Yebhi’s Nitin Agarwal Quits, Company Says Not Looking for Further Investments

Update:  Rajul Jain, a co-founder & Head of Operations has also resigned.

Earlier: Online fashion retailer Yebhi whose board members Raul Rai and Suvir Sujan had quit in November last year, now has a new casualty. NextBigWhat has learned that co-founder Nitin Agarwal, the company’s third director who holds over 20% of the company’s shares has also resigned. Agarwal has resigned from the company’s board with effect from 25th January 2014.

yebhi-new-logo

This leaves only co-founder and CEO, Manmohan Agarwal at the helm. The exit of Sujan from the company means that Nexus has written off its investment in the company. Sources tell us that Catamaran has also followed suit but we couldn’t confirm it with Catamaran.

Yebhi has a gross merchandise value in excess of Rs 200 cr and is looking to break-even and attain profitability, Agarwal said in an interview. Yebhi, however, has the Irctc deal going for it. The company won the much contested deal to run the shopping site for the online ticketing site of Indian railways last year. Edited Excerpts.

How has your growth been in 2013-14?

In 2013-14, we haven’t really been pushing growth. We’ve been growing organically by 30-40%, but that’s all.

What kind of traction have you achieved so far? Profits?

I can’t really give you any numbers right now.

Yebhi-IRCTC, how is the tie up going? What kind of turnover are you getting from it?

The tie-up is doing well. We have been getting 300-400k visits to the shopping site daily. And we’re getting a good turnover, can’t share numbers right now.

What is your GMV right now?

Our GMV is in excess of Rs 200 crores.

What are Yebhi’s plans in 2014?

We want to consolidate and grow and attain profitability.

There are rumours of Yebhi shutting or scaling down, is this true?

There will be no shutdown. I don’t know where these rumours are coming from. And, I wouldn’t call it scaling down, I would call it consolidating. We’re looking to break-even and attain profitability.

What do you mean by consolidation?

In terms of consolidation we have reduced several costs, optimised marketing spends, have gone slow on discounting and are trying to optimise on margins the same way in the coming year.

So you are not going to shut down?

No, not at all.

What about Nitin Agarwal’s exit?

He left for personal reasons. He wants to start a new venture. We had formal discussions only about 2-3 weeks back.

Catamaran and Nexus have written off investments? How will you raise further rounds? What is your plan?

The investors have not communicated anything to me formally. We don’t need any further investments. While all the other companies are busy burning capital for top line growth, we just want to create profitability first and break-even. We are not planning on raising further rounds of investment.

By when do you expect to break even?

By next quarter.

Will Facebook’s Growing Clout in India Challenge Google’s Wallet Share?

Social networking giant Facebook & search giant Google are set to battle it out  in India’s Rs 2,260 cr digital advertising market. As Indian internet users start spending more and more time on Facebook, brands, especially e-commerce companies, have begun splitting their marketing budgets between the two.

Traditionally, Google used to dominate the online advertising space in India with its search-based advertising. However, Facebook seems to be gearing up to counter Google’s ad dominance having recently announced changes to its advertising tools (1, 2, 3, 4, 5).

With over 90 million users in India, Facebook is already a force to reckon with and advertisers have begun to take note of the opportunity that the platform offers.

The Numbers in India So Far

Visitors vs views
Source: comScore Media Metrix ‘India Digital Future in Focus 2013’ March 2013*

For instance, a mobile recharge company that currently splits it marketing budget in favor of the search giant, soon plans to split on a 60-40 basis between Facebook and Google. The company feels that Facebook is better for giving offers and at re-targeting or re-marketing – an area in which Google traditionally leads.

A re-marketing strategy involves targeting ads towards people who have previously visited an e-commerce portal, regardless of which page they navigate to. Facebook’s trove of varied user information from basics like age, gender, to more targeted information like relationship status, page likes and interest – all crucial to targeting the right potential client.

Tools Advertisers Use

Apart from the re-marketing strategy, there is also a lot going on in terms of the kind of channel that an advertiser chooses to pick. In a digital advertising market that is set to reach Rs 2,398 crore by March 2014, a majority of advertisers have chosen search engine marketing, or bidding on AdWords as the highest spend in the search ad budget. About 85% or Rs 723 crores is allocated for SEM. Google leads there.

However, the percentage spend on search ads witnessed a 3% drop from the 41% in FY12. Some reports suggest that this drop is due to the increase in spend on Social Media.

ad spend
Source: ‘Digital Advertising in India’ -IAMAI March 2013

Split in Online Advertising

For Google, e-commerce companies are the biggest clients in India. Automobile and brick and mortar companies who don’t have active online sale are also big advertisers on Google. The preferred ad formats on Google that garner the company most revenue are the banner ads that appear on Youtube’s homepage and through remarketing say sources.

E-commerce portals that form a major chunk of Google’s ad revenues include (in order of share of revenue contribution) Flipkart, Myntra, Fabfurnish and Jabong says a source who did not wish to be named. These portals also advertise on Facebook, but at a much smaller scale. Google did not respond to questions we sent.

“Google is more intent driven, where you have to bid for the right keywords for ads. While Facebook is more about brand-building and ‘awareness’ marketing and not about immediate conversions, but long-term conversions. The conversion trend tends to be slightly better in Google,” says Vaibhav Aggarwal, co-founder & MD, Fabfurnish.

Though he refused to comment on the exact split made by Fabfurnish, he believes in a balancing act. “As long as our RoI is maintained, we feel both are important and a fine-balance needs to be maintained,” he added. Choosing the right channel to advertise on depends on the objectives and economics that an e-commerce company wants to attain they say.

E-commerce firms Shopclues, which has smaller advertising budgets compared to others like Myntra, spends about 20% on search engine marketing, 15% of social media and 40% on in-house customer acquisition programs.

