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XLRI: RINCIPLES OF MARKETING

CHUMBAK
An Emerging Lifestyle Brand

MEMBERS
Shilpi
Avik Basu
Sabrina
Sarosh
Mamta

AIS NUMBER
RB 16020
RB 16047
RB 16028
RB 16015

CHUMBAK
INTRODUCTION:
The Project studies the emergence of the brand Chumbak and its
marketing strategies.

After travelling for years and collecting souvenirs from different parts of the
world, Vivek Prabhakar and Shubhra Chadda realised that India has very little
to offer its visitors in terms of souvenirs that represents the vibrant country
in its true colours. Thats when the husband and wife duo decided to launch
Chumbak in 2010 and give a slice of India to its visitors by adding a bit of
quirkiness and humour to the Indian souvenir market.
They were a little bored of the usual marble Taj-Mahal replicas and
handicrafts that were becoming the only option and we thought travellers
deserved

options

that

were

hip

and

still

represented

India.

After

understanding the growth and potential of the market, their passion drove
them to sell their own apartment for Rs 40 lakh to use it as a seed
investment to launch their first ever product line which was Fridge magnets
with an auto-rickshaw as their first proto-model . It also inspired them to
name their brand Chumbak, which means magnet in Hindi.
THE JOURNEY:
Chumbak, which had raised $2 million in Series A funding from
venture capital firm Seedfund in 2012, received Series B funding in
May 2014 from private equity firm Matrix Partners, as well as
another round of investment from Seedfund.
A total of 38 categories, with 400-500 products, make Chumbak an
unparalleled venture. The venture operates out of a spacious studio that
houses its office and warehouse.
Prabhakar and Chadda realised affordable, well-designed and crafted
products that could be used as accessories and gift items were in demand.
While a variety of such products were available abroad, in India, buying a
memento was restricted to options such as Pashmina shawls, marble
miniatures of the Taj-Mahal or brass elephants.
CHUMBAK: An Emerging Lifestyle Brand

Between 2010 and 2013, Chumbak sold products online and through
distribution. In July 2013, it set up its first store in Bangalore. Seeing the
idea of having its own stores working, the company set up about 20 through
the next seven months.
PRODUCT CATEGORY:
Name a lifestyle product - bags, phone covers, key chains, wallets, etc - that
are colorful and attractive centered around extraordinarily designed and
crafted products, including apparel and footwear, bags and wallets,
souvenirs, key chains and jewellery. Its range includes phone covers and a
unique whistle charm, a funky bracelet. Some of Chumbaks 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 colors.
PRICING:
With the new products coming aboard, the average price size for Chumbak
goes up from Rs 800 to Rs 1500 on an average.
MARKET COMPETITIONS:
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 Mumbaibased India Circus Retail founded by fashion designer Krsna Mehta. And to
somre extent traditional Retailers like Bombay Store which has had the upper
hand in Brick and Mortar Store. The California-based Incipio Technologies,
which makes high-end mobile accessories, also manufactures India-themed
designs.
STORE FORMAT:
CHUMBAK: An Emerging Lifestyle Brand

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 kioskssmall-format stores up to 200 sq ft in sizethis fiscal year.
The kiosks and stores vary in size from 150 sq ft (when Chumbaks first
outlet opened at Forum Mall in Bangalore) to 250 sq ft in Punes Phoenix
Market City. It also has an 800-1,000 sq ft outlet at New Delhi airports T3
terminal, and will soon be opening a 2,600 sq ft-store in Bangalore.

MARKET STRATEGY:
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 Chumbaks phone and laptop cases are
available. It has also begun talks with various big-box retailers
such as Anthropologies and Pier 1 Imports in the US to include its
India-themed souvenirs in categories like home decor and apparel.
The company now also sells its products in Japan and West Asia.
An important part of the 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 brickand-mortar sales.
Chumbak says it is registering about 300 per cent year-on-year growth.
The hybrid model - online, as well as offline presence - has aided the
company.

