Upkar Sagar Sharma started working when he was 17 years old. He didn’t come from a family of entrepreneurs. But as a young lad in Jaipur, he romanticised Dhirubhai Ambani. ‘Business Maharajahs’ and ‘Business Legends’ by Gita Piramal made him envision large factories employing hordes of people. He was sold on the idea of manufacturing.
When he started, it was with odd jobs. But when he landed up at an export house and buying agency in Delhi in the year 2000, the owner saw an entrepreneurial spark in his young employee. Asked for a business idea, Sharma zeroed in on the largely unorganised brand merchandising and corporate gifting space. He found himself as a minority stakeholder in the partnership firm. The business seemed to be making money, but the minority partner wasn’t getting any of it. He had to run his house moonlighting as visiting faculty at colleges and at one point, he recalls, taking up a night job at a call centre. The venture ended with a nasty fallout over finances.
In 2005, he started the same business with a friend. They named it Brand Works. There’s another equally exciting story on how Brand Works became CREA Worldwide, of which Sharma is now Founder and CEO..
It has a ‘good run’ according to Sharma, but admits that they got ‘overambitious’. They had imported inventory worth lakhs of rupees only to realise that the market wasn’t ready for it. His partner couldn’t handle the pressure and was considering closing down and moving out of the country. The company had over Rs 30 lakh in loans and was paying an interest of 3 per cent on it each month. Recounting that phase, Sharma quips, “We were paying the EMI of a Merc but roaming around in auto rickshaws. But I am not cut in that cloth — I could not not repay my debt.”
They came to a gentleman’s agreement. His partner would go to Australia, while Sharma would get two years to turn around the business. If he couldn’t, they would split the liabilities. In 2009, things started falling into place. The business became debt-free. So as per their agreement, Sharma took over the company. It was rechristened CREA Worldwide.
“NO ONE WAS TRYING TO INNOVATE BEYOND
COLOURS, DESIGN AND SILHOUETTES IN THE CATEGORY.
WE FELT THERE IS SCOPE TO INNOVATE
BEYOND THESE VARIABLES.”
- PRAVEEN PREMKUMAR
SHIFTING GEARS
Praveen Premkumar was part of the launch team of Parentune.com in 2012, before which he worked in marketing at XSEED, Virgin Mobile and Loop. The first entrepreneurial venture didn’t go as planned. Around that time, he was also in talks with Sharma, who knew him from his Virgin Mobile days.
Circa 2009, CREA was ‘doing okay’ for a company its size, notes Sharma. It was primarily a corporate gifting company then. By 2011, CREA did close to Rs.6 crore in turnover and by end-2011 he set up shop in Dubai and started trading.
“Praveen started as an entrepreneur but that didn’t take off. I said, maybe you should join me now. I was hitting a wall – not able to grow beyond Rs 7 crore. I desperately need help, I told him,” recalls Sharma.
They arrived at another gentleman’s agreement, with Praveen promised equity in two years when he joined in 2013. He is now MD and COO.
By 2014 -’15, CREA pivoted towards manufacturing. By 2016 -’17, it was decided that the company could only do bags and accessories and be IP-led. Sharma credits the shift to Premkumar’s vision. It was the latter who underlined the direction, saying: “Let’s have at least one patent every year.”
Premkumar notes that by 2013 -’14, CREA, which had been a corporate gifting company, started getting a lot of enquiries for bags and promotional backpacks. IT companies and BPOs needed them for employees, in thousands. CREA would get the orders and get them executed by fabricators. So the quality, timelines and service were not in their hands.
A 10-machine facility was created in-house. The capacity rose to 30 machines, in three separate units housing 10 each. In 2015-’16, they merged these into one unit and scaled it to 60 machines. A conscious call was taken around the time to focus on what CREA would be able to manufacture. The focus now shifted from IT and pharma clients to alcohol and fashion. The first deal in fashion was with Numero Uno, whose giveaway bags were made by CREA. A slew of fashion and alcohol brands sourced their duty-free bags from CREA in that phase, with almost all of it being promotional business, explains Premkumar.
In 2016-’17 came another development that would shape CREA’s future. Mass market backpacks priced at around Rs.650 were launched by Flipkart under its private label Billion and CREA was mandated to make them. Soon, the company was making bags being sold by HRX, Fastrack, Benetton and Future Brands, moving further away from promotional giveaways.
Associations with certain brands necessitated an SA 8000 compliant facility for manufacturing. CREA now boasts two factories with a combined capability of 200 machines and 300 people in Faridabad (above).
“That phase was when we moved from promotional giveaways to retail, including private labels,” explains Premkumar.