Strong ad sales boosted Facebook’s Q3 ad revenues by 66% over the previous year to $1.80 billion in the quarter. It has also slowly, but quietly unveiled a slew of measures to boost ad revenues like releasing a “tracking pixel” to allow advertisers to go to their websites using Facebook ads, specifying objectives and even choosing where their ads appear among other.

It is on this that Bangalore based e-commerce company Urban Ladder puts its faith.

“We believe in the power of social referrals. In addition, our belief is that communication of product quality, through strong visuals is more important, than having deals driven marketing. Facebook works much better for a highly visual brand relying on the power of a virtuous cycle,” says Ashish Goel, founder & CEO, Urban Ladder.

Like Aggarwal, he too feels that the choice of channel is to be subject and category specific. “If there is a category which has high search volumes, and a customer does comparison before purchase Google would probably work better. On the other hand, for a business that by its nature has virality at its core, FB should be the channel of choice,” he explains

In addition to its recent changes, Facebook is now also betting on the automotive space – currently the second largest contributor to Google’s ad revenue.

A comScore report has found that not only does Facebook help more automotive brands that are advertised, but it also significantly reduces competition. Automotive ads placed on Facebook were found to have 70% reach among in-market households.

What Ad Men Say

E-commerce companies like Myntra, Jabong and Yebhi spend Rs 10-15 lakhs on Facebook impact properties like logout banners say ad gurus, with at least 3 insertions a month.

In fact, social networking sites like Facebook, have already cornered a large portion of the money spent by brands on display advertising. According to comScore, at 39%, social networking sites in India served the maximum ad impressions, while the rest went to portals and web services.

“E-commerce brands spend on normal ads and also on retargeting on Facebook. The maximum impression in India (from September 2013 data) was also served on Facebook,” says an advertising professional.

Not a Threat Yet

However Google does not really see that as a threat, if what persons who are familiar with the matter are to go by.

“No advertiser would leave Google for Facebook. Google is much more than a social networking site. They have search, shopping, videos etc. Especially with Youtube, advertisers would get much more than what they invest in Facebook,” says the source.

For all the talk of Facebook being just a networking website, is Google feeling the heat? The search giant has recently launched the beta of Google +Post ads, a social ad format that depends on the search giant’s networking arm – Google+. The +Post ads run on Google’s Display Network which constitutes over 2 million websites and allows customers to comment and have conversations with the brands. Google+ currently has an estimated 30 million users in India.

* Also see: This Popular Site (According to Comscore) Just Doesn’t Exist

With Personalisation Suite, Targeting Mantra Ups Conversion Rates for Ecommerce Stores

targeting mantraWhile working in the core personalization team at Amazon, Saurabh Nangia realised that most online businesses and small businesses lacked user personalization and targeting.

Though the companies were spending much time & resources on acquiring customers online, many of them were unable to retain customers, improve customer loyalty and increase conversion rates.

This thought got Saurabh thinking and Targeting Mantra was developed as a solution for it. The SaaS based service offers analytics to websites based on customer profiling that provides additional insights to businesses and in turn help them offer better product recommendation to customers.

Currently the service offer 15 solutions for personalization such as similar items widget, people who bought also bought, frequently bought together, recommendation emails, banner ads, etc. Customers can also track their performance through the provided analytics dashboard.

Targeting widget

The product was launched in Aug 2013, and has managed to get 6 e-commerce companies as customers till date. These customers include ShopClues.com, Yebhi.com, YepMe.com and Juvalia. More companies are in the trial phase and are expected to become customers soon.

“All of these companies have seen an average of 10% increase in the conversion rate and ~20% of site-wide purchases coming through us,” says Saurabh.

The company also plans to take the product international in first quarter of 2014.

By offering personalization, targeting and analytics as a single package, the startup wants to help companies reduce time and cost.

 The cost to implement the service depends on feature requirements, traffic on the website, catalogue size and revenues. The company estimates the average to be around $1000/month for smaller firms, $4000/month for medium sized firms and 10,000/month for large clients in the Asian and American Markets. The company provides a 30 day trial period for their customers, and they are charged only once a significant gain through the service is seen.

Targeting analytics

The bootstrapped startup says that they are currently cash-flow positive, with an expected annual revenue of $300,000, an amount they expect to increase over the course of the year.

 In the future iterations of the product, the team will add provisions to take a customer’s social behaviour in account to curate recommendations. The dashboards will also be updated to offer price-analytics and demand forecasting.

With the e-commerce space in the country growing, there are many tools that help websites solve the customer conversion puzzle. NudgeSpot , VisitorEngage, WebEngage, Get Satisfaction and UserVoice are some of the other tools that offer similar services.

How Some Brands Cut Through The Noise During GOSF 2013

The recently held Google Online Shopping Festival (GOSF) saw almost all of the top ecommerce companies in the country trying to offer their best deal to the customers. The entire social media and Internet was clogged with a barrage of offers and discounts from these portals.

 Getting attention in the real world is so difficult, let alone the digital world with all the fast changing social activity and noise. Standing out and getting noticed requires some good ideas and online stunts to be performed.

Inspite of all the noise around the GOSF 2013 festival, some ecommerce portals managed to get their message out, cutting through the rest of the noise. Here is a look at a couple of them.

Shine.com & Superstar Rajinikanth

Shine.com, the job portal owned by The Hindustan Times, had one such interesting online stunt up their sleeves and it did manage to garner some attention during the recently concluded GOSF 2013.

Shine.com helps users by getting their resumes get better exposure through social and employee referrals. The service also has a resume writing service, where users can get resumes made through professional resume creators.

The company earlier created a profile for Superstar Rajinikanth on LinkedIn and then ran a Twitter contest based on it from 12th December, the second day of GOSF, which was also Rajinikanth’s birthday. The contest ran along with a discount on their resume writing service.

