Tag Archives: Entrepreneurship

E-Commerce in India: Past, Present and Future

Today, the thought of living without e-Commerce seems unfathomable to most of us, if not all. Be it online payment of bills, buying products from an e-tailer or sending gifts to loved ones, e-commerce has become a part of our lives in more ways than one.

Even though the first e-Commerce company in India (FabMall) was set up as early as 1998, the industry is still fledgling; but no one can refute the fact that it is an industry that is rapidly maturing. With FlipKart raising close to Rs. 1200 crore funding recently, experts say that this industry currently, is in revival phase for the third time.

Looking back at the e-Commerce story in India, the first wave of e-businesses swept across India in the late nineties. But this wave soon fizzed out by 2001, due to absence of a tangible revenue model. Sanjeev Bikhchandani’s Naukri.com, Vaitheeswaran’s IndiaPlaza and a handful of other companies alone were able survive this first phase of e-Commerce in India.

The second version of e-Commerce which took off five to six years later, saw a sharper focus on revenue generation. The companies had a tangible business proposition. Though companies were able to generate revenues and create repeat purchases, the biggest challenge was to deliver profitability.

The third phase of e-Commerce is what is happening currently, where investors are willing to trust the potential of this largely untapped sector in India. The year 2007 saw a flurry of start-ups stepping into the Indian e-Commerce market, with the confidence and wherewithal of making it big; FlipKart being the most notable of them all. Though the success stories of Amazon, 360buy, eBay and several other companies in the U.S were there to emulate, the Indian firms still needed to figure how to make their businesses profitable, entirely on their own.

Let us now take a look at success stories of four such firms that have marched their way to glory in the Indian e-Commerce space.

InfiBeam

Founded in 2007 by Vishal Mehta, InfiBeam has carved a space for itself in the Indian market as a leading online shopping portal.

Vishal Mehta Infibeam

The InfiBeam tale has its genesis in the entrepreneurial zeal of Vishal Mehta. After graduating from Cornell University and working with Dell Computers for nearly a year, Mehta admitted himself for graduate studies in the Sloan School of Management, MIT which further consolidated his management skills, thereby strengthening his aptitude.

By the time he graduated, the market health was not too good, and with the Internet Bubble bursting contemporaneously, e-commerce prospects looked bleak. So, Mehta joined Amazon in 2002 and worked there for nearly five years before starting up on his own.

The beginning of InfiBeam was not an easy affair. Choosing to self-fund the early phase, Vishal Mehta had to sell off his car, his home and some of his long-term investments, to be able to pump-in the initial capital into InfiBeam.

InfiBeam’s first foray into the Indian online market scene was as an exclusive automobile portal. Today, in its online retail offering, InfiBeam has a plethora of products ranging from Books, Mobile phones, Computers and Accessories, Cameras, Watches, Health Equipment, Apparel to Cakes, Chocolates, Flowers, Combo Gifts and much more.

In 2008, InfiBeam acquired Picsquare, a leading online photo service in India with an associated customizable product selection, which was a high demand during birthdays, festival seasons and other community events.

InfiBeam’s business model has been primarily two-fold. Its initial mode of operation was the consumer business it started with, online. The next mode it incorporated (since 2010) was the technology infrastructure business.

InDigi, InfiBeam Logistics and Buildabazaar are a few ventures in the technology infrastructure business direction undertaken by InfiBeam.

In February 2010, InfiBeam became the first Indian company to launch an eBook reader, called the “InfiBeam Pi” which was received quite well all over.

We see that this brainchild of an Indian entrepreneur has come a long way within a short span of six years. And it is raring to march ahead and reach the next level of success, even more determinedly in the years to come.

Zomato

Zomato, founded in 2008 by Deepinder Goyal, is an Indian website that provides information related to restaurants, pubs etc. Currently, Zomato covers 14 cities in India and 17 cities in other countries, with 115,700 restaurants listed.

Zomato’s excellent user interface provides in-depth information such as scanned menus, mapped coordinates, contact details, pictures and ratings for all the restaurants that it covers.

