Decoding The Souled Store’s Explosive INR 235 Cr Revenue Leap

While countless startups are incorporated in India every year, only a few achieve lasting success. Nevertheless, the Indian startup ecosystem is filled to the brim with many stories of startups that started with full vigour at the outset but got stuck in down cycles and eventually perished. This is too common for early-stage ventures that struggle to find their product-market fit, pivot or innovate as and when required.  

However, for Vedang Patel, Aditya Sharma, Harsh Lal and Rohin Samtaney, the success of their D2C brand, The Souled Store, has been fuelled by their passion for pop culture. 

The year was 2013, and India’s ecommerce story had just started to make waves. This was also the time when the UPI boom was still on the horizon.

Sensing an opportunity, the founders joined hands to share their passion with like-minded individuals who enjoy adding a touch of personality to their everyday wear by incorporating their favourite mascots and characters into the designs.

As a result, The Souled Store was born — a lifestyle brand that offers quirky apparel with pop culture and comic references from Marvel and DC studios and famous sitcoms. 

A decade later, Mumbai-based The Souled Store has masterfully adapted to Indian users’ ever-evolving taste in casual wear.

The Souled Store has been able to successfully position itself as a thriving omnichannel lifestyle brand that today boasts 22 retail stores across India and has a presence on marketplaces like Flipkart and Myntra. The brand has also expanded its offerings to include trendy casual wear, shoes, caps, umbrellas and more. 

Over the years, it has built and nurtured a brand identity that resonates with its audience. As a result, a majority or 64% of the brand’s revenue comes from its website and mobile app, Sharma told Inc42. This is followed by offline stores (21%) and marketplaces (15%), the cofounder added. 

Backed by the likes of Elevation Capital and Xponetia Capital, The Souled Store’s numbers do paint a promising picture. Every month, the startup ships about 2.5 Lakh online orders, has served 70 Lakh+ customers to date and expanded its team size to 500+ members. In FY23, it clocked a revenue of INR 235 Cr.

With Initial Hiccups Come Great Learnings!

For a brand created by individuals who weren’t particularly fashion-savvy but simply enjoyed making pop culture references, The Souled Store’s offerings have been well-received since its inception. 

In one of his previous interactions, Patel shared with Inc42 that the platform generated enough revenues from the very start and remained bootstrapped for five years.

Interestingly, it maintained profitability for six consecutive years until the pandemic struck and the prevailing growth-at-all-costs mindset took over the ecosystem.

However, the founders acknowledge making a few mistakes along the way. Just like many other startups, they, too, burnt cash on hiring and offering discounts. This resulted in the company incurring a net loss of INR 26.72 Cr in FY22 against a net profit of INR 51.27 Lakh a year ago.

Nevertheless, they rectified their mistakes early on and bounced back with support from investors. Patel claimed a 2% positive EBITDA margin for FY23. The startup is aiming for a 15% EBITDA margin for FY24.

The Souled Store’s Super Move

In the fiercely competitive fashion space, visibility is paramount, and the brand understands this well. Therefore, it often collaborates with influencers and celebrities, including actor Sara Ali Khan (also an investor) and cricketer Hardik Pandya. Due to such collaborations and other marketing activities, the startup has amassed over 1.4 Mn followers on Instagram.

“Celebrity endorsements have consistently improved our click-through rates on ads, as well as our app and site, enhancing performance marketing efficiency. They contribute to increased ad recall, brand awareness, brand searches and organic traffic — translating into improved marketing efficiency and revenue,” Sharma said.

However, celebrity endorsements entail substantial costs. So, how do cofounders ensure that these extensive marketing expenses don’t impact their bottom line? 

“We adhere to two key principles: Achieving profitability from the first order a customer places and maintaining a customer lifetime value (CLTV) to customer acquisition cost (CAC) ratio of more than 2.5:1,” Sharma added.

For context, a CLTV to CAC ratio of 3:1 serves as the gold standard, indicating that a brand has effectively invested in CAC and generated sustainable revenue. The Souled Store ensures a ratio of at least 2.5:1 by closely monitoring metrics like search volume and website traffic to gauge the impact of branding activities and determine whether to repeat them.

To stay connected with market dynamics, the startup consistently conducts market research. In 2023, it executed notable campaigns, such as recreating the theme song for the popular series Brooklyn Nine-Nine, organising a ramen watch party for the anime show Naruto, and sharing information about the Chandrayaan-3 mission through its social media channels. These initiatives helped the startup expand its Gen Z demographic.

The Souled Store Powers Up With Emiza On Its Side

For any business, the customer is king, and in the context of D2C operations, where the customer retention rate averages around 28%, it is crucial to ensure a seamless customer experience beyond effective marketing and branding.

A substantial aspect of customer experience (CX) occurs at the post-purchase stage. This implies that when a customer places an order, seamless delivery of the product becomes imperative for retention and sustained growth.

Hence, to improve order delivery time, the lifestyle startup joined hands with a third-party logistics (3PL) player, Emiza. Mumbai-based Emiza has 25 fulfilment centres in 14 cities across India and facilitates the fulfilment of more than 1 Lakh orders daily.

To speed up deliveries, The Souled Store entered into a strategic partnership with Emiza in 2023. Previously, operating from a single warehouse in Mumbai, the brand now utilises Emiza’s network of regional fulfilment centres to distribute inventory across the country, particularly in the north, aiming to create a more substantial impact.

Ranging from maintaining inventory in pristine condition to ensuring the management of speedy order processing, Emiza takes care of everything related to the inventory and fulfilment for the startup.

As a result, the brand has been able to reduce its order processing time from 24 hours to 12 hours. Faster order processing has translated into quicker delivery times, an enhanced customer experience and improved scalability across India.

“The promptness and agility with which Emiza operates set it apart from other 3PLs. Whenever we faced an unplanned surge in orders, the Emiza team was quick to assist us,” Sharma said.

“We initially helped The Souled Store establish a robust presence in North India, enhancing its customer experience and substantially reducing its logistic costs through regional fulfilment,” Rao of Emiza said. 

He added that Emiza’s relationship with The Souled Store team has grown significantly, with the brand expanding its warehousing footprint by using its other fulfilment centres. 

Fashion Forward, Fandom Later: Brands Gear Up For GenZ Shoppers

Over the years, The Souled Store has been successful in creating a large base of loyal customers. While the millennial demographic constitutes 60% of its customer base, the remaining 40% of brand evangelists comprise GenZ shoppers.

This is because the brand understands the necessity to evolve beyond superheroes and sitcoms — although this category drives the most sales. 

In an effort to resonate with GenZ customers, the brand does have a fandom-driven collection, featuring the likes of anime characters like Naruto, but it is strategically diversifying its focus in 2024, with a keen emphasis on categories such as sneakers and women’s wear. 

The Souled Store is also looking to broaden its physical presence. It aims to establish 40 stores this year.

“We are continuously working on expanding customer touchpoints by extending our offline presence across different states. The primary challenge we foresee is establishing our identity as a fashion-forward casual wear and lifestyle brand,” Sharma said.

He added that the brand’s strategic plan for the next two to three years revolves around offline expansion and portfolio diversification while maintaining the online growth.

The Souled Store’s intensified focus on GenZ shoppers also aligns with current market trends. According to a report by Bain and Co., one-third of online shoppers fall in the Gen Z demographic, born in or after 1997, making this segment a pivotal force in India’s consumer landscape.