Rajinikanth

Within hours their Twitter contest, with the hashtag #RajinikanthCV, was trending on the social networking site.

To participate in #RajinikanthCV contest,connect to #RajiniKanth’s Linkedin profile & tweet some wonderful skills! http://t.co/vZV6SfFLBJ

— Shine.com (@Shinedotcom) December 12, 2013

The Shine.com marketing team made good use of the fact that Superstar Rajinikanth will stand out no matter how loud the noise is.

Google & The Nexus contest

Google India had a bad start at GOSF with the GOSF site facing a lot of downtime and glitches. Netizen had taken to the social media to vent out their anger and frustration over this inefficiency by GOSF organizers.

In a smart move to overpower the hate noise being made on social media, Google India launched the GOSF Nexus 7 contents on December 13th , along with the news of extending the festival by a day.

The contest gave away a Nexus 7 every hour it ran and the contestants had to share on Twitter ‘Why they deserved the best deals’ along with the hashtag #GOSFDeal.

Tell us why you deserve a deal & win a Nexus 7 every hour. Make sure you use #GOSFDeal & #GOSF for the entry to be valid.

— Google India (@googleindia) December 13, 2013

The hashtag immediately started trending ensuring a positive trend for Google India and the festival across the social networking site.

This marketing stunt helped Google India drown all the negative comments being shared regarding GOSF and all it took them was nearly or less than Rs 2,40,000 (approx. cost of 24 Nexus 7) to get trending on Twitter and keep the netizens engaged.

GOSF 2012 vs 2013

Unlike last year’s GOSF, which ran only for 24 Hrs, this year’s edition saw the festival happen over a 72 Hr (11th-13th Dec) period with over 200 participating portals, which was later extended for another 24 Hrs due to a technical glitch that lost shoppers a good part of the first few hours of the festival on the first day itself.

Here are what some the activity the online portals saw during the period.

This year online marketplace Snapdeal saw a 10X increase in sales during GOSF 2013, as compared to last year. While sales was largely from metro cities last year, this year saw the company getting sales from smaller cities too.

Online fashion store Myntra also saw a similar trend this year during the festival. The portal sold a record 1 lakh products on a single day and saw over 3.5X increase in its revenues during the first 24 hour period.

GOSF search trends
GOSF search trends

Indiatimes Shopping also saw a 1.5X increase in business during the festival as compared to last year’s GOSF. The portal said that 60% of the customers it saw shopping on the website during GOSF were new customers.

Online coupon site CouponDunia saw more than 2,94,000 visitors during this year’s GOSF as compared to nearly 84,000 visitors who visited the site during GOSF 2012 edition.

Some Sales Data From GOSF 2013

  • Ecommerce portal Myntra sold 1 lakh products from their fashion category on the first 24 Hrs of the festival itself.

  • Homeshop18 saw a  4X increase in sales during the festival as compared to sales on other normal days.

  • Amazon India saw a 5X increase in overall sales volume across categories.

  • Online shopping portal Infibeam said that their website saw 80% jump in traffic and nearly 60% jump in actual transaction during the first 10 hours of the festival.

  • Ecommerce site Yebhi also witnessed 50% increase in traffic during GOSF 2013 as compared to sales on normal days.

Google’s Shopping Festival GOSF 2013 Is Back

Google India is back with its online shopping festival. Unlike last year when the shopping festival was held for just a day, this year the Great Online Shopping Festival (GOSF) will be spread over 3 days from the December 11-13.

The search giant has been promoting e-commerce in India ever since it launched the festival in an attempt to tap into the burgeoning online shopping space in  India. According to a report compiled by Google and TNS Australia there was 128% increase in interest in online shopping among customers in 2012.

Last year, the festival claimed to show great deals from leading e-commerce players like Flipkart, Jabong, Babyoye! and Myntra among others. This year too, Google has promised “countless discounts from cars to cashmere and laptops to luggage.”Gosf

According to Rajan Anandan, VP & Managing Director – Google India, partners who were part of the festival  last year, saw massive increase in online traffic and some of them had already sold out their stocks by 3 pm. e-Commerce sites like Myntra.com had reported a 75% increase in traffic and 120% increase in sales, while others like India Times, Pepperfry and Snapdeal saw a 40-50% increase in traffic.

Unlike the e-retailers who lauded the GOSF 2012, customers themselves were disappointed by the attempt. Reviews of the GOSF 2012 on twitter called it a “scam”, with “lots of hype” but “no substance” after products shown on the site contained marginal discounts to the actual price. It will be interesting to see how Google has fixed the issues in its 2013 edition of GOSF. Those taking part include Jet Airways, Yebhi, eBay, Dish TV and many more.

The Ecommerce to Marketplace Pivot : What More Should Flipkart et al Do

All the e-commerce stores are now marketplaces. Snapdeal, Yebhi, Flipkart have all pivoted over the last year.

Which means they don’t own inventory, don’t store it, and don’t deliver it themselves, at least not like they used to when they were direct sellers themselves. And that means less consistent user experiences in terms of product quality, deliveries and returns.

The effect is already very visible on social media and online fora where one’s started hearing of many more less than happy voices about even those such as Flipkart, which had an unblemished history of perfect service and delivery. Perhaps Flipkart has suffered the most in terms of image owing to the very high standards it set in its inventory model avatar and the very high expectations that have come to be part of the consumer’s mental image of the brand.

To be fair, most of these marketplaces make a fairly serious effort to offer, for any product, multiple seller options to the user, with ratings and scores, stock availability and estimated dispatch and delivery times. However, one hears of cancelled orders, changed prices and delivery delays every now and then, and even the odd instance of the wrong – or in extreme cases, no – product delivered inside the packaging!

