Out of the \'Box\' Retailing!

For the marketing and sales segment, connecting television with shopping opportunities has been a real revolution in tapping new avenues for commerce. And in the last few years, television, as a dominant media, by virtue of its reach has made a comeback by upgrading and changing into a superior shopping medium.

It has lost its tag as the ‘idiot box’, and has, in fact, widened its viewership in the country, by innovatively transforming itself as a means of shopping, i.e. teleshopping or homeshopping. Leading this change, is HomeShop18, a company that pioneered the concept of homeshopping by launching the country’s first 24X7 channel in 2008, which has revolutionised the virtual retailing concept in India.

Since the launch of the first TV Channel, Doordarshan, back in September 1959, TV has seen myriad developments with changes in technology- with inclusion of satellite channels and high-definition DTH services, among the latest ones.

As per the TAM Annual Universe Update - 2014, India now has over 277 individuals (out of 312 million), with television sets, of which, over 145 million have access to Cable TV or Satellite TV, including 78 million households, which are DTH subscribers.

Looking back, TV viewership in India was an information and entertainment-driven proposition until 2008, when HomeShop18, the first Indian homeshopping channel entered into the virtual retailing concept, offering a wide assortment of ‘genuine products’ on its 24X7 teleshopping channel.

Talking about the brand’s journey, Sundeep Malhotra, Founder & CEO, HomeShop18 said, “We have built a multi-channel platform that cuts across all geographies, all sorts of income segments because of two reasons- we only sell genuine products and those products with guarantee; and we manage and own the after-sales services after every transaction.”

Building credibility

Until HomeShop18 arrived, television as a medium to see, evaluate and purchase products suffered from negative perceptions, especially about product quality, portfolio variety and user experience. So, building this medium as a comfortable and trustworthy platform was a huge challenge. And to overcome this challenge, Malhotra said that they focused on two objectives: How do we get people to build trust and how to ensure that the best brands and products get delivered across the length and breadth of the country.

TV Still dominant

With a reach of around 100 million households in 2008, much bigger than 20-25 million Internet connections at that time, television was a more powerful medium of info-tainment. Though Internet penetration today is over 200 million users, Malhotra still believes, “Television till date is the most credible medium of information-communication from the perspective of an Indian household. The centrality of television in Indian families is because our avenues of entertainment are limited."

While in metros, the rise of Internet usage, social-clubs, and book-clubs might be sources of entertainment competing with television for consumer mind-share; for most of the smaller cities, television is the best mode of gaining information.

Also, television, unlike mobile and Internet, is interactive and the power of demonstration of television is unmatched; making it a great medium for retail. Hence, HomeShop18 started with television as a medium to reach the vast number of households and build credibility, gain acceptance for the virtual commerce business that they were trying to build and thereby, establish themselves as a brand.

Today, for brands and product owners, HomeShop18 is the partner of choice for virtual commerce, as it has the biggest distribution channel covering 3,000+ cities, reaching over 25,000  pin-codes; with a call centre that handles over 2, 00,000 calls per day from across the country. 

Bringing innovation

Innovation has been at the core of HomeShop18’s philosophy and has resulted in the company bringing many ‘firsts’ to the country, be it on the medium front, with first-ever 24X7 virtual retail channel for Indian households, or on the aspect of a product portfolio, by offering a variety of interesting products like solar, transparent and whatsapp phones, affordable designer sarees and jewellery for consumers etc.

The company also introduced India’s first virtual shopping wall for the mobile platform, Scan N Shop at New Delhi Airport, T3 Terminal in association with Delhi International Airport (P) Ltd (DIAL). This Virtual Wall offers customers the ease of ordering premium products by simply scanning the QR code displayed against each item or via a phone call to the HomeShop18 call centre.

Malhotra shared, “We were the first to start with only established brands. We also introduced ‘Cash on Delivery’ in the country and we are the only company to offer free shipping, irrespective of the product cost.”

Additionally, HomeShop18 boasts of a dedicated procurement team, which works in reverse engineering and developed product lines exclusively for the Indian market.The team worked closely with top companies such as Micromax, Spice, HCL, Lava and created innovative products line-ups that were both affordable and superior in technology, for every type of Indian consumer.

HomeShop18 is committed to provide its customers with a gamut of products across its various categories, unbeatable propositions and an integrated experience across its three platforms-TV, web and mobile.

Interview:

HomeShop18 is a virtual retail company that started its journey in 2008 and progressively added other retailing platforms to its portfolio. In an exclusive conversation, Sundeep Malhotra, Founder & CEO, HomeShop18, talks in detail about why television is a high -margin retail business for them.

You have been successfully engaging customers through television, Internet and mobile. Among these, which platform is more profitable for you and which one works better in customer acquisition too?

We differentiate ourselves with television. TV is certainly more profitable because of the high throughput, high-margin business model. Internet is low-margin, low-throughput and a long tail business that will take time to reach sustainability.

For us, mobile and Web are complementary and supporting channels to television rather than separate lines of business. Even going forward, we will keep strengthening our already profitable television business making it a high growth; high sustenance business, while mobile and Web will support television, engage new customers and will act as catalogue for products on TV.

What is your television viewership in the country?

We are currently available in around 50 million households and close to 28-30 million people are watching our channel on a regular, daily basis. And this viewership does not span across just two-minute’s time as the content of HomeShop18 channel is so different. The average time-spend on our channel is several times more than the time-spend on other television channels.

How do you see the present day eCommerce growth story?

I think it is just the beginning-the eCommerce growth will not be a mere two per cent of our retail buy, but this could be as big as 20 per cent and not in even ten years, but may be in a much shorter time.

Coming to your IPO in NYSE, is it true that you have scrapped the IPO and are re-evaluating capital raising strategy?

True. An IPO is a means to capitalise the company, earlier that was the path that we had decided to take, but now with the change in the investment structure, we do not see the need to take that path. So right now, we are focusing on growing our business and earning profit with our own means.

What are your future growth plans?

We are the pioneers in home shopping space and have completed six successful years in the running. HomeShop18 is the catalyst for growth in emerging markets within India by bringing bigger brands to their doorstep. By providing an unparalleled shopping experience to Indians across cities, Homeshop18 is making an alternate channel for distributors contributing to the growth of small and medium enterprises. We are looking to launch new value-driven shows and bring in a variety of products and brands. We are building our loyalty program and a host of customer-oriented measures.

Our growth plans include expanding the reach of television, bringing new product categories, getting more and more exciting new products, and managing regional language requirement of the country etc. We aim to reach more consumers and offer a variety of products. We intend to not just look at the Indian brands, but to look at the global brands as well, and deliver these to the smallest cities of the country.