Aiming To Touch The $100 Million Mark: Nitin Chhabra

The retail industry, like any other sector, is undergoing a phenomenal change with technological innovations, investments flowing in, and much more. One such company which is looking at revolutionising the retail landscape in India is ace turtle. A tech-native retail company, ace turtle aims to spearhead the retail industry’s next phase of transformation.

In an exclusive interview with BW Marketing World, Nitin Chhabra, CEO, ace turtle discusses the journey and evolution of the company, its aim to reach the $100 million mark in revenue, the advertising and marketing strategy for the various brands under its umbrella, the rising implementation of technological innovations, and more. 

Edited excerpts:

Please take us through the evolution of ace turtle since its inception, and its transformation journey when it successfully became the exclusive licensee for brands such as Lee, Wrangler, Toys"R"Us, Babies"R"Us and Dockers.

I started ace turtle along with my co-founder Berry Singh in 2014. Our vision was to transform the sector using technology, and initially, ace turtle started off as a software as a service (SaaS) enterprise. We were offering our platforms, Omnichannel commerce platform to almost all large brands in India, the Middle East, and Southeast Asia. But through the years, what we realised was that, as a SaaS enterprise, we were restricting the range of our operations – only offering a technology platform – but we wanted to be a retail company. During the pandemic, we decided to pivot our entire business model. We already had the technology, and we approached Lee and Wrangler, the two iconic denim brands who were our SaaS clients. We became the exclusive licensee of Lee and Wrangler in India, taking over all operations end-to-end from design, and manufacture, to distribution, and marketing all the way to consumers. Adoption of the brands was the main challenge as these are legacy brands with a history of over a hundred years. 

We were able to successfully scale the business for Lee and Wrangler in India. We were able to register growth of more than 100 per cent year-on-year for both the denim brands in FY2023. We launched Lee and Wrangler in 2021 and Toys”R”Us was launched earlier this year. We are also the exclusive licensee of Dockers in India and select South Asian markets. We will launch Dockers in the first half of next year. 

How is ace turtle changing the way the retail industry is being perceived? Please shed light on how you wish to achieve your target of doubling your revenue this year to $100 million as compared to last year's revenue of $50 million.

Technology has always been our secret sauce. We see ourselves as a technology-native retail company leading the retail industry’s next phase of evolution. We have a technology-native approach to solve challenges facing the retail industry. We leverage technology to ensure efficiency, and boost productivity. For us, the whole business model is about driving adoption for all our brands. We are focused on getting the consumer data and use it for design, manufacturing, marketing, and engaging with the consumers. It is very important that consumer data comes back to us and the conventional wholesale model didn't really work. Because of the wholesale model, what happens is that you are never interacting directly with the consumer, you are always selling to these middlemen who are going to buy from you and then what is the use of all that consumer data? And if you manage to get it when this person who's supposed to buy from you for that would not buy what the customer wants. So we saw that as friction. We decided to first remove all wholesalers and distributors. We went to department stores and we spoke to them about the customer data. The ones who agreed we continued with them. We evaluated the store in terms of location, sales etc and retained only a fraction of them.

So now, the model was either direct to consumer or direct to retail. That's how the model was, because even in retail, or even direct to retail, where you were doing the model, we were not supplying, we were not allowing those retailers to buy from us. So we would decide based on the data, what assortment the customer wants, and we would push that assortment to the stores. So that's how the model works. Today, our business model allows us to get real-time consumer data and feed that into the supply chain. Based on that, either the same products or similar products are then brought to the market. This is what we do for about close to 75 per cent of the merchandise. 25 per cent of the merchandise is decided by the designers, where they put in, what they think should be the fashion trends keeping the consumer preferences in mind. 