Almost inevitably, the marketplace bears the brunt of the consumer’s ire. After all, it is their brand and often inducement that draws a buyer in and ensures a purchase happens.

So given this new reality of the marketplace, what else can the e-commerce players do so that they both continue to be seen as preferred destinations, yet do not bear the complete burden of their vendors’ actions?

Be a Mall. Not a Store

Malls are marketplaces!

Be a better version of this!
Be a better version of this!

They manage infrastructure and common services, manage the variety of choices for consumers at the level of the brands and types of stores, attract and track footfalls, enable vouchers and coupons, even participate in revenue in some cases. But the retailers run their own show, manage their own inventory, customer experience, display, etc.

An online marketplace is essentially the same.

They need to focus on getting folks on to the site, ensure a wide variety of attractive  charge real estate and providing common services and infrastructure that help selling. Essentially – be a very valuable pipe and support system to sellers. Provide analytics.

Drive shopping festivals. But let the selling be led and driven by the retailers – very visibly. Right now the landing pages make the brand seem responsible for the selection and display of the products without any reference to the actual “store”. This obviously buttresses the image that the site/brand is responsible, and not just a conduit.

There might be more than one design solution that fixes it – and it’ll surely help set the expectation right upfront.

Offer Convenience. Variety. Safeguards. Transparency. Conflict Resolution. Not Price

As part of the baggage from their earlier avatars, and owing to the unsustainable price wars as e-commerce sites proliferated, “deals” have become the primary selling point and customer acquisition mechanism online.

Online shopping e commerce saleBut marketplaces need to worry about more than that! They’re not segmented enough – how site-1 differs from site-2 in terms of it’s positioning is not very clear. In the real world, some marketplaces are about value, some about a wide variety, yet others about premium offerings and some offer a good relaxed time with shopping as a by-product. Indeed, window shopping is a major activity, and a very key part of a shopper’s pre-purchase behaviour. By and large, these nuances do not exist in the online world.

Online marketplaces can build their brands around convenience – pick a particular set of user needs, personalize experiences and offer browsability options that let the user peek into various stores and options. Provide tools to stores to keep the consumer engaged over visits. Ensure transparency of vendor quality, reliability and reputation both for the products as well as for logistics very visibly and obviously. And manage disputes and conflicts as those arise. Collect feedback about various stores in terms of product quality and shopping experiences, and act on the feedback very visibly.

These might help consumers see the marketplace as a curator and enabler of good stores and services rather than a peddler of goods themselves.

Messaging. Marketing. Be Seen To Be On the Consumers’ Side!!

Snapdeal and Flipkart have been spending a fair bit of cash on advertising. Most of the messaging do nothing to change the belief in consumers that these sites sell directly to users rather than manage a bunch of sellers.

A lot more clear messaging about the marketplaceness of the sites will go a long way in helping dispel this notion. And if you’re essentially the infrastructure guys that help users pick a good product from the vendor who can provide the most reliable buying experience and also pick as an appropriate, dependable logistics option, you’re already seen to be batting for the consumer.

It’s not an easy change to alter one’s design and operational DNA, and even more challenging to ensure consistent quality and reliability from a large, assorted set of vendors. But over time, these e-commerce players will hopefully learn to improve not only theirs, but vendor-end processes much better and fix a lot of these growth pains.

What they right away do need is to understand very clearly is their role as a marketplace.

IRCTC Launches “Next Generation e-ticketing Journey Planner”

It appears that railway ticketing site IRCTC has revamped its journey planner to sport a different look and user experience. While it sounds fancy, this is not the complete overhaul which the government has promised.

The new look, being rolled out slowly to its 4 cr odd registered users, can throw some of the seasoned users off with the design. The key difference in the new IRCTC Journey Planner is in the second screen which appears after you key in your journey details and click “Find Trains.”

IRCTC is India’s largest online ticketing website. Earlier this month, a record number of 5.72 lakh tickets were booked online on the site. On an average, the site books nearly 4 lakh tickets. While presenting the railway budget this year, the Railway Minister had said that the department will overhaul the site to support 6x more users and 3x more tickets per minute.

The new screen looks something like this.

IRCTC New 1

The confusing part is the tiny “Book Now” button which appears in the next screen. It is easy to miss. We booked a Tatkal ticket this morning and the site appears to be slightly faster, but that could be just us.

Recently, the ticketing arm of Indian railways launched its e-commerce site in partnership with Yebhi.com last month.  IRCTC’s online shopping site powered by Yebhi is live at shop.irctc.co.in and sells clothing, accessories, home decor and electronics.

In July, e-commerce company Yebhi had won the deal from the Indian Railway Catering and Tourism Corporation (IRCTC), to provide a white labeled solution to enable e-commerce on their site.

Despite Fears of Competition, Few Online Retailers in India Bat for FDI in E-commerce

Online Buying ecommerceAs foreign online retailers like Amazon and eBay knock on the Indian government’s door to gain complete access to its $450 bn retail industry, a few domestic retailers are also working to pave way for the entry of foreign capital into the sector.

Homegrown online retailers such as Yebhi, Myntra and a few others have come out in support of foreign direct investment in online retail, which is currently banned in India.

“The way things are working, there is a possibility that we might see some major changes in a month or two,” Manmohan Agarwal, Founder & CEO, Yebhi.com told NextBigWhat. Agarwal is trying to persuade the government to allow FDI in e-commerce. ”It will open new scope for our retailers and will let the market mature,” says Agarwal.

According to recent reports, the Indian government is considering a move to allow FDI in online retail ahead of Prime Minister Manmohan Singh’s meeting with US President Barack Obama later this month.

Global retail giant Amazon has been talking to the Indian government to open the FDI in the sector, just like it allowed foreign investment last year for offline retail.

India allows 100% FDI in cash and carry, online marketplaces and single brand retail. Up to 51% foreign investment is allowed in multibrand physical retail. But when it comes to multi brand retailing in ecommerce and inventory led model, its completely prohibited.

