e-Leap of faith

Written by Diksha Dutta | Diksha Dutta | Updated: Aug 27 2012, 07:14am hrs
It is never too late to fall for entrepreneurship. And the Indian e-commerce scenario epitomises this situation. Leaving a comfortable and cushy job in a big brand and starting your own company is not easy. Still quite a few have taken this step in the recent past, courtesy backing by venture capitalists to start ups in the e-commerce domain accompanied by the wisdom these entrepreneurs have earned in their past working experience. A look at the statistics: Over $250-300 million has been invested in e-commerce start-ups between 2008 and 2011. In the last seven years, $750 million worth investment has gone by PE and VC in e-commerce. However, the bigger question remains whether this is the right time to start an e-commerce company in India Or is the place too cluttered To get a perspective of both sides, we talk to three entrepreneurs who left their job and started an e-commerce company.

Founder : Sandeep Aggarwal

Venture started : Shopclues.com in 2012

Prior to entrepreneurship : 16 years work experience

Last job: Internet analyst at Silicon valley

Sandeep is an analyst turned entrepreneur and weighs what he does. He recalls his life as an employee, I used to earn $1 million a year as compensation and had an intellectually satisfying job. So, coming back to India from silicon valley and starting on my own was not an easy step. But as an analyst who had studied the internet business closely in various geographies, he knew what will work and what will not work.

So what triggered the business idea Tells Sandeep, Two years back, MakeMyTrip was getting listed in NASDAQ and I decided to cover it in an analyst report. The real action in e-commerce began 2-3 years ago in India and globally it began 15-17 years ago. In India, e-commerce is here to stay. But most of the companies here in India are inventory based and globally this model has not worked.

Shopclues sells in 250 different categories and has 2500 sellers on its website. The idea is to be like a mall and sell everything. Our benefits are that we have a great selection and a large catalog . We do not have any inventory risk and are less dependent on capital. There is a healthy competition among pricing as well, explains Sandeep. But the company indisputably faces a lot of competition from established players like Snapdeal, Flipkart and Myntra.

However, Agarwal is clear about the scope in e-commerce, In the US, 6.5% of the retail is e-commerce, and it is only 0.1 % in India. So one can imagine the potential players like us have ahead, his eyes sparkle.

Founder : Sridhar Seshadri

Venture started : Hushbabies.com in Jan 2012

Prior to entrepreneurship : 16 years work experience

Last job: Head, online sales and operations, Google India

Nothing is sacrosanct in a young company, feels Seshadri. He loves the fact that his baby, Hushbabies.com is faster in speed, encourages crazy ideas and takes nothing for granted unlike a big company. In his experience of more than 16 years in large companies like ICICI Bank and Google, across various senior leadership positions he experienced an environment where everything happens on tested grounds and ideas take time to be implemented.

Early this year, his baby happened to him which he feels is the result of an encounter he had with IndoUS Venture Partners last year. I always wanted to do something of my own and my frequency matched very well with the investors then. I had worked with Google from 2007 to 2011 and had seen consumers going online in a big way, he says. Seshadri realised the potential in digital domain and then there was no looking back.

Hushbabies.com is a one-stop online shopping source for parents and parents-to-be and Seshadri feels that the new parents are technology savvy and this market is very capital efficient. From January to November this year, the company has grown 15% month-on-month and does about 1000 orders a day. It faces online competition from firstcry.com and offline competition from famous retail store Mom& Me.The challenge remains to educate parents on innovative products which are used for childproofing in homes.

Do you also need parents in your team to educate parents He laughs and says, So when we are strategising, I make sure that the team is full of parents. Half of the employees in the organisation are parents. The total headcount is 100.

Probed whether this is the right time for anybody to start an e-commerce company, even though the place is cluttered, he replies, It is never too late. Investors always follow great ideas. You need to decide what problem you can solve through your business idea. It should be a problem which you can solve better than other players in the market.

Founder : Manmohan Agarwal

Venture started : Yebhi.com in 2009

Prior to entrepreneurship : 20 years work experience

Last job: CEO at Vishal Retail

If Seshadri had expertise in dealing with online businesses, Manmohan started Yebhi.com after rich experience in the retail sector. It was a tough call both mentally and emotionally to leave a job and start Yebhi.com, but I always wanted to be my own master. I chose e-commerce because I am from a retail background and I realised the opportunity in online retail back in 2009, he says. He has also worked with names like Onicra Credit Rating Agency of India Limited as the COO and as an Operations Controller at Xerox Modicorp.

Manmohan claims that when he entered this space, e-commerce was not actually happening in India. But the story is different now, We started with selling shoes, and now we have diversified into many areas. This was preplanned. We have already had three rounds of funding and experienced a handsome growth for the last two years, he informs.

Bigshoebazaar, now re-branded Yebhi.com has expanded its catalogue extensively to offer a vast range of shoes, apparels, lifestyle, electronics, home furnishing, jewellery etc. Yebhi.com has received Rs 150 crore in three rounds of funding and continues to grow in product offering.

Unlike his own case, Manmohan is not very sure if this is the right time for anybody else to initiate a start up in the e-commerce space at present.It is too late for anybody to start an e-commerce company in India today. People will have to do much more hardwork now to make a mark. Though they will have a clearer path, but will have an undecided future. For me, the e-commerce space only comprises top five companies- Snapdeal, Myntra, Flipkart, Yebhi and Fashion & You, he says.

But one thing is clear with Manmohan, I do not want to be the Amazon of India, I want to be the Yebhi of India. This means that he is focusing on a business model which handles 100% inventory and the delivery time is quicker.