Ecommerce Business and Investments

The finance ministry is examining a proposal to permit unlisted Indian companies to raise money from overseas stock exchanges. The move would help companies in new-age segments like e-commerce and bio-pharma as well as some long-gestation infrastructure projects — which do not have much investor appetite locally — raise funds at attractive valuations abroad, analysts said.
Indian regulators currently allow only listed firms to tap foreign stock markets, since they have control over such companies. While industry chambers and many corporates favour the move as it will help raise foreign capital, some experts and local stock exchanges are opposed to the proposal, which they feel affects development of local stock markets.
“A presentation (on the proposal) was recently made to economic affairs secretary Arvind Mayaram. The government and Sebi are studying the proposal,” an official familiar with the matter said. “If concerns of money laundering and round-tripping are taken care of, there should not be much of a problem in permitting unlisted firms to raise money in the overseas equity market. But the issue needs to be examined in detail,” he added.
Unlisted Indian companies were permitted to list overseas in the 1990s but this was changed in 2005. Sebi and the RBI have since endorsed this position barring unlisted firms from floating evening American depository receipts (ADRs) or global depository receipts (GDRs).
However, some unlisted companies have worked around this by creating overseas subsidiaries. MakeMyTrip.com — which is not listed in India — listed on the Nasdaq last year with a valuation of $1 billion. It first created a local subsidiary with a holding company in Mauritius. The subsidiary, in turn, raised funds from the US market.
But such corporate structuring becomes difficult and expensive for smaller companies.
According to PricewaterhouseCoopers, China was the world’s largest IPO market in 2011, with companies raising around 286 billion yuan. Despite stringent overseas listing norms, around 40 Chinese companies listed on Nasdaq last year. In comparison, only one Indian company, MakeMyTrip.com, got listed on Nasdaq in 2011. Indian firms including Sify and Rediff.com listed abroad earlier, but are not listed in India.
“Our market typically prefers stable and traditional IPOs whereas new-age segments like e-commerce and bio-pharma have very long gestation periods to attain profitability. Hence, it becomes difficult to get the right valuation in the Indian market. Exchanges like Nasdaq are much more mature in valuing such companies,” said an analyst.
Srei Infrastructure Finance CMD Hemant Kanoria said unlisted firms should be permitted to list abroad, especially since it would not have any adverse affect on Indian investors. There are in-built checks and balances, since such overseas listings always run the risk of failing, he said.
However, Prithvi Haldea, managing director at Prime Database and an expert in capital markets, is firmly opposed to the proposal. This would mean Sebi does not have any control over Indian unlisted companies dealing with overseas public money, he said. According to Haldea, the provision is prone to misuse and Indian regulators will not have any control if any wrongdoing comes to light. Sebi recently barred seven companies from issuing any shares or convertible instruments or alter their capital structure in any manner till further directions, after it detected evidence of manipulation in GDR issues.
When unlisted Indian companies have multiple avenues to raise foreign funding including FDI, private equity, venture capital and qualified foreign investment, why should they go abroad, Haldea wondered.
Another capital market expert, who did not want to be named, said only some specific sectors, which do not have investor appetite in India but are received well abroad, should be given such a permission. “A blanket approval to unlisted companies across-the-board would ensure the closure of BSE and NSE,” he said.

With 400 stores, Digiworld, the retail initiative from the Videocon Group, has a pan-India presence. It now plans to increase the number of stores to 1000 by the end of 2013 with a special focus on tier II and tier III markets. In an interview with FE’s Twishy, Jaideep Rathore, chief operating officer, Digiworld, speaks about the sales trends in rural markets, Digiworld’s new brand identity and the threat from e-commerce sites. Edited excerpts.

Can you explain how the Digiworld business model works?
The franchisees directly deal with the individual brands. Representatives from these brands frequently visit the stores and analyse the trends. A franchisee gets everything that it needs at the store level, thus helping it push sales. In terms of after-sales service, all these franchisees are again linked to the brands.