We are looking to open more brick-and-mortar stores across the country. What we have learnt in the past few years is that our ‘Vertical Commerce’ model is working. In addition to the inherent resilience of our operational model, the brands that we are taking on are very strong in themselves. Scaling the business for Lee and Wrangler brands holds the key to increasing our overall revenue. To that end, we are looking to open more flagship stores for the two denim brands in the metros – these outlets, replete with the latest technological innovations, will offer consumers a unique shopping experience. We are looking at locating our stores in high-streets and shopping malls to drive sales. Even in the smaller cities, we will be opening many more outlets. We are focused on sustaining 100% year-on-year growth. We have already launched Toys”R”Us store in Hyderabad and the webstore is gaining good traction. We will scale that up this year.

In the last two years, Lee and Wrangler have grown significantly. Webstore sales for Lee and Wrangler grew by 70 per cent in April 2023 over April 2022. Over 40 per cent share comes from online channels after ace turtle took over the licensing. How did you achieve this? What kind of a plan did you follow? Also, within one year of partnering with ace turtle, Lee and Wrangler's online revenue share increased 5X. The EBITDA margin was increased from the negative double digits to the positive single digits. How is the online business for Lee and Wrangler taking shape, and what tactics helped you in this?

In the last financial year ending in March 2023, we achieved the highest ever annual sales for both Lee and Wrangler in India. These brands have been in India for more than 25 years. We took over the business of these two iconic brands in 2021. Today, I am happy to share that 50 per cent of our business is offline and the rest 50 per cent is online. We grew both the brands 100 per cent over the previous year and aim to grow by another 100 per cent in the current fiscal as well. 

The impressive jump in sales for Lee and Wrangler was largely because of the capabilities of our proprietary tech platform, Rubicon. We have been able to optimise the benefits of our ‘asset-light’ approach to inventory management because Rubicon has allowed us to seamlessly integrate our online and offline channels.  The entire merchandise, including the inventory with the distributors, for both the brands is available online. By running algorithms for various processes, from allotting a specific order to a particular outlet to assigning the last-mile delivery partner, Rubicon ensured that the SLAs was met. 

Thanks to our vertical commerce model, we had access to consumer data, which we were able to use to understand consumer behaviour better on both online and offline channels. The data we had compiled enabled us to customise each consumer’s experience. The biggest advantage of our model was the rapid pace at which we could scale the business for the brands. Although both our inventory and catalogue were distributed across stores, and channels, we ensured that consumers had a single view of our inventory. This meant that, if a consumer placed an order on the webstore, and if the inventory allocated to the online channel ran out, Rubicon would assign the product from the stock of the nearest brick-and-mortar outlet.

What are the latest developments and business progress about Toys"R"Us, Babies"R"Us and Dockers?

We opened the first Toys”R”Us store in India in Hyderabad earlier this year. In addition to the outlet in Hyderabad, consumers can also order their favourite toys on the brand’s webstore (www.toysrus.in). We have seen a good response from customers so far. In this fiscal, we will open 12 omnichannel-enabled stores of Toys”R”Us across India. For Dockers, we are the exclusive licensee in India. We are working to launch Dockers in India in the first half of 2024. 

What kind of an advertising and marketing strategy have you planned for each of the brands under ace turtle – Lee, Wrangler, Toys"R"Us, Babies"R"Us and Dockers?  What kind of a media mix have you put in place for each of these brands, based on the different target groups – digital, television etc.?

The advertising and marketing landscape in India post-covid has changed. The consumption of media is no longer dependent on print, TV and OOH. Our consumers are predominantly millennials and Gen Z. The primary source of information for them is smartphones. Our strategy therefore has been to stay relevant and engage our consumers via the new age mediums. Across all our licensed brands, we have focused our marketing efforts on digital and performance marketing. New age mediums such as OTT platforms and social media channels help us engage with our target audiences with a strong ROI. Our campaigns are geared towards building awareness and enhancing consideration for the brands among Indian consumers.

Which are the strong markets (geographically) in India for each of the brands under ace turtle – Lee, Wrangler, Toys"R"Us, Babies"R"Us and Dockers? Which new markets do you plan to enter in India? Are you looking at an international expansion? 

The top cities accounting for highest sales online and offline for Lee and Wrangler are Delhi/NCR, Bengaluru, Hyderabad, Patna and Jaipur. The top cities for Toys”R”Us are Bengaluru, Mumbai, Delhi/NCR and Hyderabad. 