Deepinder Goyal - Zomato

It was when Mr. Goyal, an IIT Delhi alumni, was working at Bain and Company in New Delhi that he struck upon the idea of an online restaurant information service. He noticed people queuing up at the pantry to order food, when he realized how easier it would have been had they been able to access these menus online. Thus, he left Bain and started Zomato (then Foodiebay) out of his apartment.

Initially, Zomato struggled to convince investors as they encountered the chicken and egg problem – customers find value only if they had the most exhaustive in-depth information about restaurants and restaurants find value only if there are enough customers. Hence, they constructed a solid content platform that was appealing to the customers. Info Edge has invested $ 6.5 million in Zomato since 2010.

zomato

Currently, Zomato is trying to implement intelligent Optical Character Recognition systems to supplement their existing dish ontology. Zomato also employs certain spam control techniques in order to maintain neutrality of the content on the website and to ensure that the content is useful to the users.

The revenue model of Zomato is based mainly on the sale of advertisement space to restaurants on the basis of a lot of people visiting Zomato.com and describing their preferences regarding geography, dining options etc. Advertisements on Zomato are hyper-local in nature i.e.; it lets you target customers on the basis of location, time of day, weather experienced etc. Zomato has served more than 105 million foodies since 2008 and the website has millions of users every month.

The immediate aim of Zomato is to expand into other cities in India and to increase its international footprint. Going by the interest and dependency shown by its users, Zomato is here to stay.

OlaCabs

Bhavish Agarwal had graduated from IIT Bombay in Computer Science and had worked with Microsoft Research India for a couple of years. Having always had the desire to do something on his own, he was on the lookout for a new venture. He had often thought how it was possible, with a little thought, to improve customer experiences in the cab services. Gradually, he realized that his academic background and work experience would enable him to address these issues with the help of technology. In December 2010, Bhavish Agarwal, along with Ankit Bhati, a fellow alumnus from IIT Bombay, came up with the idea for Ola Cabs.

OlaCabs

The vision behind Ola Cabs is to provide hassle-free, reliable and technology-efficient car rental service to Indians. Ola Cabs does not provide cab service itself. Instead, it is an online aggregator of car rental services. The Ola Cabs team conducts thorough background checks on the cab operators and the drivers before operating with them.

“There is a lot of supply and a lot of demand for taxis in every city, but there is no platform that connects the two. We believe that technology can bridge this gap and add a lot of value to this space,” says Bhavish Aggarwal.

Ola Cabs has a network of 1,500 operators and 4,500 cabs across the four cities of Mumbai, Bangalore, New Delhi and Pune now, with cars ranging from TATA Indica to BMWs and limousines

The OlaCabs app allows users to book cabs with a single touch on their smartphones. Ola Cabs also uses ‘heat maps’ to efficiently manage the demand and supply of cabs in various parts of a city at different points in time. The traffic alerts are made using information from various sources including social media. These help in guiding the drivers to reach their respective destinations in the shortest possible time. These measures help in inventory management of Ola Cabs.

The response so far has been great for Ola cabs. There are customers who use Ola Cabs multiple times for point-to-point services, in a day.

This is perhaps, just the beginning of integration of technology to bring ease in the process of availing taxi services in the country. The road ahead might not be easy, but with the aid of innovation, Ola Cabs might be able to give its customers the experience of smooth rides.

Myntra

Myntra, headquartered in Bangalore, was started in the year 2007 by Mukesh Bansal along with two of his friends at IIT Kanpur. Myntra mainly deals in all fashion and lifestyle needs ranging from apparel, accessories, cosmetics and footwear from over 500 leading Indian and international brands. With a turnover of almost $100 million, Myntra intends to become the largest player in India E-commerce retail industry.

In initial days of its operation, Myntra operated in the segment of personalized apparels and accessories like T-shirts, mugs, and personalized cricket jerseys. The business was an almost zero-inventory model with a focus on supply chain automation and fulfillment.

In 2010, Myntra pivoted into the B2C model and expanded its catalogue of products from personalized items into fashion, lifestyle and tech gadgets among others.

Myntra

This transition from Business model from B2B to B2C not only brought about a significant change in terms of increase in sales, but also in its administrative body. Two of its cofounders left the company and moved on to jobs in different companies.