What is the strategy that you have adopted for rural markets?
We are present in B-class towns but this year we want to expand to the C-class towns aggressively. The stores are similar to the ones found in urban areas, and tier II and tier III cities account for 65% of our business. The big cities don’t witness exponential growth in the middle range of products but there is high margin in the C-class towns because there is hardly any competition in these markets. The major challenge is to provide logistics support. We have connected all the brands directly to the franchisees so that they have 24/7 access to the actual brands, which is an experiment done for the first time in the retail market.

What was the idea behind reintroducing Digiworld under a new name DW?
The new brand identity is in tune with the brand’s growth, thus giving it a progressive, dynamic and contemporary look. The logo is the abbreviated form of Digiworld (DW) in orange, red and blue to specify the three product divisions of the brand, namely, consumer electronics, home appliances and mobile phone. The tagline is now ‘Digitally WOW’. The essence of this new brand positioning is friendlier and happier communication with consumers.

What are the hot selling products at DigiWorld?
We have all the group brands such as Videocon, Kelvinator, Kenstar and Sansui. We are doing well in the electronics category with home theatres and DVD players selling very well. In the appliances category, the top-selling item is air-conditioners followed by washing machines and refrigerators. We are the largest sellers of iPhones and Samsung Galaxy smartphones. In tier II and III cities, mobile phones are doing well followed by sub-32-inch LCDs. Sub-300 litre refrigerators and washing machines up to 6.5-7 kg capacity are selling well.

What is DigiWorld’s target for this fiscal?
Within the organised business in some of the categories, we have a share of more than 20%. We have more than 400 stores and our turnover last year was Rs 700 crore and we are aiming at Rs 1200 crore this year. By the end of 2013, we plan to have 1,000 stores.

Do you see small stores going out of business after a period of time?
Yes, they will. Sooner or later, foreign direct investment (FDI) will come in and only organised retail will stay. However, these pop-and-mom stores will not shut down but they will have difficulty in managing themselves and competing with organised retail. They may get amalgamated into some kind of association with the retail giants. It is a big possibility and there is always an opportunity for them to become a DigiWorld franchisee.

Do you see e-commerce sites as a threat?
E-commerce is growing but Indians are not comfortable buying off the online rack as they want to have a feel of the product and then buy it unlike that of people in the West. India will take another five to six years to adapt to the e-commerce model but it is a very important part of the retail industry. We have our own e-commerce model, but we are limiting ourselves to technology products only as that business will take time to shape up as it is still a developing one.

Implementation of FDI in multi-brand retail will be a welcome step as it would provide much-needed capital for the sector, Future Group founder and chief executive officer Kishore Biyani has said.
“Modern retail is very expensive business. You have to build up the entire distribution, you have to build up the entire supply chain, you have to build retail stores. Today for us the access to capital to build our business is a scarcity. You need capital. We need capital in some form or the other. If FDI comes in, then it is a welcome step. You will drive consumption and ultimately consumption will drive growth,” he said here.
“FDI is a subject that we talk about too much in this country. India is the only country where we use the word multi-brand retail. Nowhere in the world we understand this terminology.”
“If there are challenges in opening up super market or food sector in retail, there are other sectors which can be opened up. Ultimately, India never had that kind of capital to grow or change an ecosystem,” he said.
The Central government had last year allowed 51 per cent FDI in multi-brand retail, but the same could not be implemented in the face of strong opposition from UPA allies, including Trinamool Congress, and several state governments.
Biyani further said the Goods and Services Tax (GST), when implemented, will also be a major game changer for the industry. Today small retailers have bigger advantage as the tax they pay is different.
“I think GST can be a game changer for us as a physical retailer also. It is a big game changer,” he said.
On the e-commerce industry in the country, Biyani said, “E-commerce is doing well in the US because it is a very consumption-driven economy. We are learning to consume value-added products in this country. There are challenges in e-commerce like cost of delivery, cost of technology, among others. We are still 3-4 years away from this business taking off in a significant and profitable manner.”
“I think for e-commerce to supply to 15,000 pin codes, we need to create infrastructure, products and demand. We are making efforts, but the major products which are selling are low-margin ones, in which you can’t get money like electronics or mobile phones.
“We need to get more value-added products, where there is enough margin so that you can sustain the delivery cost,” Biyani said.
Biyani admitted mistakes in his ventures and added that new entrepreneurs need mentors to guide them in not committing those mistakes.
“Entrepreneurs need mentors who can help them, who can tell them what you should not do rather than telling them what to do. Being an entrepreneur myself, I know I have made all the mistakes... We have created many entrepreneurs. My attempt with future ventures didn’t do well. My public issue didn’t do well. My shares are still languishing. The companies in which I invested are doing fantastic,” Future Group CEO said.

