The romance with the Web started in 1999 and exists, willfully brawny, even today. Indiaplaza.com is perhaps the first major e-commerce company in India and one that has survived the winds of change. After securing a total of $3 million in angel funding during 2004-2011, the company successfully raised a series A round of $5 million in 2011. Probably in the middle of the next year, Indiaplaza will look at raising a series B funding.
The site that projected itself as a general e-commerce company and dealt in almost everything under the sun seemed to have lost it hold in the last few years. One reason being growth of home grown ecommerce competitors like homeshop18.com, indiatimesshopping.com, flipkart.com and naaptol.com; the other being lack of marketing initiatives. However, now the company is looking to re-instigate its position as one of the top e-commerce giants.
13 years past, 1 million transactions later K. Vaitheeswaran, CEO, Indiaplaza.com, persists to build a sustainable business. “We want to build a sustainable and profitable e-commerce company and we are sure we will get there,” he says. In a candid conversation with PluGGd.in he clears the air and tells us what Indiaplaza is doing for its customers. Read on…
1.The ecommerce space is lot more crowded than what it was when Indiaplaza started. How do you plan to (re)build a brand in this space?
When we pioneered India’s first e-commerce company in 1999, the internet users in India were less than 3 million and hardly 20,000 people shopped online. We were clearly ahead of our times but that is the challenge of envisioning something far ahead of anyone else. We have persevered despite the challenges of a very small market, a dot com bust, a global recession and slow growth because of our strong conviction that online shopping holds immense potential in India. We are finally seeing the good growth and momentum in e-commerce in India we visualized years back and I have no doubt that our pioneering efforts have played a big role in providing direction and hope to the e-commerce companies who have launched in the past few years. All greenfield industries and businesses are like that; it requires a pioneer to take the first steps and once a concept is built and a market is created, new entrepreneurs will follow. We continue to build our business steadily (our strategy is quite different from other e-commerce companies) and we are more than happy with where we are today.
2. In terms of payments, why does Indiaplaza charge extra for CoD?
There are no free lunches. CoD costs money, we pay this amount to service providers and we have no choice but to pass it on to consumers who wish to avail of this service. CoD in my view is a very inconvenient payment option for consumers and merchants and we encourage our customers to pay online. Over 95% of all orders on Indiaplaza.com are paid online; less than 5% are paid through CoD. This also reflects the high trust factor consumers have on Indiaplaza. Normally customers prefer CoD on sites where they are unsure of delivery.
3. Why is marketing effort so less?
I am not sure what you mean by less. For the fiscal year 2011-12, we set ourselves some ambitious financial targets and over achieved on all of them. Our marketing efforts were aimed at this. For FY 2012-13, we have a set of goals and our marketing efforts should take us there. If you mean we are not spending on TV commercials and full page print ads then I agree with you. Our assessment is that returns on mass media advertising for e-commerce companies in India will be quite poor in the medium term and we are not planning to waste our money in this manner. If this means we are spending less money, then that is fine with us.
4. It’s not wrong to say that Indiaplaza pretty much let go of this opportunity (and is again trying to grab a piece of the ecommerce pie) – what has been the reason for that?
We created this industry and opportunity in the first place and now that the opportunity is so huge, many new e-commerce companies have entered. This is expected and good for the consumer and the industry. We have always been a leading player in this space and we will continue to do so. India has 7 million online shoppers in 2012 and this number is expected to jump to 75 million in 2015 – a ten times growth in future. Given that all the growth is ahead of us, no company has grabbed the opportunity and no company has ceded the opportunity. Real leaders will be created over the next few years
Since 1999, we have seen many changes in India. Internet users in India have grown from 3 million to 100 million. Online shoppers have grown from 20000 to 7 million. Millions of people have no issues paying bills online, ordering air and train tickets on the web, withdrawing cash from ATMs globally through their debit cards all of which have helped create a mass of consumers who are comfortable transacting online and paying through credit and debit cards or through net banking accounts.
6. How many number of transactions does Indiaplaza completes/day?
We currently ship out over 100,000 items per month and we expect to cross over 1 million shipments in the next 12 months
7. Is there something unique or special Indiaplaza is looking to bring to its customers?
Our business strategy was formed 13 years back and it has not changed at all. We will offer our customers humungous choice and selection across all categories backed by low prices. We want to be the mass internet retailer and by definition mass retailers cannot offer anything unique from a product stand point. Our positioning is simple – we offer whatever a customer needs to shop or gift. Our approach is also clear – we want to build a sustainable and profitable e-commerce company and we are sure we will get there. Profitability is a very important goal for us.
8. Where do we see Indiaplaza in the next few years?
In the next few years, I expect Indiaplaza to be among the top 3 e-commerce companies and the top 10 retailers in India.