CredAble was set up with a vision of addressing the huge working capital deficit amongst business owners. It has helped numerous businesses over the past 3 years using its expertise in supply chain finance. Given that our platform is sector agnostic and caters to working capital requirements of pretty much any business that needs it, it is only natural to wonder ‘How would CredAble help my business?’
While the underlying principle is still the same, CredAble promises to unlock value throughout the supply chain by providing timely working capital financing, differently depending on the sector. In this article, we asked three of our customers, all of whom operate in the textiles industry, about their business journey and how CredAble has helped them.
All three of the following companies operate in the same industry, but differ from each other in terms of size, region of operation as well as types of business. If you are a vendor in the textiles industry or are thinking of becoming one, learn from our clients about the challenges involved and how CredAble helped them in solving their supply chain financing needs.
Shakti Trendz Pvt Ltd – Working Capital Financing
Shakti Trendz began as a sole proprietorship in the year 2010 when one of its co-founders, Mr. Puneet Bajaj sought to make it on his own after a 3 year stint in the textile industry. Headquartered in Bengaluru, Shakti Brands is over 100 employees strong. The team is divided according to the brands that they cater to. Today, they handle order volumes worth a few crores on a monthly basis and serve prominent clients such as Myntra and Ajio.
When asked about why the founding team came together to set up a garments company, Subhashish, who has been with the company since the beginning says ‘Clothing is a basic need and most families have at least one member who will need to purchase one or two items of clothing every month. If you are able to sell high quality, stylish clothes to them at affordable prices, the demand will never cease.’
He also stresses that as a company they were able to ride the e-commerce wave fairly early. By way of the internet, it’s possible to have a pan-India presence without having to invest significantly in physical showroom space in different regions of the country. Shakti Brands (as it is known today) caters to customers across the country and has high hopes for their online distribution model to scale further.
But how exactly has CredAble helped them? Subhashish is quick to say:
“Prior to our introduction to CredAble, we were never really doing any working capital financing using Bill Discounting. This throttled out growth and we hit a ceiling beyond which we couldn’t scale. After having availed CredAble’s services a few times, we’ve noticed that our payment process is super-smooth and suppliers trust us far more than they did before due to timely payments.”
With CredAble, Shakti Brands has been able to solve one of the toughest challenges in the garment business: working capital. As of the time of writing this article, Shakti Brands has successfully launched a new service – ‘Easy Garmenting’. They are leveraging the liquidity provided by CredAble and expect to expand their operations and achieve further growth.
Panchanan International – Better Cash flow
Panchanan International Pvt. Ltd. is a family business that began life as a tiny retail shop of ready made garments in 1998. It was located in the busy shopping district of Kamla Nagar, Delhi. Today, the core business of the company is split into four different factions. The offline distribution channels are segmented by regions: Delhi / Gurgaon, Uttar Pradesh and Uttarakhand. The fourth faction is the pan India online distribution channel.
We spoke to Apoorva Goel, who heads the marketing function. She narrated how Panchanan International came to be one of the largest distributors of ready made garments in India.
Apoorva recalls that the company’s first big break came in 2001, when they took up distribution after 3 years in the market as a retailer. She says:
“When we took up distribution in 2001, little did we know how quickly we would progress. We could instantly initiate partnerships with big clothing brands. By 2005, we had expanded into offline distribution in the adjoining regions of Uttar Pradesh and Uttarakhand as well. The next phase of growth came in 2015, when we launched an online distribution model.”
Apoorva notes that CredAble helped Panchanan with two key challenges that have improved their ability to grow as a business. CredAble has helped them to overcome the working capital finance requirements. Also, they could achieve longer payment cycles to manage cash flow. She goes on to add:
“When the competition intensified, credit periods became longer and severely compromised our liquidity. Ever since we began working with CredAble, we’ve had better liquidity that we could deploy whenever we were required to. It also helped in structuring expectations during negotiations with porters, retailers and brands, all of whom are crucial to our business.”
Apoorva says that as a company, they are very bullish on e-commerce. They’ve seen a consistent pace of growth year-on-year in the vertical, over the past 5 years. When asked about what she has learned from working in the industry, she says:
“The best and the worst thing is the scale that this business requires to succeed. Because of low margins and a massive capital investment, the distribution business is high risk. It is viable only when it reaches a certain scale. Anyone who seeks to enter distribution must first analyze the business not only in terms of sales / gross sales, but also in terms of frequency of disputes, return orders and other such matters that could hamper operations.”
Thanks to CredAble, Apoorva and her team at Panchanan can now focus on building the business to a larger scale and not worry about the lack of working capital and a regular cash flow.
AV Apparels – Supply Chain Finance
AV Apparels is the youngest company in this list, having been around only for 5 years. Established in 2015, the company started directly with e-commerce and focuses exclusively on kids’ wear. Founded by people from very different backgrounds, we spoke to one of the founders – Akash. He spoke about how they had started AV Apparels. He also shared his experience of the past 5 years.
Akash is very upfront about revealing that he has no experience in this domain. He almost entirely relied on the expertise of his partner, who had managed the export accounts for a manufacturing company. As for Akash, he was primarily a fitness/dance instructor and was entirely new to the world of children’s garments. When asked about what incentivized them to begin AV Apparels, he says:
“The need for clothing is universal. Globally, the maxim: Roti, Kapda, Makaan (Bread, clothes, shelter) holds true. As for India, even if adults aren’t particularly interested in buying clothes frequently, they spare no expenses when it comes to their kids. This predisposition for spending on kids’ wear, coupled with India’s young population presents a perfect opportunity for companies like ours.”
Akash also remarks on how difficult it was initially. “From 2015 to 2017, it was just the two of us. We intended to start small, but very quickly realized that the demand was huge and that we’d need a bigger team.” With increased demand in the supply chain, came increased working capital finance requirements, which eventually began to throttle growth. As Akash puts it:
“For any business, lack of capital remains a perennial problem. A lack of capital meant that we couldn’t take up more orders even if we wanted to.”
Thankfully, for them, CredAble was able to ease cash flow and put their working capital worries to rest. They could now take more orders and could grow further. They have come to trust CredAble after availing the services repeatedly. CredAble has helped them have a secure credit system. For Akash, CredAble helped majorly with procuring working capital.
As he puts it: “CredAble has been instrumental in helping us meet our working capital requirements. I for one, would definitely recommend all vendors in the textile space who are facing working capital problems to give CredAble a shot.”