Mukesh Bansal, CEO & Co-founder, Myntra told NextBigWhat, “We want the government to treat e-commerce companies as IT / ITES companies and base policies accordingly.” E-commerce companies and various industry bodies have been talking to the government on the benefits of FDI in the sector.

While people like Manmohan are leading the initiative of FDI in ecommerce and online retail with lot of small and big players supporting him, homegrown online retailers such as Flipkart, Jabong and Snapdeal aren’t too vocal about it. E-mails sent to them went unanswered.

“Players such as Amazon and Ebay will bring best practices which are very much required in taking online retailing in India to a next level,” added Bansal.

Pradeep Katyal, CEO, Utsav Fashion is also in favor of FDI in online retail. “Going multibrand and supporting more artisans, small entrepreneurs and vendors will generate more foreign exchange money, which is anyway going to help the country,” said Katyal.

Utsav Fashion is one of the largest aggregator and curator of Indian ethnic wear. It went online in 2003 and sells under its own private label. The company earned Rs 90 cr of forex last year as 90% of its sales come from overseas. “We all know that 10 years down the line, there will be FDI, no matter what. So why not allow it now?,” he asks.

For homegrown companies that have achieved certain scale, the coming of Amazon and deep pocketed e-commerce ventures might pose a threat.

Opposition party BJP, is also giving positive vibes to the industry over the FDI issue, said Agarwal.

A senior executive at an online retail firm said that the BJP might even promise to include FDI in e-commerce in their election manifesto. He did not wish to be named. The BJP has opposed foreign investment in multi brand retailing (pdf) right from the beginning.

Recently, Medianama reported that Arvind Gupta, the National Head of BJP’s IT Cell, has indicated strong support on allowing FDI in e-commerce.

He said, “More and more businesses want to operate out of India. FDI in e-commerce is a huge issue because companies are dying here.” According to our estimates, over a 100 e-commerce companies have shut shop in the last 18 months.

How do Flipkart & Others Operate?

Some of India’s largest etailers are using a dual company structure to comply with the laws. For instance, Flipkart has incorporated a new parent company in Singapore which owns the back end and wholesale B2B operations while its has sold its front end WS Retail to a group of investors led by former OnMobile Chief Operating Officer Rajiv Kuchhal.

Rocket Internet backed Jabong has a similar structure. It runs a B2B entity by the name of Jade eServices and a B2C entity by the name of Xerion.

Snapdeal is not an exception either. It runs its wholesale operations by the name of Jasper Infotech, a marketing firm, while its customer facing business is called Spinel Tradecom.

In short, major Indian online retailers have created a complex back end and front end structure which follows all FDI norms, but the reality behind the scenes is opaque.

Bidding For Indian Railways Scrap Goes Online With E-Auctions

The Internet has arrived and everyone seems to be taking to it, including the Indian Railways. The Indian Railways has moved over its existing system to a 100% e-auction based model for disposal of scrap.

Bidders won’t be needing physical presence or physical bidding process any more for the auction. The department hopes that this move will improve transparency and benefit the bidder.

Indian Railways disposes nearly Rs 3500 crore worth of scrap every year and until recently the disposal process involved public auctions requiring physical presence of the purchaser for the bidding.

The e-auction system, developed in-house by the Ministry of Railways, carries out the auctions over the Internet using digital certificate(DSC) for improved security of the process.

railways e-auction

Interested purchasers can participate in the e-auction by registering themselves at the Indian Railways E-Procurement System portal. Purchasers can make electronic payments through the portal for the bidding process. This also ensures that no cash is handled by the purchaser or the Railway’s cashier.


Read : And the largest e-commerce company in India is..?


The e-auction model also allows purchasers from any where to bid for the different lots on the system without any geographical limitations and also avoids the involvement of middlemen in the process.

Currently there are 1200 purchasers registered for the e-auction of scrap and scrap worth more than Rs 1000 crore have been disposed off by the department through the -auction system.

Very recently, Indian Railways launched an e-commerce portal in partnership with Yebhi.com.  The IRCTC online shopping portal, shop.irctc.co.in, retails in clothing, accessories, home decor and electronics.

Recommended Read:

25% of IRCTC Traffic is Going to New Shopping Portal: Yebhi CEO Manmohan Agarwal

IRCTC Launches Windows 8 App

Weekly Summary: redBus Exodus, Directi’s $110 Mn Sale & More

Not a week passes by without some excitement in the newsroom. This week we saw one more fairly large exit by an Indian company. Web company Directi sold a large stake in the company in a $110 million deal.  The Electronics Systems Design & Manufacturing received a major shot in the arm as the Indian government approved 2 proposals to setup fab units in the country.

We reported on the crisis at redBus after its acquisition. The company has lost at least a dozen senior employees & more are on their way out, apparently because they were unhappy with the ESOP scheme.

Some of our guest authors wrote deep thought pieces provoking reactions from a large number of readers. The analysis of Groupon’s Rs 9 for a Kilo of Onion campaign was a roaring hit. In short, a lot of water has flown under the bridge. In case you missed a few, here’s a recap of the best of the week.

Weekly Summary
Weekly Summary (image credit: Shutterstock)

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25% of IRCTC Traffic is Going to New Shopping Portal: Yebhi CEO Manmohan Agarwal

Yebhi IRCTCThe ticketing arm of Indian railways, IRCTC recently partnered with online retailer Yebhi, to diversify its revenue sources. Yebhi’s white labeled solution now runs a shopping portal for the railway ticketing site which clocks the highest number of online transactions in India. This partnership will reap benefits for Yebhi. As the online retailer’s CEO Manmohan Agarwal points out in this interview, 25% of the traffic from IRCTC is already going to the shopping site. Also Yebhi has access to the details of the users who transact once on the online retail portal. That’s a fairly large user base. Associating with a trusted government subsidiary, will further enhance trust factor in the mind of users which may remain even when the contract between the two ends. Clever play that one!

