The Souled Store to speed up deliveries with offline network amid q-comm boom

The Souled Store has caught the quick-commerce bug. Known for its quirky apparel, the Rs 235 crore lifestyle brand, features pop culture references from Marvel, DC Studios, and popular sitcoms on t-shirts, sneakers, bags and more. The company plans to leverage its network of offline stores to deliver products within 10 to 60 minutes.

The Souled Store has recently inaugurated its 30th store at Palladium Mall in Ahmedabad. Founded by Vedang Patel, Aditya Sharma, Harsh Lal, and Rohin Samtaney in 2013, the brand aims to increase its store count to 40 by December 2024. 

Of the total revenue in FY23, 60% came from its website and app, 25% from offline stores, and 15% from marketplaces such as Flipkart, Amazon, and Myntra. From a 2% positive EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin for FY23, the brand hopes to achieve a 15% EBITDA margin in FY24.

In an interview with afaqs!, co-founder Vedang Patel reveals that the brand intends to use its offline stores as fulfillment centres to speed up deliveries for select SKUs (stock-keeping units) available on its website and app. "This plan will go live in a couple of months," he adds.

In addition to its own quick delivery network, the brand will make its products available on q-comm platforms as well in the next two months.

Fashion and apparel brands are increasingly embracing quick commerce, with Zepto partnering with Decathlon and US Polo Assn. According to a report by ET, other quick commerce platforms like Blinkit and Swiggy Instamart are in discussions for partnerships with brands such as Arvind Fashions, FabIndia, Woodland, and Puma.

Initially focused on casual wear, the brand has since diversified its offerings to include sneakers, caps, and other apparel.

Offering high-quality fan merchandise, which was mostly available in niche markets, was the driving force behind the brand's founding. 

Backed by investors such as Elevation Capital and Xponetia Capital, the brand aims to serve as a platform for fans to express their passion through fashion.

"We anticipated that the rise of digitalisation through platforms like Netflix and other OTT services would lead to a growing fandom for global shows in India over the next five to six years," says Patel.

The brand's licensed merchandise has evolved from children's school bags, stationery, and toys to a more mature target demographic.

The size of the domestic licensing industry is about Rs 4,000 crore, of which 80% is ruled by characters and entertainment segments, according to LIMA (a fashion firm) report.

While the brand started with an idea to offer merchandise products, 60% of its revenue comes from non-licensed products, which include solid shirts and quirky t-shirts.

“Our most popular offerings are solid products, and we pride ourselves on providing high-quality fabric at competitive prices,” says Patel.

Notably, t-shirts account for less than 20% of the brand's revenue.

Membership programme

In India, where platforms like Netflix and Amazon Prime have struggled to establish a successful subscription model, the Mumbai-based brand has found a successful formula with its membership programme. The brand offers an annual membership for Rs 199 or a monthly option for Rs 99.

Patel notes that over 50% of the brand's revenue stems from these membership programmes.

“Members can save significant amounts, typically between Rs 10,000 and Rs 20,000 annually, with just a Rs 200 membership. They also receive exclusive benefits such as early access to new launches, priority shipping, and discounts.”

He added that 80% of customers recoup their membership cost with their first purchase.

International expansion

The Souled Store has launched a dedicated website in the U.S. market. In addition to this, the brand has also ventured into the Middle East.  

"Most Indian apparel brands do not expand abroad due to their replication of Western concepts, which makes it difficult to sell them back overseas. After visiting shopping destinations ranging from New York to the UAE and the UK, I’ve realised there’s nothing like the Souled Store. We have no competition, and that’s why we’re excited to take this unique Indian brand abroad," says Patel.  

Patel asserts that people abroad don't take merchandise businesses seriously—they just slap a poster onto a t-shirt. But The Souled Store aims to create fashion through merchandise and not replicate designs.

The brand also wants to target global customers by driving initial revenue from the Indian customers. It aims to build a success story in the export business by backing unique designs.   

Marketing strategy

The brand has roped in Indian cricketer Hardik Pandya as the brand ambassador, and actor Sara Ali Khan has invested in it. Moreover, the brand enjoys 1.4 million followers on Instagram.

For the brand, social media acts as an engagement channel and brings ROI (return on investment) as well. “Our social media handles are all about building a community. We want to be part of the culture, and in India, I believe we’ve successfully achieved that," he adds. 

On the website, customers can find Hardik Pandya's and Sara Ali Khan's favourite collections. Patel says associating with Pandya was organic; as he used to wear the brand's products in outdoor gatherings before becoming its brand ambassador, which looks more authentic.

The brand plans to schedule its initial public offering (IPO) once it achieves a revenue of Rs 1,000 crore within the next two to three years. “We are at a suitable scale to do the IPO even today; but for now, a year and a half, the focus is to stick and build,” says Patel.