Myntra was announced as a winner of the Red Herring Global 100 award in 2010 for its recognition under the leading private startups from North America, Europe, and Asia for their innovations and technologies across their respective industries.

The year 2011 saw phenomenal developments in Myntra as its brand building campaign named ‘A fashionable new age’ was launched in TVC which featured Myntra ‘juxtaposes new-age fashion with old-world grit’ which promoted its offering in sports casuals.

In 2012, its Out of Home campaign in chief metropolitan cities was done in order to build brand awareness and promote online shopping.

Services like free shipping, cash on delivery and 30 day return offer with 24 hours dispatch were the highlights of its campaign named ‘Real Life mein aisa hota hai kya’ in July 2012

Myntra is India’s largest online seller of branded apparel. With the approximate annual revenue of $100 million, it is second only to Flipkart.

Surely, the online e-commerce startup has a lot more to discover and fulfill its dream of becoming the largest online retailer.

The E-Commerce Ecosystem

The nexus between service providers, logistic teams and payment option providers ensure that the goods produced by manufacturers reach the customers at the right time, right place and in perfect condition. Any glitch in the performance leaves the customer dissatisfied which may ultimately lead to losing the customer to a competitor. Managing this ecosystem is the primary task that an entrepreneur has to undertake in order to run a successful venture.

There are various industries which come together to provide the necessary back-end infrastructure to an e-commerce company. E-commerce industry has a wide eco-system in place, which takes both time and effort from each stakeholder to come together and provide superior customer experience resulting in customer loyalty, which is rare in this industry. Let us define some of the key industries that form the building blocks of an e-commerce site.

1. Basic infrastructure providers: Industries ranging from web and internet, mobile operators, hardware and software service providers, real estate, government and other basic utility providers.

2. Product sourcing and distribution network: Even though an e-commerce company delivers a product, it is basically a service provider. Manufacturing industry, suppliers and vendors, warehouses and inventory, and transportation logistics and shipping form the most crucial component of e-commerce industry.

3. Revenue collection and management: Managing the financials of an organization is one of the most challenging tasks, every shareholder wants the largest piece of the pie and you have to struggle to manage the funds as well as build your bottom-line. Investors are bullish about the e-commerce industry but they are also wary of it because of its inability to generate profits in the short-run. Choosing the right mix of mode of transfer and payment gateways can increase profitability and satiate the investors to a great extent.

4. Advertising partners:  According to 2012 e-Commerce Report from Channel Advisor – IMRG, the average conversion rates for visits to sale is 4 percent. This showcases an immense need to bring more traffic on e-commerce which would lead to higher number of conversions. Search engines, online media, print media, social media, events management companies are the collaborators for the public relation activities of these companies.

5. Associations and external support: In a fast-paced environment where the business models are changed pretty frequently with changing technology the consulting firms, industry experts and networking forums like TiE, Nasscom etc. are essential for survival of an e-commerce firm.

An entrepreneur is not born with an idea, he develops one. But what is more important than generating an idea is its execution, managing every stakeholder and setting each piece right in the jigsaw puzzle to make a beautiful picture. This is what also goes in managing of an e-commerce firm.

What lies in the future?

With the increasing middle class and time-strained young professionals, the e-commerce industry is expected to experience a major boom in the next decade, perhaps reaching USD 260 billion by 2025, according to a report by First Data Corporation and ICICI Merchant Services. Over 75 million netizens are expected to shop online by 2017, up from the present 10 million Indians in 2012. For this industry to grow as expected in the future, it is required that it understands the dynamics of Indian marketplace and the psyche of consumers.

1. Consolidation will happen: Unpractical business model, sales promotion through offers and heavy discounts has led many e-commerce firms to fail in the past. The investments in the industry are drying up and the rate of acquisitions is expected to increase in the coming years. Some of the recent acquisitions being SherSingh and Exclusively acquired by Myntra, LetsBuy acquired by Flipkart and Esportsbuy.com acquired by Snapdeal.

