As far as elevator pitches for new businesses go, it's tough to beat Luxemi.com in terms of originality or curiosity: The local startup is the Netflix of Indian clothing and accessories.
The online business -- whose supplies are sourced from established and emerging designers in India -- is intended to help out fashion-conscious women who find themselves invited to a wedding or some sort of event that calls for a little ethnic flair in their outfits but have no idea where to turn -- and might not want to fully invest in a tikka, saree, salwar, or lehenga to stay in their wardrobe. After you're done you can ship it back to Luxemi.com, or you can opt to buy pieces if you're smitten.
I gave co-founder Swapna Chandamuri a call to talk about the legwork put into starting her new business, how it's been going so far, and why surveys and focus groups may not always be as helpful as people generally assume.
For those who aren't familiar, can you get folks up to speed on your business?
Swapna Chandamuri: Luxemi.com is a new Chicago startup where customers can buy or borrow the latest in Indian-inspired apparel and accessories. We have two completely different inventories: One in which you can buy any pieces you want forever or if you just find something you want for the weekend you can rent it.
What sort of research did you do before starting the company that made you think it would be successful?
Swapna Chandamuri: My co-founder Swathi [Narra] and I were batting around a couple of business ideas and we kept coming back to this one because we fundamentally lived the problem. So we went to the customers to quantify the problem and what the market opportunity might be like. We conducted numerous market-research surveys and focus groups and we found that the opportunity was as big or bigger than we thought it was.
We have growth in demand due to the population growth of Indian Americans due to Indian-inspired fashions becoming more mainstream in the US, due to customers shopping more online. That's coupled with some pretty bad options and alternatives. The ones that people were using for shopping for Indian-inspired fashion are: 1) They can travel to India, which is really time-consuming, really expensive, and unfeasible in this day and age. 2) You can go to one of the big three markets in the US and shop in a brick and mortar store, but they have exceedingly limited selections, the prices are literally double, and if you don't live in one of those geographies, you're usually out of luck. 3) You rely on gifts from your aunt, your friend, or borrowing from your sister or your cousin, which is not really what the fashionista wants. They want their own point of view.
We found that through our market research, the biggest problem areas for consumers were variety and they were wearing these outfits twice before discarding them. These outfits are not inexpensive. They're $500 or $700 on average. If you look at that at a cost-per-wear, that's really high. They wanted more variety at an accessible price point. We're really trying to get people access and options.
You launched about three months ago, but what sort of work were you doing before that to get things off the ground?
Swapna Chandamuri: We've been building out the business and operations for a year prior to that, since last June when I graduated from Kellogg. We spent a lot of time doing the market research, building the business plan, and being in India building out a solid team there and operations and confirming key assumptions in our business plan. A lot of what goes into business plans can be very theoretical and we just needed to see if the reality on the other side of the world held up. We spent four or five months there.
How have the last three months been going?
Swapna Chandamuri: Great. I think that we've seen strong growth in membership and transactions and I think that some of our key assumptions have been absolutely confirmed. We've gotten incredible customer feedback. But we've allowed ourselves to be surprised. We've been surprised at the demographic growth among the non-Indian consumer. I think they have these Indian events and they certainly don't have anything to wear, they don't know what to buy, and they don't know what's in style. We found that a growing part of our consumer base is really just the accessories for people to add some ethnic flair to their Western wardrobe.
You can do all the research you want but the reality is that what consumers say they want in a survey and what actually translates with respect to purchases is not always the same thing. It's interesting to see how people are actually shopping and understanding that consumer behavior in more depth. It's interesting to see how the survey results are living out in reality. We're trying to adapt but also see how it goes.
Why do you think it is that customers don't actually behave the way they indicate they might on surveys?
Swapna Chandamuri: I think it's a couple of things. I think that consumers say they know what they want but the reality is they don't know what is available to them. In a survey you are limited to giving them a finite amount of questions and answers. You can dig a little deeper in focus groups but I think especially for a startup who doesn't have a lot of resources or time that a big business might, you rely on your limited survey and feedback. I don't think consumers know what's available, possible, or plausible to them, but they're constantly learning. You have to ask the right questions and stay on top of their changing needs. They just don't have the subject-matter expertise that you as a business owner do, and you just want to make sure you're providing them with the information to learn and grow.
I know your business was inspired in part by prepping for wedding season and am guessing that's why you launched over the summer, so I'm a little curious: How do you plan to keep busy or competitive in the off-season?
Swapna Chandamuri: The wedding season in the United States doesn't strictly follow the seasonality of the wedding season in India. So right now we're actually experiencing a second peak in weddings. Beyond that, we are currently in festival season, so we're running our biggest promotion in accordance with that. The weddings are really spread out more across the year, and we're really going to be growing our accessories business. We have less seasonality, but also we're a lot more unique in offerings. If you have a holiday party and you want to dress up your little black dress, we have great Indian-inspired accessories that you can't find anywhere else.