Whether you are looking to buy a power tool or neon jeans online, chances are you start your search on Google or Amazon.com. But which one?
Behind the scenes, the two companies are waging a war to become the pre-eminent online mall. And e-commerce sites large and small are caught in the cross-fire. As for consumers, the question is whether they will see a full range of products available online.
Google is a search engine, not a store, but it is increasingly inching into e-commerce with products like its comparison-shopping service, Google Shopping. At the same time, more people are using Amazon, a retailer, as a search engine to look for what they want to buy.
Trying to stave off the competition from Amazon, Google has recently changed Google Shopping to require e-commerce companies to pay to be included in shopping results, so product listings are now ads. Inclusion used to be free.
Google says the change will improve its shopping results because retailers are more likely to list accurate and up-to-date items if they are paying. It says the service had become polluted with product listings that were out of date or misled consumers about things like shipping prices.
By requiring retailers to pay for listings, “incentives are aligned to make sure the data we’re receiving is of a higher quality,” said Sameer Samat, vice president for product management for Google Shopping, which used to be called Google Product Search and, before that, Froogle. “With better data, we can build a better experience for users.”
Although some retailers agree, and say the move could even help their sales, others are panicking. Some say they will not pay for listings or will include fewer products, which could shrink the selection shoppers see on Google.
The move is a way for Google to make more money from retailers, some of its most lucrative advertisers, but it also needs to improve product listings to keep valuable customers from going to Amazon.
“Google and Amazon both have the same end goal, to be the destination that people go to to do their product searches, and Amazon’s winning that battle,” said Michael Griffin, founder and chief technology officer of Adlucent, which does search marketing for online retailers and formerly managed Amazon’s paid search.
The shift to paid listings on Google Shopping began this summer and will be complete this fall. It is part of Google’s expanding e-commerce playbook, which also includes Wallet for payments, Offers for daily deals and the Google Shopper mobile app for finding items nearby.