2. Customer experience will be the growth driver: Customer experience encompasses every interaction a customer has with the service from placing an order to interacting with the customer service team, to the actual delivery experience. Better service ensures that the customer would buy again from your site rather than your competitors.

3. Looking beyond the metro cities: With increasing employment opportunities and higher disposable income with the youth, tier 2 and tier 3 cities are seen as the growth market for the e-commerce industry. Building a robust supply chain can ensure penetration into this market.

4. Overcoming the gigantic drawbacks: The e-commerce industry is marred with persisting issues such as high customer acquisition cost, high inventory carrying cost, lack of adequate laws and policies towards e-commerce, expensive cash-on-delivery model and high cost of fulfilment. A way has to be found to move out of this death-trap if the e-commerce companies have to flourish in future.

The path ahead may be tough and would require diligent efforts on the part of entrepreneurs and investors equally, but it definitely exists. Indian firms are required to have a mixed approach by embracing globally tested strategies along with a localized flavor in their enterprise, to stand the test of time.

^This article written by Amrita Agrawal and I, was published in INCUBATOR, the annual entrepreneurship magazine of IIM Shillong. Link to the magazine: http://issuu.com/icube.iims/docs/incubator_-_issue_1_-_september__13

MSD P51 – EmergE 2013

EmergE 2013 – Envision, Engage, Evolve with the Entrepreneurial Summit of IIM Shillong*

EmergE 2013, the Annual Entrepreneurship Summit of IIM Shillong commenced on 14th September, 2013. The event was inaugurated by the Director – IIM Shillong, Dr. Amitabha De who congratulated the students for organizing EmergE 2013.

IMG_3075

He had stressed on the importance of grooming an individual to be a job creator rather than being content as a job seeker. Dr. Keya Sengupta, Professor of Economics, and Faculty coordinator, EmergE also congratulated the students on the excellent execution of an event of such magnitude. She brought to the attention of the audience that such an event was ideal to serve as an excellent platform for the exchange of ideas.

The session meandered into the intricacies of ‘Social Entrepreneurship’, marked by a conclave, which was moderated by Dr. Sanjeeb Kakoty, Assistant Professor – IIM Shillong, who has vast experience in the field of documentary making and writing.

IMG_4734

The esteemed speakers of the conclave were Mr. Arun Krishnamurthy, Founder-Environmentalist Foundation of India, Mr. Parag Mankeekar, Founder-Director Neeti Solutions and Mr A. Muruganantham, Founder-Jayashree Industries; all leading entrepreneurs in their respective domains.

The event commenced with the launch of the inaugural edition of INCUBATOR, the annual entrepreneurship magazine of IIM Shillong and was followed by a panel discussion.

IMG_3083

The panelists raised concerns about the inability of the people in understanding the challenges of economic development and sustainable environment, thereby stressing the need for entrepreneurs who can garner public interest and contribute towards sustainable economic development. Due importance during the discussion was given to proactive entrepreneurship, with special focus on choosing the right team to work with and the significance of team dynamics.

IMG_3090

The panel also discussed the importance of a complete business model and its role in attracting investors for any startup business ventures. The speakers impressed upon the audience to learn the art of ‘achieving’ rather than ‘surviving’. They urged the audience to stop seeking financial benefits and to implement their problem solving acumen for the larger benefit of the society.

“You’ve got to learn to dream while you’re awake, those are the dreams that will come true”, with this inspiring quote, Dr. Parag Mankeekar asked the audience to shed its inhibitions and follow dreams.

IMG_3113

REVEAL, the inter B-school Case Study Competition, conducted in association with POLARIS as part of EmergE 2013 saw Team Khublei from IIM Shillong emerging as the winners while Team Core Bankers from NMIMS securing the runners up position. The winners took home a prize money of Rs. 40,000 while the runners up won Rs. 20,000.