CREA had a topline of Rs 16 crore in FY 2019, is on track to close the current financial year at Rs 21 crore. Further growth is envisaged by hedging dependence on the Indian market. Exports account for 5 percent of revenues today. The target is to move this up to 20 per cent in the coming year. There is another shift that is being carefully curated, one that will be driven by innovation.
Upkar Sharma (left) and Praveen Premkumar
THE INNOVATION AGENDA
“Why don’t we create something market shattering?” was Premkumar’s thought that led to the company, which was doing well and ramping up, to set its innovation agenda. Upkar is 43 years old and Premkumar is 37, but the average age of the 9-member operations, design and marketing team that bought into the idea and is driving it, is 35. Two members of the design team are from NIFT and one from UID, Ahmedabad.
“We were fed up of creating the same kind of bags. No one was trying to innovate beyond colours, design and silhouettes in the category. We felt there is scope to innovate beyond these variables,” notes the COO.
VARAHA
That challenge resulted in the creation of Varaha, billed as an indestructible, modular backpack. While its commercial launch is a ‘few months away’, it has won the team laurels including ‘Most Admired Fashion Innovation’ at the Images Fashion Awards in March 2019. CREA has secured the patent for its design.
“Varaha has been made with international markets in mind. It has features like fire resistant lining and materials like high grade nylon. We have invested a lot in R&D and raw materials and that has worked,” reveals Premkumar.
The pricing will hover around US$300 to 350, but a toned down version might be created for the Indian market at a price point of Rs.6,000 to Rs.8,000. It took the team a year to create Varaha. It took them a year and a half to come up with ‘The Earth Bag’.
THE EARTH BAG
Discussions on a bag that would be completely biodegradable started at CREA sometime in the first half of 2018, recalls Premkumar. The journey from sourcing the fibre abroad to spinning the yarn in South India to making the fabric was not just time consuming but also geographically expansive. It has no polyester, rubber, foam, metal or plastic and the thread is also biodegradable, claims CREA’s MD. The stoked design team came up with a closure mechanism to ensure the bag is still secure, without any zips and buckles. In four to six months of disposal, there will be no proof of existence of the bag, claim its makers. It was showcased at Raw Assembly in Australia, a sustainable raw material, circular design and ethical manufacturing sourcing event for the fashion industry. The feedback has encouraged the CREA team greatly.
Now the challenge is to make it commercially available for the world. “We are looking at associations with brands. We have the muscle to make it, not market it,” says Premkumar.
“PEOPLE HAVE ASKED US TO LET GO OF MANUFACTURING
AND BUILD OUR OWN BRAND.
TO PUT MONEY ON GOOGLE AND FACEBOOK,
AND NOT ON MANUFACTURING.
IF EVERYONE IS TRADING,
WHO WILL MANUFACTURE?”
- UPKAR SHARMA
There certainly is a market for the bag and this was further underlined during the team’s 16-city trip to Europe in October 2019. Exports to the Europe market through the trading hub in Dubai was already on. The mandate now is to build on that network and explore collaboration and opportunities with world-ready products. The Earth Bag is ‘serious business, underlines the MD and COO.
“It is 100 percent serious business. The entire world is moving towards sustainability. There is a lot of interest internationally. There is a lot of interest in Europe, more than in the US, even. A lot of sustainable products remain niche because of unviable pricing, and because they are niche they do not have economies of scale. We have not got the commercial pricing yet. But it will be in the commercially viable zone. It will be mid-premium, below premium,” explains Premkumar.
This creation won CREA recognition in the form of a special jury award for innovation in fashion, at the Images Fashion Awards in December 2019.
THE NEXT WAVE
In the last two years, CREA has built on its manufacturing facilities and it is on track to grow over 30 per cent on revenue from last year, according to its top two.
“We have taken giant strides in building a very, very innovative company, while keeping sustainability, circularity and upcycling at the core. The good part is, we are bootstrapped and have never sought funding from outside till now,” notes Sharma.
(Above) Some of the youngsters driving the change at CREA.
There have been offers though, he reveals: “People have asked us to let go of manufacturing and build our own brand. To put money on Google and Facebook, and not on manufacturing. That’s not a romantic vision for me. If everyone is trading, who will manufacture? We have labour at a third of the cost of China. Why can’t we manufacture here for the world?”
With most elements of the value chain in-house, Sharma realises the value that brings. So he admits CREA is in talks with a couple of value chain players from outside India. He also underlines that it is on the lookout for a strategic investor with a longer horizon to pump in US$5 million.
“We are not playing the valuation game. And we are choosy about who we pitch to. We don’t want our business to be a statistic,” he surmises.