In this interview, Manmohan Agarwal, Co-Founder & CEO,Yebhi to goes into the details of the deal. Edited Excerpts.

Has Yebhi done any white label solutions before?

Yes, we have partnered with Citibank and Axis bank for over a year now.  Cash backs, coupons, reward points, EMI options etc features can be availed on Yebhi.com as part of the partnership.

What was the thought behind collaborating with IRCTC?

Undoubtedly, IRCTC is one of the largest e commerce players with over 2 crore registered users and approx. 4 lakh transactions daily. These users transact using debit and credit cards (No COD) and hence are accustomed to online buying. With such a niche set of users it makes all the sense to do online retailing and so the partnership.

But, will it conflict with Yebhi’s interests from a brand perspective? 

I don’t think so. For any industry to survive it is very important that there is competition. Also the large market size means more players can have their share with no one coming in the way of others. I am very optimistic and always think constructively when it comes to growing the market.

As a white labeled solutions provider, what aspects do you manage? 

We take care of the process end to end. Product sourcing, logistics, technology, inventory, marketing and other tasks of the venture are managed by us. IRCTC is helping in the promotion of their shopping portal at their end.

How you plan to promote the new online shopping destination to users?

That’s the best part.  We do not have to do much to acquire customers. We are promoting it through online ads, social media and general marketing techniques. But the differentiation is these users, as I mentioned earlier, are already comfortable in transacting online and already trust IRCTC brand.  IRCTC is already promoting at their ticketing portal, and once they start sending mailers and targeted advertising to their database it will be an easy job to pull these users and hence the customer acquisition cost will be very low as compared to other portals.

What has been the traction so far since the launch?

It has been a very less time since we went live, I cannot share the actual numbers as its too early to speculate anything. But almost 25% of the IRCTC traffic (irctc.co.in) is coming to the IRCTC’s shopping website, which is pretty good. We are happy so far with the progress.

How many brands and products does IRCTC’s E-commerce portal feature?

Currently, it has over 60,000 products and more than 600 brands. Also we plan to launch more categories which we may not do on Yebhi.

How does the revenue share model work?

It completely varies from category to category. It ranges from 1% at the minimum and goes up to 10%.

Do you have access to irctc.co.in, database, the 2 crore registered users?

No we do not have access to the main database. But once a customer transacts on the shopping portal his details are shared with us.

There is a separate login for the ecommerce portal even for the users who are members of Yebhi or IRCTC or both, why?

There were lot of complications at the back end, so we decided to keep it separate. If we had waited to resolve, it would have taken months to launch it. Though we are working on it and in future we may integrate it.

How you see this ecommerce venture shaping up in future?

As per my speculations in coming 1-2 years it will be one of the largest online shopping properties in India. We do not have to go here and there, if we just focus on the current registered user base of the online ticketing portal, the job will be much easier.

How is Yebhi.com doing? How many transactions are you clocking on a daily basis?

We are doing approx 7,000 transactions a day with an average ticket size of 1,600-1,800. We hope to be profitable in coming 1-2 years and are happy with our current speed.

Recommended Read

Analysis: IRCTC’s Ecommerce Service [Yee bhi?]

IRCTC Launches Windows 8 App

IRCTc LoginIndian Railway Catering and Tourism Corporation (IRCTC) has launched an app for Windows 8 today.

The app developed along with Microsoft, will provide users another channel to book tickets beyond the portal. IRCTC expects the number e-ticket bookings to increase with the introduction of this app.

You can download the app for you Windows 8 Phone from here. Yo will not be able to use the app between 8AM and 12PM to make bookings.

To use the app, you must first generate a TPIN by logging onto www.irctc.co.in. The TPIN will be generated for your registered phone number and the bookings should be made through the registered phone number.

IRCTC at an average is booking around 4 lakh tickets a day. But people have always faced connectivity issues and payment problems on the website.

Earlier this year during the Railway Budget the Minister of Railways, Pawan Kumar Bansal, had said that, by the end of this year, India’s railway ticketing website will undergo a major overhaul to support booking of 3 times more number of tickets per minute and 6 times more number of simultaneous users.

In June this year, a railway ticket booking system via sms, for people without internet was also introduced, which was earlier released on a pilot basis.

Recently IRCTC’s online shopping site powered by Yebhi went live at shop.irctc.co.in. The service retails in clothing, accessories, home decor and electronics.

Recommended Read

Five things IRCTC ticketing site must fix: A geek’s wishlist for IRCTC/Indian Railways

Indian Railways should arrive at Platform Number 1 [Of Org Structure, API, Data Platform]

Fun sake: Funny IRCTC Jokes

Forum Roundup: Distributing Equity with Co-founders & More

Last week we had some great discussions over at the NextBigWhat forum. Here’s a quick list of interesting topics from the forum.

nextbigwhat-forum

What is the best way to distribute equity with cofounder?

How can a original founder share equity with a cofounder who joins at a later date (may or may not bring in capital) taking responsibility of managing one of the functions of the business ie Marketing/Sales. I believe ESOP is one way to reserve the share with a vesting period of 3 to 5 years. Are there any other methods which could safeguard the interests of both cofounders (original as well as new).

First Order at Yebhi turns out to be a disaster

So My First Order at Yebhi turns out to be a complete disaster. It seems they have no intentions to ship my order. Anyone with Right Contacts in Yebhi who can help me resolve the issue??? The issue is with their own logistics dept ( Yebhi Express) if their Tracking is to be believed. ( I Now Doubt if they really have those products).

