Times Internet, the digital company of Bennett Coleman & Co (BCCL), is gearing up to re-launch its e-commerce site, indiatimes shopping in a brand new avaatar. However, unlike the last time the new e-commerce site will be a vertical one largely selling gadgets and other electronics items. At the same time, the company has transformed its start-up accelerator TLabs into a full-fledged investment division. It has also brought down the curtain on its video OTT app Box TV, after launching it with much fanfare. Gautam Sinha, CEO Times Internet, spoke to FE’s Anushree Bhattacharyya, where he detailed about the company’s e-commerce plans besides how it will build its business in the US post the acquisition of cricket broadcaster, Willow TV. Excerpts:
What went wrong with indiatimes shopping?
When we started e-commerce under indiatimes shopping in 2000, there were only two large companies – eBay and Amazon when it came to following the business model. At the time we decided to follow the eBay model – that is the marketplace model. However, the shopping experience was not being well managed. Merchants were not very mature. Moreover, payment mechanism and logistics were weak. Yet we decided to better the experience, by taking more control in terms of quality of products, fulfillment, etc. Between 2010-11, we pushed really hard and invested in companies like Delhivery. We pushed to a certain level knowing that the business will lose money for the next couple of years. Back then that is 2011-2012, competition was largely Flipkart. While we posted gross merchandise value (GMV) of R30 crore per month, Snapdeal was at R50 crore and Flipkart was R70 crore. We thought if were able to get our act together we may be able to compete against the rest. But we faced certain difficulties with the brand as it had already taken a beating. And then came Amazon in 2012. We reviewed the businesses again. While we felt it was a good business to be present in, it would atleast required $2-3 billion of investment. And even after spending that much there was no guarantee that we would win the battle. So we stopped further investment in 2012 and pulled back from the business.
Are there any plans to re-enter the business of e-commerce?
Our ambition in e-commerce still remains but we want to approach from areas where we have an edge over others. The idea is to enter only one or two verticals such as electronics including gadgets with limited number of stock keeping units (skus) – largely to deliver a white glove service. We will leverage the media presence we have. If some one wants to launch a product online will come to us, we already have the largest presence across media. We will launch the new site probably within a month.
Has the role of TLabs – the start-up accelerator of TIL become similar to that of Brand Capital – the ad-for-equity investment arm of BCCL?
Yes, Tlabs has now transformed into an investment arm of Times Internet which continuously looks at various sector where we can invest. The only difference is that the deal takes place in cash unlike Brand Capital which is an ad-for-equity investment division. Till 2011, TIL only invested R10 lakh at a very initial stage in start-ups, then the investment increased to R30 lakh and now TLabs has started investing in all rounds. For example in case of Delhivery we participated in all rounds. This year we will invest in 5-10 start-ups in the space of fintech, health tech and edu-tech.
You have also shut down Box TV – your video streaming app, at a time when viewers have taken to the online world watch content. Isn’t the timing wrong?
The unit economics were such that it did not allow us to earn money. While we have preserved the technology, we have moved out of the business. Video is important. However OTT players currently have no control on cost of content, be it original or acquired. Also cost of customer acquisition is very high. With only two ways to monetise — advertising and subscription, with the latter yet to find enough number of takers, it is difficult to get return-on-investments.