Contribution margin (CM), which indicates the total amount of revenue available after variable costs to cover fixed expenses and generate profits for the business, is a measure of future profitability.
According to the company, no e-commerce or social commerce company in India has achieved CM2 positive so quickly. The CM is further broken down into CM1, CM2, and CM3. Woovly was already a positive CM1 company and since its variable costs are quite low, it turned into a net positive CM2.
The founding duo of J Venkat and Neha Suyal attribute their CM to their organic user acquisition strategy driven by the creation of user-generated content. Woovly’s customer acquisition cost is almost negligible thanks to these measures.
CM is the basis of break-even analysis and is a crucial criterion for investors. Additionally, while other e-commerce companies have high fulfillment costs, Woovly claims it has virtually none. In a statement, Venkat said, “There are a lot more corrections happening in the social/e-commerce space than in any other startup space, especially in terms of consumption reduction, retention and growth. ‘execution. This is where our overall strategy pays off.
A lifestyle social commerce platform for Indian millennials, Woovly aims to help the growth of video commerce in India. Much of their revenue comes from micro and nano influencers. The company says that short video content creators have their set of subscribers and when they create branded content, their community watches and produces wishlists. They then watch more similar and related videos and ultimately buy the products by clicking on the tags. Each creator earns money for each transaction from the platform’s video content. The cost is therefore indirect and aligned with Woovly’s revenue.
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