Olacabs to refund flight fares in case of a delay

Obviously moved by the entry of Uber in Bangalore, Olacabs has announced that it will refund  flight fares if a customer misses a flight. Olacabs says that it will give a refund of Rs 5,000 or the ticket fare, whichever is lower, if the cab reaches more than 10 minutes late. The refund will be done in the form of Ola Money.

Supercharge your startup, now.

Now inviting Indian innovators / entrepreneurs / startups, to participate in “The Next BIG Idea” contest. This initiative is backed by the Ontario International Marketing Centre (Government of Ontario, Canada), and run as a collaborative by the BSE Institute (a subsidiary of the Bombay Stock Exchange) and Ryerson University, Toronto.

Housing.co.in : A Quick Review

I was genuinely looking for a rental place and of course, wanted to give Housing a spin. Here is a quick feedback to the team.

Forum-housing

[High Alert] KooKoo.in ( Ozonetel ) – Payment Forgery Risk

The purpose of this thread is to convey a potential risk to KooKoo ( Ozonetel ) Team. There are in all 2 potential issues observed in KooKoo’s website ( at very first look ) – The one is related to the payment and the other is related to the user profile info.

Other discussions

How do I get my start up covered by start up media?

Mobile Internet users in India

Design Your Own Chocolate Bar at Happiness Bars

Shared space in Delhi/NCR/Noida

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Register at the forum and participate in discussions/help each other and grow the community!

Analysis: IRCTC’s Ecommerce Service [Yee bhi?]

The news about IRCTC launching an e-commerce site in partnership with Yebhi.com is hard to miss for anyone in India. Everything to do with IRCTC is big. With 2 crore registered users, they book more than 25 crore rail tickets per annum. In fact, they were the harbingers of internet penetration in India. Theirs was the first online transaction for scores of people in India. Naturally, there is a huge expectation about their “diversification” into selling goods online. But, I’ll wait to see how this plays out.IRCTC

I don’t think the user base can be taken for granted as a headstart. The savvy online shoppers who already have accounts with Flipkart and scores of other e-commerce sites are not captive to IRCTC-Yebhi and will go hunting for better prices. However, the real asset of IRCTC in this regard is the set of users uninitiated to buying anything other than train tickets online. If they had built something with this segment in mind, they might be onto something big. But, in this case they have merely put Yebhi’s inventory in front of IRCTC’s user base.

While Yebhi.com certainly benefits from access to this market, IRCTC is reduced to an affiliate. I do expect IRCTC to retain the right to bring in another player at the end of their current contract though. The typical thinking for them will be that during the next tender cycle, some other e-commerce player might bid higher. But, such a one-time auction might be limiting for either party. So, what’d have been better? We’ll see that in a bit.

In the meantime, like what any smart startup would do, Yebhi is trying to move the shoppers from this microsite to their own site using Google retargeting. Making hay while the sun shines! 🙂 See the conversation below on Twitter:

@nextbigwhat Yebhi is using IRCTC’s analytics to target Yebhi’s ads to user. I searched for shoes on IRCTC, getting ads for shoes on Yebhi!!

— Peeyush Jain (@peeyush2020) August 29, 2013

@oligoglot @nextbigwhat But isn’t it conflict of interest where IRCTC nd Yebhi r selling similr stuff nd Yebhi is maintaining both portals?

— Peeyush Jain (@peeyush2020) August 29, 2013

Coming to the title of this post, why this too (yee bhi?), IRCTC? For a lot of us, IRCTC is synonymous with Indian Railways. In reality, it is a (relatively) small subsidiary of Indian Railways set up in 1999 “to upgrade, professionalize and manage the catering and hospitality services at stations, on trains and other locations and to promote domestic and international tourism through development of budget hotels, special tour packages, information & commercial publicity and global reservation systems.”

Essentially, they were the outsourcing hub of any non-core activity of Indian Railways. Gradually they performed well with online ticketing too, and they might have gone in for even a public issue of shares but for some change in thinking at the political level. The internal sibling rivalry between the arms of Indian Railways also added to its woes.

(Source: IRCTC Annual Report, 2011-12)
(Source: IRCTC Annual Report, 2011-12)

The first casualty was the attractive catering business. The IRCTC Chairman has said:

“During the year 2011-12, the Corporation achieved a total income of 554.11 Crore, as compared to 764.93 Crore in 2010-11. Gross profit of 76.54 crore was achieved during the year 2011-12 as compared to 129.79 crore in the previous year 2010-2011. The total income and profits have declined with transfer of Licensee Catering segment to Railways. Except Catering, all other business segments of the Corporation have shown considerable growth.”

The response from IRCTC was to use its catering capacity to serve corporates. That set them off on the path of reducing reliance on the Railways. I speculate that their online ticketing pie too is threatened from within. One indication was the abortive attempt by the back-end of Railways’ IT infrastructure, CRIS (Central Railway Information Systems), to run a user-facing booking website.

IRCTC’s proposed strategy is “[o]f harnessing its extensive capability in the fields of hospitality, tourism, E-commerce and packaged drinking water and is gearing up to excel in its diversified role. As for future, the Corporation is poised to capture new opportunities in Railway and Non Railway Segment to sustain its high level of performance and at the same time shall continue to lay added emphasis on developing existing business lines.”

I agree with the drift they are taking. However, I would’ve preferred them take a pivotal meta role in the ecosystem. Something like becoming the de facto digital wallet of India. Given that 29% of ticket booking transactions fail at payment stage, bulk of their users would opt for their digital wallet. With their massive reach and the highest frequency of use compared to other e-commerce players, their digital wallet will be viable and can be floated as an option for all e-commerce sites.

Like I said elsewhere they might make digital wallets the new normal just like they made buying online normal in India. Another direction that they could have taken is to become a marketplace for all e-commerce players. That way, they don’t have to rely on one player. They still can take this direction after the current contract with Yebhi ends, but they will need to commit to this strategy and build this marketplace themselves. If they did, they would have moved away from the model of tenders fraught with delays and red tape to a new era of platforms. Will that happen?

