India-inspired products garner loyal following

Four years ago, Shubhra Chadda and her husband Vivek Prabhakar sold their three-bedroom apartment in Bangalore and raised money to start selling refrigerator magnets, bags, apparel and other bric-a-brac under their new business, Chumbak Design. Their ‘India-inspired’ everyday products—designed with a quirky desi twist—have garnered a loyal following in quick time. 

Chumbak, which had raised $2 million in Series A funding from venture capital firm Seedfund in 2012, recieved Series B funding in May 2014 from private equity firm Matrix Partners, as well as another round of investment from Seedfund. The founders plan to strengthen the startup’s ecommerce division, and more than quadruple their existing retail presence. They will not only expand the company’s footprint in Bangalore and other Indian cities, but also go to international markets.
   
Currently, it has 21 exclusive outlets in 16 Indian cities including Mumbai, Delhi and Chennai, and its products retail at about 60 multi-brand stores. Prabhakar (36) and Chadda (34) plan to set up another 50-60 outlets, including kiosks—small-format stores up to 200 sq ft in size—this fiscal year. The kiosks and stores vary in size from 150 sq ft (when Chumbak’s first outlet opened at Forum Mall in Bangalore) to 250 sq ft in Pune’s Phoenix Market City. It also has an 800-1,000 sq ft outlet at New Delhi airport’s T3 terminal, and will soon be opening a 2,600 sq ft-store in Bangalore.

“The success so far has given us the confidence to expand,” says Prabhakar, Chumbak’s co-founder and CEO. He says the company has grown 300 percent in 2013-14, and expects sales to rise as much in the current fiscal too. Though Prabhakar declines to share numbers, an industry expert reckons that Chumbak clocked in revenues of close to Rs 50 crore in 2013-14. The company has set itself a sales target of Rs 400 crore in the next three years.

“The startup is representative of an emerging new India, one that is neither afraid to take on the world nor make fun of itself,” says Bharati Jacob, co-founder and partner at Seedfund. And its promoters and investors believe that Chumbak’s products will be equally popular across the world.

The company already sells in about a 100 stores in kitsch-loving Japan through a partnership with Japanese handicrafts distributor Amina Collection. It also exports to the US, the UK, Australia and the Middle East, including the Virgin Megastore in Dubai, where Chumbak’s phone and laptop cases are available. It has also begun talks with various “big-box retailers” such as Anthropologie and Pier 1 Imports in the US to include its India-themed souvenirs in categories like home decor and apparel.

Some of Chumbak’s most popular items include an iPhone case with a motif of the ubiquitous Indian autorickshaw, and coffee mugs imprinted with daaru (liquor) bottles of all shapes, sizes and colours.

Chumbak’s unique designs have found favour with PE investors and VC funds. “It’s rare to find entrepreneurs who bring together both business-savviness and design expertise, which is needed in spades,” says Rishi Navani, co-founder and managing director of Matrix Partners. Both Chumbak and Matrix declined to quantify the funding, but Navani says, “typically, for companies at the stage in which Chumbak is in, we invest $5-10 million”.

Prabhakar says the money will help them execute their plan “for the next 36 months”. An important part of his strategy is to build a strong technology backend and find ways to double the online share of revenue, which currently stands at 12-15 percent, while the rest comes from brick-and-mortar sales. That is going to change: A chief technology officer is in the process of being hired, and the IT backend is getting consolidated; a “brand new website” is also in the works.

Through this expansion process, Prabhakar and Chadda will continue to focus on the design of their products, which is the backbone of Chumbak’s success. “I didn’t study design, and it’s one of my big regrets. It’s something I keep telling my mother,” says co-founder Chadda who heads product and design at the company. In the past, she has worked in communications and PR at NetApp (a data storage and cloud computing company) and Nortel (a telecommunications firm). “Now, I sit with the designers [at Chumbak] mostly in awe of what they do, but I’ve developed a strong sense of what will work and what won’t,” she says.

Prabhakar, a Kannadiga, and Chadda—born to a Punjabi father and a Jain mother—are both children of defence officers and met nearly 15 years ago at Bangalore’s Jal Vayu Vihar colony. (They got married a decade ago.) It was Chadda who, inspired by their travels abroad, started Chumbak in March 2010. A year down the line, Prabhakar quit his job as general manager (marketing) of Sun Microsystems to join the company full-time.

“If you go abroad, there are stores that you can walk into and spend hours browsing aimlessly. I wanted to add a bit of zing to people’s everyday objects, you know, you pick this up and you feel good about yourself,” says Chadda. (The birth of the couple’s daughter in 2007 had propelled her to crystallise her plans for Chumbak instead of getting back to corporate life.)

Chumbak, however, is not the only company to sell Indian chic within the country or abroad. Its competitors include Delhi-based Mooch Nahi Toh Kuch Nahi, which makes moustache-themed knick-knacks, and Mumbai-based India Circus Retail founded by fashion designer Krsna Mehta. The California-based Incipio Technologies, which makes high-end mobile accessories also manufactures India-themed designs.

But Chumbak holds its own, and is particularly popular with college students and working young adults, the promoters tell us. “We hear from our customers that if you’re young and you don’t know about Chumbak, it’s uncool,” says Prabhakar, but he is mindful of the need to stay ahead of competition.

To keep things fresh, Chumbak introduces designs and product categories “all the time” and, typically, there is a new product that hits stores every month.

Price play is also an important factor in its success. “You can get a basic black laptop sleeve for Rs 400 online or a high-end version for Rs 2,500. Our play is at the Rs 999 level, which means we aren’t too expensive but we certainly aren’t cheap because we ensure high quality,” adds Prabhakar.

An outsourced quality assurance team ensures that Chumbak’s specifications are constantly met onsite. The company’s manufacturing and production line is skewed towards China, where over a dozen suppliers—including companies that work with big brands such as Disney and Nike—make 60 percent of the products. The rest is made in India.

Chumbak has already performed well enough to be a part of a three-company case study by Google for its ‘The Web Is What You Make Of It’ campaign. Though the company doesn’t advertise, it uses social networking sites like Facebook to reach out to existing and potential customers. And it has the approval of more than half-a-million fans on Facebook.

Most importantly, Chadda and Prabhakar enjoy what they do, and can’t wait to get their expansion plans rolling. The Bangalore apartment that was sold to help start Chumbak turned out to be an investment in realising another colourful dream. Says Prabhakar, “We bought another house.”