For Mukesh Bansal (36), founder and CEO of Myntra.com, becoming an entrepreneur was not an accident. Since his early days in IIT-Kanpur, Bansal was clear that he wanted to start his own venture. Having worked with four Silicon valley start-ups in the e-commerce and software space, he picked up the nuances of running a successful business going way back to 1999. Backed by a funding of $70 million from leading global investors, the online fashion retailer is aiming for an IPO in the US market in the next two years. In conversation with Darlington Jose Hector and Debojyoti Ghosh, Bansal talks about his plans for the company and how his start-up is reaching out to the aspirational consumer of middle India and taking the e-commerce phenomenon to smaller cities.
In any sunrise industry, if there is a credible opportunity, a lot of people tend to come in. There is a gold rush kind of mentality. Too many players are crowding the market today but you can see this in two ways. On the one hand, this validates the credibility of the opportunity. On the other hand, not all of the players are likely to get funded. To achieve scale, you need to get the right team, investors and application of the right technology. Already there is some consolidation happening. Some companies have started to fold up. Over the next 3-4 years, 1-2 very big horizontal players will emerge, vertically there will be 2-3 players dominating the show. They will have 80-85% of the market between them.
What kind of players will survive?
E-commerce is mostly about execution and requires a lot of funding. Subsequent rounds of investments will only go to people who are number 1-2 in their categories. For numbers 3, 4 and 5, it will be very difficult to find investors. Small players won’t be able to compete with the larger ones. They will have to settle for being a small player, growing organically and trying to get to profitability. Or they will have to sell out to a larger player. Or shut shop. I’m sure we will see all three cases happening, depending on the entrepreneurs’ mindset.
How big is the addressable e-commerce market in the country? What is the growth rate?
Overall, the off-line fashion and lifestyle market in India is about $50 billion (around R2.5 lakh crore). Of the overall market, online constitutes a very small portion, which is estimated to be about R2,000-2,500 crore currently. We see the online fashion segment growing 100% yoy. In the next 4-5 years we see the market touching R15,000-20,000 crore. Wherever e-commerce has grown, growth has been more than 100% yoy. In China, for instance, growth has been more than 100% yoy over the last 5 years.
People say that the cash-on-delivery model is not sustainable over a period of time. But it is also one of the key drivers of the e-commerce business in India.
Cash-on-delivery is a huge part of Indian e-commerce. It offers a comfort factor. I feel the cash-on-delivery model is here to stay. E-commerce companies have to make this model more efficient and cost effective. To make this model more efficient, we have invested heavily in logistics, so that we are able to offer a better cash-on-delivery experience. We now get cash on the same day and not in 2-3 days. Currently our cash-on-delivery return rates are 5-6% and if we can bring this down to 3-4%, that will be very healthy.
What do you think will enable you to continue to be in the forefront of this sector?
Today our size is our strength. We had multiple rounds of investments and have raised about $70 million in funding so far. After Flipkart, we are the second-best-funded company in the space and the second-largest. We have a very strong team in place at both the management and the mid-management levels. The brand is fairly well established, as people know Myntra and what it stands for. We have invested heavily in a number of areas like call centres, supply chains and product experience. We have built a very strong technology team. Myntra has about 60 engineers; most of them are IIT graduates and from leading product companies like Google, Yahoo and Amazon. Barring 2-3 e-commerce companies, not many are investing in technology. I think a lot of the players aren’t approaching technology in the right way.
We are seeing a lot of e-commerce players enter the high-margin apparel space. How is Myntra handling the online apparel business, which is your core business?
Apparel as a category offers about 30-40% margin depending on the brand and price point. It is one of the higher margin categories. There is a lot of interest among start-ups in the fashion and lifestyle business, to enter the apparel space. Even other horizontal players are getting into this. The market for apparel is very big and overall it is a very healthy business model compared to other categories in the e-commerce business. We are doing close to 8,000 transactions per day in the apparel segment. And this segment has been growing steadily month on month. On an average, we are growing 50% every quarter. For us, apparel is half of our business, and the rest includes footwear and accessories. I feel other players may not be able to do justice in retailing fashion, as the market is already crowded.
You were into apparel, accessories and shoes, but recently you have forayed into cosmetics. Are you looking at expanding into newer segments?
Our overall focus is fashion and everything that people use and need in order to look good, which basically covers apparel, footwear, jewellery, accessories and cosmetics. We will never get into categories like books, electronics and toys. Myntra is only focused on fashion and lifestyle. We will continue to expand our existing segments and keep adding more brands. We are now focused on bringing some international brands, which are not available in India. The cosmetics category was recently launched and we are already doing 300 transactions per day.
Which are the global brands you are looking to tie up with?
I’m hopeful of launching at least 4-5 new brands this year. These brands will be mostly from the US. However, like Fabindia and New Balance, we are not looking at any exclusive tie-ups right now as most brands are reluctant. We are positioned as a current-season full price player and do very little discounting other than with the end-of-season sale. Brands certainly feel very good about that. Myntra deals with brands directly and this has helped establish strong relationships with the brands. They give us a preview of the latest collections before going into the market. Recently, Puma did an exclusive launch with us 4 weeks before it introduced the same collection in their own stores.
How do you see businesses in the tier II and III markets where penetration is still low?
About 50% of our sales come from outside the top 10 cities, from around 400 cities. We reach out to these markets through TV campaigns. We have also done targeted campaigns in cities like Lucknow, Pune and Chandigarh, through billboards and local newspapers. Facebook has a huge penetration in tier II and III cities, and we have utilised this platform to reach out to young consumers. The cash-on-delivery model helps. And the aspiration for brands is very high as people are willing to spend money to buy branded fashion items.
How did you hit upon this idea of online fashion retailing?
I was in the US for 10 years. I have worked with four different start-ups in the Silicon Valley. I’m from IIT-Kanpur. After IIT, I worked with Deloitte for two years and then moved to the US. I was very clear that I wanted to work with start-ups. I had this idea of starting something of my own. In 2006-07 this ‘personalisation’ business (personalising coffee cups, t-shirts etc) was getting very big in the US. The initial inspiration for Myntra came from there. But I realised that was a very niche category for India and too ahead of its time. That’s when we decided to move to fashion and lifestyle.
Now, we aspire to have an IPO, hopefully in the next 2-2.5 years. It is important for investors to get an exit. An IPO also gives you a reasonable amount of funds for future growth. It is a good thing for all the stakeholders. We are looking for a listing in the US. Meanwhile, we are very well funded for the next two years.

