Most young Indians who head overseas for higher studies, aspire to land a well-paying job with an established company there. Yogesh Kabra, the 30-year old founder of men’s inner wear brand XYXX, though, had a different plan from the word go.
Hailing from Surat, a textile hub in the western Indian state of Gujarat, Kabra knew all along that global shores were only a temporary stopover for him. He nurtured the dream of starting his own venture after finishing his MBA from the Hult International Business School, Massachusetts, in 2015 and headed home the same year.
The next year, Kabra launched XYXX with an investment of Rs50 lakh ($73,000) from his family. He chose the brand name to demonstrate a disruptive business strategy.
“All of us are identified by a pair of chromosomes which is 99% similar. It’s only 1% of chromosome that differentiates people from one another. XYXX is aimed at creating that difference by offering a channel of self-expression through innerwear,” he explains his company’s brand name.
Launched in December 2016, the digital-first brand, which started offline sales only six months ago, struck gold early on. In its first year of operation, it recorded sales of Rs12 crore.
In the coming six months, the firm expects to increase its monthly revenues from Rs2 crore to Rs3 crore. What’s more, in March this year, the young brand received its first round of seed funding of Rs2 crore from Sauce.vc, a venture capital fund focused on investing exclusively in early-stage consumer businesses.
“Our brand is encouraging consumers to upgrade to wider choices and better quality products. Underwear is the first choice of garment of the day. It should not be boring, it better be interesting,” says Kabra.
In a conversation with Quartz, Kabra talks about the business opportunity that lies in the crowded men’s innerwear market, product innovation, and the brand’s expansion plans. Edited excerpts:
What inspired you to get into the men’s underwear market?
Returning to India from the US, as a buyer, I faced a dearth of choices in underwear. In the mass segment, the choices are pretty standard—you get to choose from black, blue, and grey. The segment clearly lacks innovation and finding a good quality product is a struggle. For an average buyer, premium brands are out of reach.
The year 2015 was also the time when e-commerce was growing. Identifying a product gap, I decided to launch a brand in the underwear segment that would offer buyers more choices, and good quality at affordable prices.
My father is a first-generation entrepreneur and into textile trading. I wanted to follow suit and get into a product segment that would allow me to use my knowledge of fabrics.
According to you, XYXX is all about changing the conservative narrative around men’s underwear market. What exactly does this mean?
We want to change the way men have been traditionally thinking about underwear. Typically, the choice has always been associated with what we call boring. Underwear, for long, has been a low-consideration item. We want to contest this and want consumers to experiment more and become aspirational buyers.
What’s been the consumer response to this narrative?
Our buyer is the anti-thesis of what we generally think—only young buyers will be open to trying new things. What’s surprising is that even customers in their 40s are trying cool prints. Someone sitting in Coimbatore and Odisha is buying our product. These are the buyers who want to feel good and young. Most of the time, brands wrongly assume demand for innovation will come from metros.
But as a brand, what’s XYXX’s unique selling point?
For us, it’s very important our product offers consumers fun, functionality, and a smooth customer experience. By fun, I mean to say our products cannot be boring, right from the design to packaging.
Functionality is of utmost importance to us. And that’s the reason why we are using Lenzing MicroModal fabric for making our products. It’s the most premium underwear fabric in the world and is extracted out of the pulp of beech wood tree in Austria. It’s three times softer than cotton fabric and 16% cooler than cotton. Indians sweat a lot, therefore, a softer and cooler fabric makes for perfect material for underwear.
Next, important thing for us is to get the customer experience piece right. Towards this end, the team has worked on ensuring that returns are easy.
What’s the pricing strategy for XYXX and who is your major competitor?
Our product prices start at Rs199 ($2.9) and go up to Rs400 ($5.82). That’s the sweet spot for us to play in. In future, a lot of customers will migrate from lower price points to premium brands. Our current pricing gives us an opportunity to tap into this segment of future buyers.
We are fighting for a share in premium mass segment. In this category, a handful of brands command disproportionate market share. We are up against top brands such as Page (Jockey), Van Heusen, Polo, and Ralph Lauren.
How are you stacked up against these big brands in online sales?
Despite older brands dominating online space too, a young brand like ours is getting significant traction. Online, we enjoy high brand stickiness. About 30-35% of our customers are repeat buyers. Here, we can showcase our products directly to people in the age group of 18-40.
XYXX has debuted in brick and mortar space. The fight here for shelf space as well as consumes’ wallet is tougher. Right?
We began our offline journey six months back. The firm has entered into Gujarat, Maharashtra, and Chhattisgarh. We are retailing through 700 shops in these three states.
Everybody is fighting for shelf space in the offline market, it’s not an easy space to be in. For example, what Xerox is to photocopy industry, Jockey is to underwear market. With incumbent players dominating the market, retailers want to stock what sells the most.
What is the kind of product innovations buyers can expect from XYXX?
To innovate we are closely looking at where our buyers are. Are they in the gym, office, or running a marathon. For instance, for those running a marathon of 2km, 12km or 40km, the product requirements will be different. As a brand, we want to offer tailor-made products to people with unique requirements.
Look at men with waist sizes between 46 and 56 inches. They have no or very limited choices. Clearly, there is a void of appropriate choices which needs to be tapped with the right kind of products.