ChumbakThe Profit Magnet Published On: Wednesday, January 21, 2015 Views 4413
There are two kinds of people in this world; first are the ones who see things in a normal traditional way and the others are the ones who have a unique eye to everything. The latter are often taken as insane but then eventually these are the people who dare to do things differently and change the face of this world.
No, this is not a history class and we are not writing about Albert Einstein, Shakespeare or some historian!
Well we are talking about the makers of Chumbak, which we consider as one of the most innovative ideas we have come across so far!
To begin with, their name actually means ‘Kissing Stones,’ isn’t it cool?
Due to their immense popularity, most of us already know what they do but for the ones who don’t; Chumbak in the simplest terms is a company which designs & crafts products such as apparels, footwear, bags, wallets, souvenirs, key chains, mobile accessories and jewellery. Its range also includes phone covers and a unique ‘whistle charm’, a funky bracelet, and many more but in the most unique’est way possible.
Let’s move on to give you a brief idea of the how’s-&-what’s of the company!
First of all, Chumbak is the invention of the lovely couple turned cofounders Vivek Prabhakar & Shubhra Chadda. Since the time they both were working for separate companies, they wanted to do something of their own but at the same time something which was unique or something that clicked instantly.
That was when they got the idea of Chumbak!
They started working on it and continued their research for roughly a year, to make sure every angle was covered. Their research included similar business models that were running across the world, every possible flaw, worked on feedbacks from family and friends, etc!
Once they were one hundred percent sure and convinced about the idea, they decided to quit their jobs and took the biggest risk of their lives and that risk was of selling their only asset i.e. their house to raise INR 40 Lakhs for their venture. That’s how in September 2009 they launched Chumbak!!!
With most of that money they bought a whole lot of stock but surprisingly didn’t have even a single store on board. For the time being, they stored all that stock in a little apartment. During that phase, a lot of negative thoughts surrounded them. Vivek was so much stressed that he even asked Shubhra that if she was sure if they had done the right thing and what if people didn’t like the products??? After all, they no more had a roof over their head and all that was left was these products!
Shubhra who is always very calmly, consoled him and asked him not to worry and told him that if things didn’t work out then they will sell them to family and friends for the next fifteen years to cover the losses.
And with a positive attitude, they started!
Initially they used Facebook as their primary marketing channel apart from word-of-mouth. Along with that Google Adwords also helped them massively. Because their products were so unique, peppy, fresh & traditionally connected; the word spread like fire and the demand for it grew with every passing hour. Within no time, there was a knock on their door; and who was it??? Success, with open arms!!!
By 2012, the company was sourcing to 150 retail outlets across India and to top that they also made their presence in 70 multi-branded outlets in Japan! Now till 2013; the company only sold products online and through distribution channels, but looking at the huge demand they took another leap and in July started their very first store in Bangalore. Within seven months they also setup another 20 outlets of their own which was spread across in five cities!
They played it very smartly and instead of opting for large fancy properties, they went for cute little 150-200 sq ft kiosks! This obviously helped them a lot in controlling the costs. There was a drastic shift in the numbers now; online sales only accounted for about 15% of the total sales and their major business from the outlets came from metro cities like Mumbai, New Delhi and Bangalore which accounted to about 60%.
The most exciting part was that till date the company was self-funded and Chumbak with its 38 categories and 400-500 products by now had also broke-even. They had now increased to a 70-member team apart from 80 additional members in the stores.
Their uniqueness was so much that Google selected them as one of the three companies from across the world for a case study about how companies have successfully used Google services. They were also one of the first brands in India to be chosen to get a global Facebook case study.
Wondering, what was so unique about their strategy???
It was no rocket science!
To be honest, you won’t believe us if we told you that their strategy was as simple as any other startup; what made them stand out was their volumes of products which ranged from INR 95 to 1,495 along with active and smart utilization of Facebook which was the center of their marketing strategy. All they did was engaged with their customers, responded quickly to queries, held interesting contests and crowdsource ideas for new launches along with giving a peek, using Facebook ads to target sponsored stories about their products to friends of its 100K+ fans on their page, etc.
And to prove that; twenty-five percent of their online revenue came from Facebook which also had a very high repeat value, the business they got from here was 5 times the total amount spent on Facebook for advertising and 30-40 percent of the total traffic on website came through Facebook.
Apart from that, Chumbak also maintained an impressive fan-base on Twitter, YouTube, Pinterest, Tumblr and Instagram which added to their revenues.
Many companies could and should learn from them because they didn’t raise much of funds from external sources to make all this possible. Since their inception, Chumbak had two rounds of funding with the first one being in February 2013 of USD 2 million from SeedFund and the latest one was in May 2014 for an undisclosed amount from Matrix Partners India.
Having said that, although they decline to share the revenues but the company is said to be growing @ 300% YoY (Year-on-Year) with revenues close to INR 50 Crores in FY2013-14.
The fusion-model of online and offline has indeed helped them sustain and grow smoothly and now they plan to increase their online business to at least 30% and thus are getting in multiple technological platforms. Chumbak also aims to cross 400-500 Crore in revenues in the next three years.
Although, the world is moving to internet but looking at the current market situation and comparison it with Chumbak’s business model it seems that it is pretty safe, beneficial and important to have an offline source of revenue for your business on the long run.
Image credit: chumbak.com