Recommended Read: Five things IRCTC ticketing site must fix: A geek’s wishlist for IRCTC/Indian Railways

[About the author: BalaSundaraRaman (Sundar) is a co-founder of Ideophone, a solution provider for travellers and commuters. Besides being a rail fan, he has worked with various arms of Indian Railways from the divisional level up to the Railway Board in his efforts to launch a novel wakeup call service called Pyka, based on Ideophone’s technology. Write to him on sundar@ideophone.in or follow him @oligoglot on Twitter.]


1. IRCTC Company Profile
2. IRCTC Annual Report 2011-12

IRCTC’s Online Shopping Site Powered by Yebhi is Live

The ticketing arm of Indian railways has launched its e-commerce site in partnership with Yebhi.com.  IRCTC’s online shopping site powered by Yebhi is live at shop.irctc.co.in and is retailing clothing, accessories, home decor and electronics.

In July, e-commerce company Yebhi had won the deal from the Indian Railway Catering and Tourism Corporation (IRCTC), to provide a white labeled solution to enable e-commerce on their site. IRCTC Yebhi

The launch was spotted by the folks at Trak.

The online railway ticketing arm of Indian railways had floated a tender for the Rs 1000 cr project. E-commerce player Infibeam had also bid for the contract. In 2011, Infibeam partnered with Gujarat govt to enable their rural e-commerce initiative “Vishwagram Bazaar”.

The  e-commerce company will be responsible to build and manage the platform. Three months ago,  Yebhi raised $12 Mn in a bridge round, also pivoting to a marketplace model.

This is easily a big deal in the Indian e-commerce space. Simply because IRCTC has nearly 2 crore registered users, twice that of India’s largest online retailer Flipkart. The railway ticketing site is also promoting the new shopping portal on its main website (see image). IRCTC

Nearly 4 lakh tickets are booked on IRCTC which clocks over a million daily visits. We like how IRCTC is adding “additional revenue streams” to its business. But it should fix ticketing first. Wonder if the folks in the department have read:  Famous IRCTC Jokes?

Recommended Read

Startup Roundup: Price-Hunt, DailyObjects, healthee.in, Greenkins

Besides the startups we profiled in detail earlier, here are some that caught our attention. Compare prices on Price-Hunt before your next online purchase. The next time you want to buy a smartphone cover, give DailyObjects a visit. Healthee.in will help you add more to your healthy lifestyle. Visit Greenkins the next time you want to buy clothes for kids.

Price-Hunt

Price HuntOnline shopping is  slowly gaining momentum  in India and with an increasing number of people preferring to shop online from the convenience of their home or office, the future of the e-commerce industry looks good for now. With the increase of online shoppers comes the increased need for a good price comparison platform, that will help the gauge the best price availability across various e-commerce portals.

Price comparison portal Price-Hunt revolves around the idea of being a one stop search for all online shopping needs. The site claims to display real time price search across various popular online stores in India. The portal gathers results from various online shopping portals and provides the best deal available to the customer who can then be redirected to the shopping portal  with the offering.

Presently, the startup has products listed across online retailers like Amazon, Flipkart, IndiaTimes, Infibeam, Next, Homeshop18, Jabong, Myntra , Naaptol, Yebhi and Croma amongst others. It also has features like “Deal of the day” and “Offers & Coupons” to help users make their shopping experience easy and rewarding. Currently only online stores in India are covered, but in the future international  online sellers are also being planned to be covered.

DailyObjects

DailyobjectsOn most online stores available in India today, you’ll be spoilt for choice when it comes to buying a gadget, especially a smartphone. Getting an accessory for the same is a different story. You will mostly end up deciding between a few spurious or overpriced goods without any warranty.

DailyObjects is a portal focused on addressing this gap. It offers a selective but extensive range of genuine and reasonably priced accessories characterised by their design and quality. The portal enables you to discover and buy all available accessories for a gadget in one place. The service also offers information about the product’s compatibility and functions like build and features. DailyObjects tries to make their product available to people across India, and offers a range of accessories for iPhone5, iPad Mini, Samsung and HTC’s latest smartphones launched in India.

healthee.in

Healtheehealthee.in is an ecommerce startup catering to the needs of health & fitness community and offers fitness equipment and accessories, sporting goods and nutrition supplements through their online portal. the portal is angel funded by friends and family and has been running as an ebitda profitable venture. The company is on a mission to make healthier lifestyle & better choices easier for everyone.

the portal also has an online magazine, that covers topics ranging from health and fitness to supplements. The service provides free shipping and delivers with 3-7 working once the order is confirmed. The service also accepts Cash-On-Delivery as a payment method and orders can also be placed via phone. If you are a health conscious person, give the portal a visit, you might find something that might interest you.

Greenkins

GreenkinsGreenkins offers a select range of safe and eco-friendly products for children.The featured products include baby clothing, accessories and gifts in 100% organic cotton, non toxic and natural art supplies, eco friendly toys, recycled gifts and much more. The  company believes that being green is not about compromising on style quotient and so, the products are cool, contemporary and fun too.

The startup aims at being a credible and trusted resource for parents who are seeking to make responsible choices for their kids, by offering alternatives that are better for the kids and for the environment. They have partnered with Samhita Social Ventures, a leading CSR advisory, to launch a unique initiative called “making a difference” which encourages customer engagement. Customers can shop from a special range (m.a.d. specials) from which the portal will donate Rs 100 to one of the 3 causes that they may choose (empowerment of girl child, education of underprivileged children and tree plantation) or they may simply choose to make a donation of Rs 50 or Rs 100 to one of these causes or even do both (or neither).