Clovia’s same-store sales double from pre-pandemic times: Founder Neha Kant

Offline sales at direct-to-consumer lingerie retailer Clovia, recently acquired by Reliance Retail, are booming with the lifting of COVID-19 restrictions and a return to normalcy. The company has prepared an aggressive expansion plan for itself in the year ahead as it looks to tap Tier II and Tier III cities through both online and offline channels. Neha Kant, founder and director of Clovia, in a conversation with Moneycontrol on the sidelines of the India D2C Summit 2022 in Mumbai, spoke about the company’s offline strategy and business plans. Edited excerpts:

D2C brands have had a heady run despite the challenges in the last two years. As we emerge out of the COVID-19 crisis, what’s the roadmap ahead for Clovia?

A couple of things happened during the COVID period that were very fruitful for us. One, there was a massive shift of consumers to the Internet as well as Internet-based services and products or experiences. So that suddenly fuelled our growth. While it seemed like the end of the tunnel in March 2020, when the lockdown happened, the tunnel opened up to bright light... earlier we had as customers the adventurous sort, the early adopters.

They were happy experimenting with the product, hence price points and visuals would be the hook. But, now, we are getting more fence-sitters or late adopters, the kind of customers whose decision-taking time is longer and more deliberate. We need to cater to different aspects of the decision-making process. We started to work on a product, service, and the entire brand experience from that perspective because this was a new set of customers for us as well.

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When we reacted to COVID, we created work-from-home, comfortable clothing because that was the flavour of 2020 and continued till 2021. It boosted the category. Active health also was a priority for customers so we got into active-wear as well. A customer has an intimate and trustful relationship with Clovia where she can tell us her most intimate problems and we'll find a solution.

We, therefore, branched out into loungewear and now personal care as well to address problems that are very specific to a girl. So that's how we will continue to solve problems for customers. As of today, we have 3.5 million women who are wearing Clovia. We are selling one item every two seconds. We have to take this from 3.5 million to about 15 million and Clovia is now expanding not just across the category but across geography and channels as well.

Let’s talk about a few trends that emerged during the pandemic. You mentioned a few such as the shift to online channels and also comfortable clothing. Have these trends sustained?

There was a peak for a few things like casual clothing, vitamins, and nutrition-based queries, and even to a certain extent fitness. Now it has settled down. However, it hasn't gone down to the pre-pandemic level. So it is much higher. In fact, it is exponentially higher than what it was pre-pandemic because people have now learned the value of nutrition, fitness, and overweight management.

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People have become aware of these things and therefore they will continue to implement them in their lives. Take for instance loungewear, from wearing old recycled pyjamas and T-shirts to actually investing in a pair or two that you can wear through the day and step out effortlessly to do grocery shopping, picking up kids from school……

How has your strategy for offline sales changed in these years?

We could only use it offline about 70 percent of the year. But, even before the pandemic, offline was smaller. It was 15 percent of our business but it went under 10 percent. Every time the lockdowns open or the wave subsides, the offline bounce-back is really fierce. It's actually fierce because consumers come with very specific agendas and there is no more window-shopping.

Our strength is direct engagement with customers.

- Neha Kant

Are you looking at aggressive expansion now?

Clovia has been expanding aggressively, especially, our own branded outlets. Our strength is actually direct engagement with customers. And it reflects in our offline strategy also. We are opening about five outlets every month now and most of them are in Tier II and III cities. All of them deliver double-digit EBITDA (earnings before interest, tax, depreciation and amortisation) within three months and capex recovery is happening on an average in 12-15 months.

We have changed our thesis of selecting a store now. We have assumed that only 70-75 percent of the time during the year our store is functional. Therefore, all the unit economics need to fit in with this view because staff expenses and rentals stand the same. Right now we are at about 28 stores and we should close the year with about 55-60 more.

So Tier II and beyond is going to be the focus for the company going ahead?

Given our product and product-price proposition, we are not targeting a particular geographically. That's the whole thing about the Internet. It's a democracy, right? When we started, there was more adoption from metro consumers. But today, Tier II and III contribute about 52- 55 percent of our consumer base and this is just from our website Clovia.com. Also, we have observed that in Tier I, there are customers or consumer segments who have Tier II sensibilities. The geographic boundaries are a little blurred.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.