Accel India recently announced an investment of $6mn in Zansaar, Bangalore-based online store that offers a comprehensive range of home décor, garden and international food products. We asked Accel’s Subrata Mitra on the investment decisions and importantly, Accel’s take on the CoD (Cash on Delivery) model of Indian ecommerce sites.
Pluggd.in: Home decor is a niche category and a subset of what other ecommerce startups offer. What made Accel decide on the investment?
Subrata Mitra, Accel : We have a different take on the category, and not just based on what products we offer. It would take experimentation to get there, and we think the team is in-tune with that process.
Pluggd.in: In general, the ecommerce investment sentiment is on a low – so is Accel still looking for investing in ecommerce segment? If yes, niche or horizontal plays?
Subrata Mitra, Accel : Investor sentiments are always likely to change rapidly, especially since we’re still very early in the evolution of ecommerce in India. Accel believes that multiple companies would become sizeable, but would take time to get there. In the near term, we might not do too many new ecommerce investments, but definitely don’t want to call it done.
Pluggd.in: Isn’t CoD a killer? Do you think ecommerce startups in India have actually increased the pie for ecommerce, as majority of payment is still CoD – which fundamentally means that Indians still do not trust ecommerce players (or do not have online account to buy)? As one of the major VC player, what’s your insight/opinion regarding CoD?
Subrata Mitra, Accel : Trust factor would start getting better as some of the players get bigger & create recognizable brands; likewise, more Internet savvy consumers are starting to pay online (since the base was small, its taking a long time to get that # to critical mass). Also, we think that part of the reason people use CoD is because of convenience (1-click doesn’t work). As the segment evolves, so would payments & consumer maturity, and we should be able to get a reasonable balance in terms of CoD vs others.