Snapdeal expects the recently launched 'brand stores' concept, which allows retailers to create their own store on the e-commerce major's website, to contribute 50 per cent to its sales in the next 12 months.
The company that has set a target of Rs 600 crore revenue in the current fiscal is also bullish on mobile commerce and expects nearly half of the purchases on its site to be
executed through the mobile platform in the next two years, an official said.
"With brand stores, Snapdeal aims to be an enabler for the many local/offline retailers to reach out to the growing online shopping population.
"Brands will be able to decide the look and feel of their page, customise product selection, manage promotions and exclusive launches," Snapdeal.com Founder and CEO Kunal Bahl said.
While the brands will be able to sign up for free, Bahl added there would be a revenue-share model based on the products sold.
At present, Snapdeal has about 3,000 odd stores operating through 'brand stores'. The company is in talk with about 2,000 more brands who "should be onbroard soon".
"We plans to have 10,000 brand stores in the next 12months," he said.
Snapdeal sees a lot of opportunity in 'brand stores' and will continue to build on the concept and offer further innovations in it, Bahl added.
He said, "Many brands, even the larger ones, do not have an e-commerce site. Some do not have the expertise to handle the back-end operations, such as logistics and payment. We will also help drive traffic to the sites."
The company is also bullish about mobile commerce.
Bahl said, "20 per cent of our traffic comes from mobiles -- both the application and the mobile site. We believe mobile commerce will account for about 50 per cent of total sales in the next two years."

Think of online shopping, and eBay would be one of the top names that pops up. The world’s renowned online marketplace came to India in 2005 after acquiring Bazee.com. This was a time when there were hardly any e-commerce players in the country and the potential of this space was still to be realised. Though the categories eBay offers now in India have not increased substantially since then, Abhimanyu Lal, head, category management at eBay feels that the depth of these categories in terms of various products has definitely increased. More importantly, the e-commerce company knows from where the growth is coming in the country and where the future potential lies — non metros, mobile commerce and sale of gadgets.
Says Lal, “India is a very dynamic market in gadgets and consumer electronics. The major trend that we are seeing is uptake in the sale of mobile phone category. Since everybody is moving towards smartphones globally, even India is catching up. Phone is no longer a luxury in India, it is an absolutely essential category. It is an individual device and these days every house has two to three phones.” On an average day on eBay India, a mobile handset sells every three minutes. This is higher as compared to a laptop that sells every nine minutes, a digital camera that sells every 19 minutes and a TV sells every 54 minutes.
Even for players like Flipkart and Snapdeal, gadgets and consumer electronics is a sweet spot. Kashyap Vadapalli, chief marketing officer, eBay India, says, “Gadgets have always been very popular on eBay India. With our extensive range of gadgets across brands, models and budgets which enable our consumers to get easy access to the best deals and widest selection online, we see a great demand coming from consumers across metros, tier II and tier III cities. Interestingly, non metro consumers are actually shopping for more gadgets than metro consumers.”
In the April-June quarter of this year, eBay saw phenomenal growth from non metros, reason being easy accessibility of products to consumers, through online shopping. During the same quarter, non-metros such as Thiruvananthapuram, Coimbatore, Kochi, Ghaziabad, Surat, Vadodara, Faridabad and Madurai were amongst the top 20 gadget cities. As much as 52% of transactions came from non-metros, which includes all cities except the top eight metros.
Lal feels that mobile commerce will uptake in a big way in India. “Mobile phones have 700 million users and Internet has only 100 million users in india. So you can imagine the potential in mobile e-commerce. For the same, we have come up with various apps which makes mobile shopping easier,” he says.
Competition from India
Asked whether eBay finds the Indian e-commerce market too cluttered with a plethora of ecommerce players in the country? Lal has an optimistic view, “I believe that competition is a great thing. It is helping in building an e-commerce ecosystem in India and is creating awareness among consumers to buy online. Other players are helping in expanding the message of e-commerce.” The top five competitors for eBay are Flipkart, Snapdeal, Myntra, Yebhi and Fashion & You.
Globally, eBay was founded in 1995 and definitely has a better experience of functioning in different geographies as compared to other newer players. Lal believes that there is no better time to enter the e-commerce market in India, and that is what start-ups should do. But he confesses, “The market readiness is definitely there for start ups and new companies, but I am not sure about the perspective of VC funding for the future.”
eBay does not hold inventory and that is the business model which has worked for the company globally. After all even in India it offers 6 million items in 2000 categories. Thus, a marketplace model (no inventory hold) helps in saving cost and earning better margins. “The benefits of not holding inventory are that one can sell anything from anywhere,” says Lal. He also feels that this can be a good cost saving method for start ups.
Broadly, there are already 15-20 million people who buy products online, amongst the 100 million internet users. So whether is it an established brand like eBay or a start up—there is scope for all!