What kind of a retail expansion have you planned for each of the brands under ace turtle – Lee, Wrangler, Toys”R”Us, Babies”R”Us and Dockers? (online, offline, marketplaces, EBOs, franchise outlets, in-store etc.)

Earlier this year, the first flagship store for Lee was unveiled in Bengaluru. Going ahead, we will be unveiling more such flagship outlets in the metros. We will have stores in high streets and shopping malls. We have thirty-one stores of Lee across the country operational today. 

We are equally ambitious with our plans for scaling the business for Wrangler. In addition to the existing 53 Wrangler outlets across the country, we are looking to add many more stores this fiscal year. 

For Toys”R”Us, we already have the first store in Hyderabad and will be opening more stores in metros to begin with. We will open twelve omnichannel enabled Toys”R”Us stores in this financial year. 

For Dockers, we are planning to launch in first half of 2023 and will look to scale business for the brand across online and offline channels. 

What do you think about the implementation of technological innovations as part of the retail experience?

We believe technology can help deliver a superior in-store experience to our consumers. We have enabled a host of technological interventions at our flagship stores. Our flagship Lee store on Brigade Road in Bengaluru is a good example. The omnichannel enabled retail store provides consumers with a unified and superior shopping experience across online and offline channels and touchpoints. Consumers will benefit from a unified view of inventory and price parity. Consumers can also order online and pick them up from the store. They can also order products not available at the store using the Endless Aisle application and get them delivered to their preferred address. 

Additionally, the store has several features to elevate the in-store shopping experience for consumers. There are Electronic Shelf Labels for real-time in-store display and offer communication to consumers. Smart Mirrors provide innovative experiences to shoppers by engaging & delighting with personalized recommendations and effortless product discovery. A special Lee Studio has been set up in the store to offer a variety of services such as express alteration, badging, rip & repair, embroidery, and lifetime mending. The store also has 13.3-inch tablet screens to update consumers about the entire gamut of offerings from Lee in real time. 

We have also integrated QR codes in the store’s sale windows and it was a simplified way of integrating technology. When we were designing our sale windows, we wanted to portray our omnichannel focus upfront and have used it in our end-of-season sale VM to enhance customer conversion. It was all about art meeting technology to elevate VM, and through a simple integration of QR codes.

With our Endless Aisle feature, customers can conveniently order products online from the comfort of their homes and pick them up in-store at their own convenience. Additionally, the Endless Aisle feature also allows them to order products that are not available at the store and have them delivered to their preferred address. 

What kind of trends and innovations are expected to disrupt the retail industry in the coming times?

I think technology interventions can significantly enhance agility and customer experience in the retail industry. 

We believe technology is the core driver of progress, and our goal is to lead the retail industry's transformation through tech-driven interventions based on our Retail Nxt philosophy. We recognise the potential of AI tools such as ChatGPT in automating various manual tasks for brands and retailers. Currently, we leverage ChatGPT to generate product descriptions for the seasonal offerings of our global brands, Lee and Wrangler. Additionally, customers can engage with AI-powered chatbots to receive personalised product recommendations based on their body type, fit preferences, and shopping occasion. While technology like ChatGPT enhances the retail customer experience, it cannot fully replace human interaction. Hence, we focus on creating a seamless user experience and providing a smooth transition to human agents when required. Integrating ChatGPT with inventory management systems, like Rubicon, streamlines supply chain operations. It allows for real-time inventory updates, stock replenishment orders, and product availability monitoring, all of which enhance the overall customer experience.

By embracing the power of AI and other emerging technologies, retailers can elevate customer engagement, improve efficiency, and stay ahead in the ever-changing retail landscape.

Your vision and way forward for ace turtle.

We will continue to add more international brands to our portfolio. At the same time, we will strive to scale the business of our existing brands across India leveraging our proprietary technology platforms and unique tech-driven business model. We are investing in driving adoption for our brands and building innovative technology capabilities to lead the retail industry’s next phase of evolution.