IMG_3187

The event was followed by the e-commerce Conclave, which took place in the evening of 14th September 2013. It witnessed the participation of three experts in e-commerce: Mr. Anaggh Desai – Advisor, Retailers’ Association of India, Ms. Rubia Braun – CIO, Metro Brava and Mr. Parikshit Borkotoky – Founder, Kraftinn. Prof. Tara Shankar Shaw, Assistant Professor – IIM Shillong, moderated the discussion. The discussion analyzed various logistics problems in e-commerce and possible ways to deal with them. The participants of the discussion gained valuable insights into the operational problems in e-commerce in India and the benefits that would give to the Indian consumers. Also, the discussion explored consumer behavior and the role of the government with respect to e-commerce in India.

IMG_3222

The panel unanimously decided that e-commerce is the way forward but it must overcome  the present hurdles and come up with innovative solutions in order to grow and tap the huge market potential in India.

The second day of Emerge 2013 commenced with an expert talk by Ms. Rubia Braun – CIO, Metro Brava who spoke on “30 things to learn before you are 30” – some serious food for thought for all future entrepreneurs. The engaging, motivational and insightful discussion revolved around revamping oneself as an individual such that it readies him or her for taking up future entrepreneurial initiatives.

“There are no fairytales unless you make them yourself. Be the exception, and know that you’re probably not the exception!” said Ms. Braun, encouraging the audience to stand out from the crowd and to follow one’s dreams despite the many hurdles the world might stow in one’s way.

IMG_3234

The next expert talk by Dr. Parag Mankeekar focused on how a certain incident or event changes the course of one’s life. He shared his life experiences at various disaster sites and spoke about the importance of disaster management in a country like India with a huge population.

IMG_8495

The final event of Emerge 2013 was the Investors’ Conclave. The speakers who graced the podium were Mr. Abhijit Ray, CEO – Unitus Capital, Mr. Prajakt Raut, VP – India Angel Network, Mr. Shyam Menon, Investment Director – Infuse Ventures and Mr. Kunal Upadhyay, CEO – CIIE, Ahmedabad.

IMG_3267

Important and crucial decisions relating to fund-raising for setting up an entrepreneurial venture were focused upon. The insightful session concluded on the notes of innovation, commitment, decisiveness, awareness and creativity, the five major facets that can drive any business plan to obtain adequate funding and encouragement from the investors.

EmergE 2013 came a close with a series of entertaining performances by the students, bringing the perfect finish to the action packed weekend. State Bank of India was the Title Sponsor and the summit was co-sponsored by Central Bank of India and The Meghalaya Co-operative Apex Bank Ltd. and POLARIS was the Event Sponsor for REVEAL, the case study competition.

*This news article about EmergE 2013 was published in Shillong Times newspaper on 19th September 2013. As an organizer of the event, I am happy that EmergE 2013 went on well and happier that it got over.

Lessons for Entrepreneurs from MS Dhoni

Are you a budding entrepreneur looking for some inspiration to run your startup? Look no further. The life of MS Dhoni has many lessons to offer you.

From being a ticket collector to becoming the richest cricketer on the planet, MS Dhoni’s is a success story that every startup would try to emulate. Having followed Dhoni over the years, I list down a few characteristics of the man which when followed could help entrepreneurs lead their companies better.

Walk the talk

Apart from being a great captain, Dhoni more often than not, delivers with his batting under crunch situations. This never fails to inspire his team mates. A lesson for all entrepreneurs here is to walk the talk. Being a hands-on entrepreneur willing to get your hands dirty inspires your employees.

After all, there is no leadership technique that can match hard work.

Be Calm, always

“Anger is the cause of all evil. One must know how to control it. Otherwise, life will be miserable”, Rajnikanth once said in a movie. This applies equally to startups as well.

Calmness is something that defines Dhoni. If eight losses in eight away test matches cannot make Dhoni lose his calm, then probably nothing can. Being calm under dire circumstances is difficult to emulate, but having a leader who always keeps his cool has a contagious effect on the team under him, thus providing better results.

Back your Team

Be it Joginder Sharma in World T20 2007 or Ishant Sharma in Champions Trophy 2013, Dhoni has always backed his players to perform when everyone else thought otherwise. If there’s one lesson to be learnt from Dhoni, it is placing undue trust on your team to perform. While some may not pay the dividends, most will.

msd

It’s always “We” and never “I”

Remember, you are a leader only when your team accepts you to be one. Dhoni has never failed to realize the importance of team effort. While giving credit to the team for success, Dhoni takes the blame of failure on himself.