The upcoming festive season is likely to push the sales of e-commerce portals by about 140 per cent, industry body Assocham has said.
During key festivals like Karva Chauth, Dhanteras, Diwali, online shopping portals will see a growth of 135-140 per cent, Assocham Secretary General D S Rawat said in a statement.
Articles like electronic items, idols of gods and goddesses, sweets, clothes and jewellery are likely to be in huge demand mainly due to discounts which range from 10-15 per cent to 80-90 per cent.
According to a recent study by Forrester and Assocham, the e-commerce revenues in India will increase from USD 1.6 billion in 2012 to USD 8.8 billion in 2016.
The industry body further stated that factors such as home delivery, and '24x7' shopping are pushing the growth of e-commerce in India.
"The online shopping industry in India is fast catching on, not just in the larger metros but also in the smaller cities. At present the market is estimated at Rs 6,000 crore and is growing at over 250 per cent per year," Rawat said.
The industry body also stated that in 2011, e-shopping population in Delhi stood at 60 per cent and in Mumbai it was 72 per cent.
"The percentage increase for e-shoppers in 2012 would touch atleast 85 per cent in case of Mumbai, while in Delhi it is expected beyond 70 per cent," Assocham said.
The industry body also estimated that "for any shopping site, the sales are expected to go up by around 20-30 per cent month-on-month during October."

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.

Encouraged by the government's decision to allow foreign direct investment (FDI) in multi-brand retail, the industry has stepped up its demand for opening retail e-commerce to foreign investment to bring the policy in line with international practices.
Under the current dispensation, the companies like Flipkart, Homeshop18 and Jebong, which sell products online directly to consumers cannot access foreign direct investment (FDI).
Although the government's notification yesterday announced FDI in multi-brand retail, it has retained the exsiting provisions which only allow FDI in business-to-business e-commerce and not in business-to-consumer.
As per the policy, retail trading in any form by means of e-commerce would not be permissible for companies with FDI, engaged in the activity of multi-brand retailing and single brand retailing.
When asked what will happen to B-to-C companies which had raised foreign capital, Saurabh Chandra, secretary in the Department of Industrial Policy and Promotion (DIPP) said, "investments received under the FDI scheme need to be
compliant with FDI policy...extant FDI policy does not permit FDI in B-to-C e-commerce".
The government, according to CII Director General Chandrajeet Banerjee, should allow FDI in e-commerce as it would help companies to attract moder technologies and capital.
Echoing similar views, PWC India Executive Director Akash Gupt said the government should look at separate guidelines for FDI in e-commerce activities.
"Worldwide companies are adopting different business models like e-commerce and m-commerce (mobile commerce). Therefore there is a need for an enabling framework," Gupt added.
Head of Tax and expert on FDI with corporate law firm Amarchand & Mangaldas, Krishan Malhotra, too felt the government's current policy will impact several players.
"The government should come out with some clarity on this issue. I think it will create problems for companies like Flipkart etc," Malhotra said.