Sumit Jasoria founded his fast fashion e-commerce company Newme in 2022, a year after India banned Shein as part of a larger move to block Chinese apps in the country. Jasoria had previously launched and operated Daraz, the Alibaba-owned e-commerce platform, in Myanmar and Sri Lanka.
Newme offers trending styles to a predominantly Gen Z customer base, with 500 new design drops a week on its app, according to Jasoria. It’s keen to sell specifically to young people located in India’s Tier 2 and Tier 3 cities. Jasoria said that 70% of the company’s orders come from non-metro cities. He also talked about Newme’s close resemblance to Shein, and how conventional e-commerce and clothing manufacturing wisdom doesn’t always apply to a design-focused company like Newme.
This interview has been edited for clarity and brevity.
Your aim is to build Shein for India. What does that mean in the Indian context?
Shein created a massive design pool, built with minimal inventory risk, at a very affordable price point. Shein launches almost 6,000 designs a day across the world; in contrast, Zara does 2,000 designs a year. Shein is not a fashion company, it’s a technology company which is selling fashion. Our learning from Shein was: How do we build a design-churning machine, with minimal inventory risk?
India is a country of countries. A Gen Z woman in a Tier 1 city — like Delhi, Mumbai, or Bengaluru — has very different needs to a Gen Z woman in Tier 2 and 3 cities, who are looking for trendy yet modest designs. They are looking for a nice graphic T-shirt, with matching denims or cargos. That’s not available on Shein. At Newme, we want to cater to a bigger audience sitting in Indore, Jaipur, Lucknow. Currently, 70% of our orders come from non-Tier 1 cities. Most products listed in Newme cost between $3 and $15. Over the past nine months, we have been able to deliver our products to over 100,000 customers across India.
One learning we had from Shein is that the fast fashion of the world was built in one city: Guangzhou, which has 5,000-plus factories. Shein works with 300 factories there. For this model to scale, factories have to be concentrated in one city, and for us, that city is Mumbai, which houses our seven factories. The fabric for fast fashion comes from Ahmedabad and Surat.
What are some of the counterintuitive lessons from your first year of building Newme?
The typical e-commerce wisdom is that more options will drive more sales. We had a similar hypothesis and were pushing in the same direction, but while interacting with our consumers, we realized Gen Z buyers need enough options, but don’t want to be bombarded with designs. They prefer curation with a healthy mix of designs. If you show them too many options, it confuses them, which leads to them not making a purchase. So, we reduced our styles from 50,000 to 5,000, but increased our curation.
Another conventional e-commerce belief is, the more reviews on a product, the more sales it can drive. But Gen Z don’t want to purchase products that have a very high number of reviews because it signals that many others have purchased the same style, which puts them off. They’re always looking for statement pieces at an affordable price.
Shein’s global success was because of an ingenious supply chain, and data-driven clothing design. What was the biggest challenge you faced in setting up the India supply chain?
The main challenge in India was minimum order quantity [MOQ] — the minimum number of items to be produced for a factory to accept your order. In India, most factories work on very high MOQ. They are looking for minimum 500 pieces per design, whereas we need factories to do 10 or 20 pieces per design. For our business of real-time fashion drops, we need factories which can churn out new trends fast, which is very challenging. We met almost 20-plus factories in Mumbai, and 19 of them said don’t come next time. Some asked: Are you drunk?
Currently, we can do 500 drops a week. As we scale the business, we may be doing daily drops. We are planning to scale to 1,000 drops a week in the next 12 months.
The first factory we signed was based on trust, and we said, if we do not meet your expectation, we will give your money back. Interestingly, this low MOQ is quickly turning out to be our unique selling point, as we are able to pay factories within one month. This helped us get seven factories, who all have a high desire for on-time payment. We have 10 more factories in the pipeline, which we plan to onboard as we scale the demand.
