Cbazaar plans to raise $5-7 million

Chennai-based Cbazaar, an online retailer of ethnic apparel, is looking to raise venture capital funding of $5-7 million.

“This will be the company's first round of funding and we hope to close it in a month or so,” says Mr Rajesh Nahar, President – Technology, Net Avenue Technologies, which runs Cbazaar. The company which is in discussions with a couple of venture capital firms plans to use the funding for expanding its product range and beefing up marketing and technology.

Cbazaar caters to the domestic market and the Indian diaspora globally. Its range comprises ethnic clothing such as saris, salwar suits, lehengas, sherwanis and kurtis, for men women and children. Its USP is made-to-measure clothing as well.

Initially, Cbazaar started out as ChennaiBazaar.com selling grocery and vegetables for the Chennai market in 1998.

“But the model failed as margins were low; this was also at a time when logistics and mobile telephony had not picked up,” explains Mr Nahar. The company then got into gifting for the Indian diaspora.

“That's when we realised apparel was a high-seller in value terms and there was a demand for ethnic clothing among global Indians.”

Gifting gave way to ethnic clothing for Indians living abroad in 2005. Cbazaar today ships to over 40 countries, including the US, UK, Australia and Canada. This year, it began operations for the Indian market as well.

Ethnic apparel in India is estimated at Rs 31,000 crore – while a chunk of this is offline, the potential for online retail is huge, says Mr Nahar.

E-tailing seems to be a hot hunting ground for investors. Just this week, Flipkart, which sells books, music and gadgets, received a funding of $20 million from Tiger Global.

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