Gurugram-based start-up LaYuva is aiming to achieve a twenty-fold increase in its revenue this financial year, riding on its affiliate marketing model. In a chat with Anuradha Shukla, co-founder Rahul Bahukhandi discusses the effectiveness of the strategy, performance targets and what they expect from the Union Budget. Excerpts:
What is affiliate marketing? How is this working out for the company?
Affiliate marketing is a sales tactic to reach out to potential customers through customers, influencers, OEMs, advertisement networks and other such channels. It is based on the concept of revenue sharing, where users or partners are rewarded with financial incentives like a commission or cashbacks if people end up buying through their marketing efforts.
LaYuva adopted the affiliate marketing model in January 2019 and, since then, has seen a growth of 5-10 percentage points month-on-month in new user acquisitions. We worked with some key influencers on platforms such as Instagram, YouTube, Bigo Live and Tik Tok to promote our affiliate network through a unique referral code which was shared with each influencer.
While its still in its early days, this effort alone has fetched us over 2,500 new users. We have also promoted our affiliate network through OEM partners which has given us substantial user base in the past quarter.
What is your current turnover, and what are you aiming for going forward?
LaYuva clocked a revenue of $500,000 in the last financial year. We plan to increase it to over $10 million in this financial year.
How many brands are associated with the company currently?
We are directly associated with over 100 brands and through our official supplier, Onion OMALL, we are currently importing over 4,000 international brands across categories, which includes an inventory of more than 3.5 lakh products. We are also in the process of adding new brands to our cosmetics and electronic range of products.
Going forward, how do you plan to achieve you ambitious growth targets?
We aim to focus on, and make, at least 10 fast moving products as our ‘hero products’ which offer us the maximum margins. Through market research, our team is identifying those products which have a huge demand and limited supply in India market. We are on course to achieve our set target of $10 million by the end of this financial year.
Why should an offline brand partner with you when there are many existing online portals?
We are providing a platform to popular brands outside the country to enter the India market, riding on our set up. We have our own warehouse infrastructure, logistics, operations and customer service teams which can be utilised by these offline brands once they partner with us.
While new offline brands partnering with other existing online portals would get limited visibility, by partnering with us they would get prominence in terms of visibility which would help them reach out to a wider audience.
What kind of policy support you expect from the Union Budget for start-ups?
The government needs to provide more clarity to the existing FDI rules with respect to e-commerce and ensure that the interest of both the smaller traders and sellers as well as big e-commerce entities are kept in mind.