Humility is an essential character that a leader must possess. It is important to acknowledge that it is the success of the whole team that brings home the winning trophy.

Know yourself

From the time he entered into the international arena, commentators and critics have never stopped talking ill of his peculiar batting style. Today, he stills bats the same way, to great effectiveness. As a leader, it is your responsibility to identify your strengths and acknowledge your weaknesses. Being aware of your weaknesses is in itself a win.

^This article was published in INCUBATOR, the annual entrepreneurship magazine of IIM Shillong. Link to the magazine: http://issuu.com/icube.iims/docs/incubator_-_issue_1_-_september__13

*Inspired by a yourstory.in article I read sometime back 

MSD P50 – Menstrual Man

I had the chance to meet a number of people personally and interact with them, thanks to EmergE 2013, the annual entrepreneurship summit of IIM Shillong.

Mr. Arunachalam Murugnantham and Mr. Arun Krishnamurthy were two among them who have had a lasting impact on me.

If you haven’t heard of Mr. Arunachalam, I strongly recommend you to watch this video:

If I were to quote Wikipedia:

Arunachalam Muruganantham discovered his wife collecting rags to use for her menstrual cycle as their family couldn’t afford the commercially available products from MNCs. He devised many of his own experiments in an effort to understand the problem. In the beginning he looked for female volunteers who could test his invention, but most were too shy to discuss their menstrual issues with him. He decided to test his inventions on himself, by using animal blood among other methods. His preoccupation of trying to solve the issue of menstruation which is somewhat taboo in India resulted in him being ostracized from his community and family (albeit temporarily). He eventually learned that wood pulp would be the key to a solution, and devised a machine that allows a simple and cost effective pad creation process which can be run with basic training. Muruganantham’s story was the subject of the feature documentary, Menstrual Man.

He says and I quote

My family and people living in my village thought I was a dracula, drinking women’s blood. The people in my village even went to the extent of tying me to a tree with iron rod, thinking that I was a psycho out of my minds.

He had to live with such people from 1997 (when he started his experiments) to as late as 2004, till his invention of a sanitary napkin making machine was recognized by IIT Madras during a competition.

Contrary to general opinion, Mr. Arunachalam doesn’t produce and sell low cost sanitary napkins; instead, he sells low cost sanitary napkin making machines to villages across India, which not only helps women live with hygiene and dignity, but also provides a sustainable means of livelihood to under-privileged women.

His vision is to provide employment to a million rural women through this model, and achieve 100% sanitary napkin penetration in India.

When asked how it felt during those seven years, he says it felt very lonely. “It’s the case with any entrepreneur. You are always lonely till you prove yourself”.

He had the audience in splits in his 10 minute speech to the students of IIM Shillong, much like the TEDx Talk shared above. For example, when an IIM Kozhikode student had asked him whether he caters to the bottom of pyramid people, he had replied, “No, currently, we are not selling any machines in Egypt”. 😛

His sanitary napkin making machine costs less than 70,000 rupees; compare it with the cost of such machines built by MNCs which may cost crores of rupees.

His model has been used in Brazil and several other countries. Despite hoards of MNCs reaching his doorstep to commercialize the product, he has constantly kept his foot on the ground.

He rubs his right shoulder with Ratan and left shoulder with Mukesh and takes seminars to MNCs like Microsoft, Intel, etc.  

His talk is very straight-forward and to the point, and hilarious to the hilt. He does not hesitate to call a spade a  spade.

He was dejected when I told him that less than 1% of people graduating out of IIM Shillong start-up on their own immediately after graduation. “I see this is the case with many B-Schools and Colleges. If a school dropout with broken english (referring to himself) can achieve this much, then there’s no limit to what you guys can”, he told me.

Easier said than done.

From IIM Shillong, he has now gone to SP Jain for a conference and then immediately has an interview with BBC this weekend.

“Ever since 2004, it has always been like this. My story gets published everyday in some place or the other”.

What a man!

Tomorrow: My experience with Mr. Arun Krishnamurthy