focused on products which are not being delivered at all. So they listed out all the problems, and started to solve them with technology, machine learning and data analysis. For example, they can define whether an address is good by the number of characters in the address. They would say, approximately so many characters are needed for an address in order for it to be labeled a good address. Styched would get orders from remote towns in Arunachal Pradesh, which could be a little tricky but once they sent the package the customer received it. This is because it's a small area and people know each other - they would just ask which delivery partner you are shipping it through and if the customer knew the delivery guy they would go and pick it up themselves.
The Styched team realized that you cannot have a linear model where you rely on the number of characters of an address to determine the quality of address. It's the number of characters versus the pincode which determines the quality of address. That type of data only becomes available the more packages you ship and the data that you collect.So you could say, for this pin code, these many characters are required and you average it out over a certain number of orders. They created the whole backend, the non-delivery report (NDR) management dashboard and used an API to connect with all the delivery partners so that they could have a real time view on the packages. If somebody was placing a fake remark that the order could not be delivered, they would get a notification and they would call the customer and the delivery partner to ensure the package gets delivered.
They started with around 27%+ RTO back in 2019, because then the data was zero and the system was learning more. Now their RTO% has come down to around 4.1%, which is probably the best in India for a brand which has more than 85% cash on delivery orders.
Styched believes that most customers actually want to receive their package and are solving to ensure successful deliveries. The team has had many calls, where the delivery partner says they’ll deliver by six o'clock, then at eight o'clock they get the notification that the package could not be delivered because the customer was not available. However, the customer was at home waiting for the package.
When Bengaluru went into lockdown during the 2020 COVID pandemic, Styched had to pause operations because they didn’t have any inventory. Before the lockdown, Styched received between 200 and 250 orders a day. When the lockdown first lifted in May of 2021, Styched started accepting orders again and received 850 orders on the first day, because there was pent up demand from people who wanted to shop online. The next day they got 900 orders and before they knew it they had almost 5,000 orders in the pipeline.
They kept trying to reach the fabric manufacturers but none of them were working - everybody was in shutdown mode. They were told that the manufacturers would need another two to three weeks to restart the manufacturing process for fabric. Within the first month after the lockdown, Styched had more than 5,000 orders in their backlog. This happened around the same time when Shein was banned from India. Although they couldn’t service their massive backlog, they didn’t receive any backlash from customers, because a couple of influencers shared that Styched was a homegrown replacement for Shein in India.
Customers don’t care whether you’re on-demand or whether you carry inventory; they just want their products within a decent time frame. Styched had to wait almost one and a half months just to get fabric. That’s when they realized they cannot be dependent on only one hub in Bengaluru - they needed multiple hubs across the country. They expanded to three hubs in Delhi, two in Bengaluru and one in Mumbai to access fabric manufacturers across the country. They’d go and create a hub in a catchment area for tailors who could work for them.
Then the second lockdown happened, which was a national lockdown across India and they were back to square one. All the hubs were shut down so they couldn’t service orders during this period. They decided to take it a step further, and expand outside India. They wanted to expand to multiple geographic locations in order to grow the business and make operations more resilient.
After the covid lockdown, Styched launched in the UAE which allowed them to grow their orders by almost 25%. They’d identified Southeast Asia as their next most attractive market and plan to launch in Indonesia in 2024.
The Styched team wants to create the #1 umbrella of sustainable fast-fashion brands globally catering to the mid and bottom segments of the market.
If you look at the pyramid of fashion there's a top level, which is all the Louis Vuitton’s of the world. Then there's a mid-segment, followed by a semi-premium segment and then there's the bottom of the pyramid. The team considers Styched as the hero brand for the bottom segment. 85% of their orders come from tier 2 to tier 6 cities in India from the low to mid-income group. Their customers are primarily in the 18 to 25 age group - college students who can’t spend Rs. 1,800 on fashion, which is the average order value (AOV) on other marketplaces and brands. They can however comfortably shop at Styched, where the average order value is around Rs 550.
In order to expand into the mid-segment, Styched has made acquisitions of Flatheads, a Direct-to-Customer (D2C) online casual sneaker startup, and Zymrat, a performance wear brand. The Flatheads acquisition will allow Styched to expand into the footwear sector. Styched plans to incorporate its production-on-demand technology, enabling the expansion of Flatheads' existing collection. The Zymrat acquisition provides Styched with a homegrown alternative to global giants such as Lululemon and Under Armour in the performance wear category.
https://www.instagram.com/styched.in/
https://www.facebook.com/profile.php?id=61563575340778