CHUMBAK: An Emerging Lifestyle Brand

25% of online revenue comes from Facebook, with a very high degree of
repeat purchases among Page fans, that is, 5 times ROI on total advertising
spent on Facebook.
30%-40% of website traffic comes from Facebook. Chumbak has only
Digital Marketing Budget and spends up to 15- 20 lakhs on Facebook
per year.
According to data from Facebook, Chumbak generates 35% of its online
revenue via Facebook; 38% of its website traffic too is from Facebook Ads.
Majority of the digital marketing budget is spent on FB, while the rest is
spent on advertising on Google using ad words, display and search ads.
Chumbak also does a lot of videos on Instagram owing to the nature of our
products.
Now, it wants to increase the contribution of its online sales to its overall
earnings to at least 30 per cent and is, therefore, focusing on various
technological platforms.
The brand has grown considerably in the past two-three years. They have
been very active on social media. In fact, they were one of the first
brands in India to get a global Facebook case study. Also, they were
one of the three global companies featured as part of Googles
global entrepreneur study.
From a two-member team, Chumbak now has a 70-member staff. Its
stores have 80 additional members.
STRATEGY:
A. ADVERTISING:
ATL: Above the Line
1. YouTube
CHUMBAK: An Emerging Lifestyle Brand

2. Print
3. Point of sales exhibitions and kiosks
4. Social Media
BTL: Below the Line
1. Store Promotions depending on the location
2. Cross Brand Promotions
3. Visual Merchandising for enhancing Customer Experience
4. Customer Loyalty Cards
B. Sales Promotion:
1. Coupons on combination product
2. Devising tools
Requirements

to

launch

promotions

based

on

the

channel

C. Interactive Marketing:
1. Customized products
2. Mobile App
3. Kiosks at airports with interactive banners
CUSTOMER SEGMENT:
Urban Indian, who can access internet and love kitsch product are the basic
segments that the brand caters too. The customer group basically 18-35
years old and are students or young working class with a very competitive
and affordable pricing.
Chumbak started because Chadda felt India needed better souvenirs. But
along the way she discovered that if a tourist wanted a souvenir, a pashmina
shawl would be a novelty as well. It dawned on her that it was not only
tourists that were buyers of Chumbak's products, but young professionals in
their 20s and 30s who wanted to see their' India in a quirky style. So from
souvenir, it went on to sell lifestyle products.
CHUMBAK: An Emerging Lifestyle Brand

CONCLUSION:
The founders plan to strengthen the startups ecommerce division, and more
than quadruple their existing retail presence. They will not only expand the
companys footprint in Bangalore and other Indian cities, but also go to
international markets. They will now cater to the much larger lifestyle
segment with their apparel and home collection. They have revamped their
entire on-line web store keeping in mind the introduction of Apparel as a
Category.
CHALLENGES THEY MIGHT FACE:
With gross margins varying across categories, Chumbak is eyeing annual
revenue of Rs 400 crore in the next three to four years. In a market
like India, selling both in the online and offline space would be the
best option.
The gifting and souvenir sector is going to hot up, and we can expect a lot of
action here in the next couple of years.
It needs to be wary of competition as many more such brands are emerging
daily who provide something new plus they need to capture the untouched
market of small towns and customers who are not on social media as they
have focused their entire marketing via social media.
The challenges of a strong online and offline presence are different in terms
of understanding demand and providing for all channels.
They need to focus not only on new customers but to make create
an impact on the existing customers so that they are loyal to the
brand rather than focusing on gross profitability and forgetting all
about customer lifetime value.

CHUMBAK: An Emerging Lifestyle Brand

A strong technological and inventory management is required for


the brand and Chumabk is rigorously working on that.
They started as brand sells souvenirs with an Indian touch for the travelers
who wanted to take a part of India back with them but they emerged into a
global brand through International partnerships.
There is a need to constantly offer something new in order to keep
their foot firm in the market as new brands are constantly emerging
as good players like Happily Unmarried.
The reality is many brands will continue to use their direct-toconsumer site as a glorified order form for years to come. But the
next round (and arguably the best of the current round) of brand
marketing all-stars understands the key to growth is using their
online presence to attract new customers and that has been best
understood by CHUMBAK.
The fundamental difference between both camps is how a brand
approaches e-commerce. Does online store exist to cater to current
brand advocates its superiority, or should it sell the brand in a way
that acquires new, loyal shoppers?
In most cases, an amalgamation of both is a must that is it should
operate in an omni-channel manner.
REFFERENCE:
http://forbesindia.com/article/work-in-progress/indiainspired-products-garnerloyal following/38547/2

CHUMBAK: An Emerging Lifestyle Brand

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CHUMBAK: An Emerging Lifestyle Brand