Poshmark entity setup in India: Global Peerspectives

In the trendy world of fashion and e-commerce, few platforms have revolutionized the way we buy and sell clothing like Poshmark. Founded in the U.S. in 2011, Poshmark quickly rose to prominence as the largest social marketplace in the country, providing users with a unique blend of resale opportunities and community engagement. It later expanded to Canada, India and Australia, with 80 million registered users worldwide.

We spoke with Mithin Kumar, General Manager of Poshmark India, to delve into Poshmark's global expansion and how Safeguard Global played a pivotal role in helping the company establish an entity and grow its business in India.

At its core, Poshmark is an ingenious blend of social interaction and e-commerce, with a unique twist on reselling fashion and accessories.

"Imagine the personalized feed you see on social media platforms like Instagram or Twitter. Poshmark creates a similar experience," Kumar explains. Users can explore a tailored collection of items based on their interests, and the trends and brands they follow. But it's not just about shopping; it's also about connecting with a community of fellow buyers and sellers who share a passion for style.

"We were trying to bring both of these together so that people are socially interacting before they decide to transact," Kumar says. The founders saw the potential of combining the convenience of mobile technology with the excitement of fashion discovery, paving the way for an immersive buying and selling experience.

Poshmark streamlines the selling process for sellers and gives buyers access to goods they wouldn’t otherwise see. You can list an item in less than a minute, including snapping pictures, adding descriptions, and setting a sale price. Once an item sells, Poshmark handles shipping logistics. The platform's personalized approach extends to luxury items, where a meticulous inspection authenticates each item to ensure both sellers and buyers have a good experience and trust the company.

Kumar’s journey with Poshmark began in the early days of mobile app development. He was an iOS engineer and consultant whose India-based team was hired to build the app prototype and oversee its evolution.

"We built the first generation of the app together. I started off as an engineer developing iOS apps for Poshmark. But eventually, over a period of time, I grew into a management role," he recalls. Today, he has become a key player in Poshmark’s growth, and as General Manager of Poshmark India, he oversees all operations, from finance and budgeting to recruitment and management.

The launch of the iPhone presented Poshmark with the opportunity to revolutionize the buying and selling experience, empowering users to engage, transact and curate gently used clothing effortlessly from a mobile device. This, in turn, created a thriving global community of fashion enthusiasts—so much so that in 2019, Poshmark was ranked the fastest-growing online marketplace in the U.S. by Inc. magazine.

Poshmark's journey from a U.S.-based platform to a global sensation began in 2019 with its expansion into Canada. "We wanted to become a global company, and Canada was a natural choice," Kumar explains, with a ready-made market and growing interest from Canadian users.

This expansion marked a crucial turning point, setting the stage for Poshmark's decision to expand into India in 2021. However, entering new international markets presents unique challenges, particularly when it comes to understanding the local culture.

Growing internationally requires both cultural sensitivity and flexibility. Kumar describes how Poshmark tailored its platform to resonate with users in India, making adjustments to accommodate a preference for cash transactions and localized sizing. These adaptations ensured that Poshmark's platform felt familiar and relevant to Indian users, enhancing the overall customer experience.

In order to develop a product that would resonate with users, they first had to come together as a global company. "We had to figure out a way to work as one team. We had to make sure that everybody was culturally aligned and everybody was invested in this business. Luckily we already had a great partnership with the team in the U.S.,” Kumar says.

Managing a global workforce can be a complex endeavor, with a mix of cultures, a lack of face-to-face time and the need to be online at different times. Kumar worried about feeling isolated, but Poshmark embraced the challenge with transparency. As a result, they built a strong international community that collaborates effortlessly across time zones. Integrating teams in the U.S., Canada, India and eventually Australia was essential to maintaining focus on company objectives in order to reach a common goal.

Expanding to India involved meticulous planning and strategic decision-making. After exploring the acquisition of Kumar’s company, Poshmark realized that a different approach was necessary to save time and money, and ensure legal compliance.

Instead of buying the company, Poshmark chose to open a foreign entity in Delhi and bring on Kumar and his entire team as Poshmark employees. An easy transition was made possible through its partnership with Global Upside, which Safeguard Global acquired in 2022.

Through this partnership, Poshmark gained an understanding of the legal requirements, process and cost of entity establishment, with a focus on the company’s short- and long-term goals. Entity setup includes preparing documents, applying for the necessary business license and obtaining tax IDs.

With an entity established in India, Poshmark was able to hire Kumar and his employees directly, ensuring a smooth, compliant transition. The Indian government has strict laws concerning the employment of full-time workers vs. freelancers, imposing restrictions and requiring special licenses for the latter. There are also mandatory annual bonuses ranging from 8.33% to 20%—all things Poshmark had to learn as they went through the process.

“Setting up our India entity was very easy for us, considering (Safeguard Global) had done this for multiple companies in the past, so they knew exactly what was supposed to be done,” Kumar says. "They guided us in the right direction. They did all the paperwork for us. We just had to review and sign all the necessary documents, and so it wasn't really painful for us at all." This partnership ensured that Poshmark's expansion into India was not only seamless, but also compliant with local laws and regulations.

The decision to establish Poshmark India was driven by more than just a desire to employ Kumar and his team under the Poshmark brand; it was also done in recognition of India's immense growth potential. With a rapidly growing e-commerce market, a population that was increasingly willing to embrace online transactions, and a team already on the ground who understood the local audience, India presented an exceptional opportunity for Poshmark.

"Being early in this market gave us a natural advantage," Kumar explains, pointing to India's 622 million active internet users.

Setting up Poshmark India brought its share of challenges, with local laws and cultural expectations; however, Poshmark's commitment to transparency and expansion paid off. The synergy between international teams, coupled with data-driven decision-making, led to efficient operations and the creation of innovative product features such as native support for local payments and shipping, new categories of apparel, and trending feeds specific to the Indian market. 

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