Rocket Internet in India: What’s the Big Deal?

Rocket Internet is having a ball in India. To give you a brief idea about the company, Rocket Internet is a German incubator, started by Samwer brothers and they are famous for cloning successful business models (like Groupon/Ecommerce) and even sold a clone, CityDeal to Groupon for $126mn.

The company launched Jabong in India and within a few months of the launch, Jabong has become a serious competition to the other players in the country.

Take a look at Jabong’s traffic:

Jabong : Traffic
Jabong : Traffic

Jabong: Traffic Compared with other ecommerce players

Jabong Vs. Other Ecommerce Players
Jabong Vs. Other Ecommerce Players

A cursory look and you will notice that Jabong’s traffic (*) has crossed Myntra/Infibeam/homeshop18’s traffic and from what we know, the number of orders too resonate with the traffic (internal plans include beating Flipkart traffic by mid of 2012).

You could say this is driven by aggressive marketing, but then being a late entrant with deep pockets brings its own advantages.

Rocket Internet in India

Other ventures of Rocket Internet in India include (online home and living ecommerce portal and magazine) and (online shopping destination for furniture and home ware).

Stealth mode ventures of Rocket Internet in India include:

Currently serving Delhi region, FoodPanda is an online food ordering service. The site, just like its counterpart JustEat collates menus from restaurants and enables order delivery.

OfficeYes is a B2B deal site that caters to the needs of businesses requiring everything from printers and paper to cartridges and current operates only in NCR region.

Jabong already has more than 200 employees and is turning out to be a significant threat to the incumbent players in India (the Alexa traffic currently stands at #48 in India, which is quite an achievement given that the venture was started late 2011).

Jabong Logistics
Jabong Logistics

Samwer Brothers and the Rocket Aggression

Rocket Internet essentially provides technical expertise/funding to startups and acts more like an incubator

We have resources in all relevant areas. Our expertise includes corporate design, build-up and optimization, market analysis, strategy development, product development, human resources, Java and PHP Development, Flash & Flex development, web design, online marketing (SEM, SEO, affiliate, display), internationalization, Operations & Logistics, CRM, tracking and evaluation.

The Rocket team has assisted numerous successful Internet companies at home and abroad with advice and capital.Among them are some of the most famous Internet projects in recent years, as eDarling, Groupon, and TopTarif Zalando. [from the website]

Of all the negative talks around cloning business models, the only thing that matters is the focused approach of Rocket Internet:

Their true strength is execution and exits. I have never seen a team execute as well as they do. They are in my opinion by far the most focused players in the European market when it comes to the start-up scene. Are they aggressive, unfair and hard to work with? Well, I don’t know about you but most successful people I know out there are usually aggressive, competitive and hard-charging. Whether you see them as unfair or hard to work with depends on which side of the table you sit. One can’t argue with their success though.

A lot of entrepreneurs who come to us already say “we worked for Rocket” which is the platform the Samwers have built up. It seems to be the school of hardknocks for German entrepreneurs. They were forced by the brothers to compete at the the highest level with aggressive milestones. It’s been rumored that they can also be quite domineering as bosses. This makes for good entrepreneurs after they’ve made it through this system as they learned in the most caustic of environments. [via]

Rightly said! You can argue for/against their cloning model strategy, but the truth is that you cannot ignore them. Even in India, within a short span of time, Rocket Internet has proven that a hands-on incubator experience is much more valuable than a strategy-level one and given the nascent stage of South East Asian startup economy, expect them to play a bigger role in creating successful Internet businesses.

For sure, Rocket Internet will change the dynamics of Internet business in India. What’s your opinion?

*: Alexa data has been used for relative ranking. For more, read: Who do I believe? Comscore or Alexa? [A few Mind-blowing Traffic Stats]

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