Nearbuy CEO Ankur Warikoo spoke to FE's Avanish Tiwary & Sunny Sen on the changes and the coupon business in India.
Global deal discovery e-commerce marketplace – Groupon entered India in 2011 but four years hence the parent company has ceded control of the country’s operations to external investors and promoters. Following this change, the company has been rebranded as Nearbuy with Sequoia Capital infusing Rs 100 crore into the business, though the legal entity will remain as Groupon India.. Nearbuy CEO Ankur Warikoo spoke to FE’s Avanish Tiwary & Sunny Sen on the changes and the coupon business in India. He said that Nearbuy will need multiple rounds of funding to reach its true potential in India. Excerpts:
What was the need for this change?
There were two things that played important role in this. Groupon India continues to be one of the strongest companies of Groupon among the 40 countries that it is present in. We were seeing 100 % growth year on year, but it was not optimal was on the technology front. The India team had no control on the technology. The product that the consumer and merchants experience was made globally and sent to other countries, without any country specific personalisation. The product was not responsive or interactively best suitable for the local Indian environment and user behaviour.
Secondly, the opportunity the Groupon saw in India was massive. But to build on that opportunity we needed investment and Groupon being a listed company had restrictions on how it could invest in different markets. While Groupon has $1.2 billion in cash reserve it is still restricted because of its nature to freely invest in the Indian market. The settlement or the end result is the best of all worlds, where Groupon global continues to enjoy the upside of being in India as a shareholder. We have investors who have brought fresh capital and now the management team has become the founding team, who has full control of the product.
To build a billion dollar business you need a lot more funds. Groupon would have had to be invested into the company for a much longer period of time and even bear loses.
How much of funding do you need to reach your true potential?
We don’t know how much we exactly need — it can be as low as $50 million or as high as $300 million.
Will it be different in its offerings or services?
We are going to build on what we already have. Since the transaction was done we were present in 21 cities in India in about 6 categories. We are going to expand this reach to 35 cities by the end of this year and we would expand to 18 categories.
How do you see the coupon business in India?
All of us buy offline, even though online shopping is on rise. So, offline shopping is not going to die in the future. And mobile devices have become great way of discovering offline deals and products. There has to be a business that connects the two, and that is why deals will never sizzle down. However, we don’t call ourselves a deal site at all. I would argue, the biggest deal site is Flipkart, as I don’t remember the last time I bought anything from there without any deal. (laughs)
Who are your competitors?
I don’t want to sound boastful, but honestly, I don’t see any real competition in the market.
Not even Mydala or Coupon Dunia?
This is the way I qualify something as competition. If my merchant tell me there is someone else too who wants to drive the customer and they are as good as you, then that becomes a competition for me. But with all due respect, I have never heard of these from my vendors.
Do you also plan to partner with telcos for payment process?
Not the telcos, but we are definitely looking at partnering with payment gateways. The peril of working with telcos is more than 93% of all mobile being prepaid, the cash balance not being high enough, we don’t think it will become a big payment way in the near future.