Online shopping or e-commerce is a segment that needs no introduction today. There are thousands of marketplaces operational over the internet that has brought online shopping to a whole new level. In this crowded retail format, many companies tired their fortune, but only a few managed to cope up with consumer demand and expectations.
When we talk about the inception of e-commerce in the country, a very few names come to our mind and Naaptol is amongst those few e-retailers that contributed in putting the stepping stone of this digital era of retail. However, the companies did not restrained itself from other routes for better retailing and is now successfully serving consumers on web, broadcast, print and mobile.
Recent the Naaptol has completed its 8th good years in the e-commerce horizon and on this occasion Retailer Media spoke to Manu Agarwal, CEO & Founder, Naaptol to know about this splendid journey, ups and downs and future plans in order to stay ahead in competition.
Please share your background. Your education and whether entrepreneurship was something you always wanted to do?
Though the Naaptol journey may appear easy, I faced a lot of challenges in my earlier ventures. After graduating from IIT Kanpur in 1992, I got my master's degree in electrical engineering and computer science from the University of Minnesota, USA, in 1994. But after working at WSI in Silicon Valley, California, for four years, I wanted to return to India. In 1998, I started my entrepreneurial journey here.
Talk to us about Naaptol’s journey so far?
Naaptolstarted as a comparison site has significantly grew over the past few years with its consistent efforts to evangelize the virtual shopping space through burgeoning ecommerce space in India. Also we realized, there is a gap in the e-commerce space and we launched Hot Deals. After four times VC funded firm Naaptol became India’s first and fastest growing virtual home shopping brand. It is the only brand that offers services over multiple touch points including Print, TV and internet, and Direct Marketing.
Is there a story behind the name, you have given to your business
I have always believed that you can touch the heart of Indians only if you speak to them in their language. That was the reason behind naming Naaptol in Hindi. Naaptol started as a product comparison and research website and it gave the users the access to in depth knowledge about the product and also compared with similar products to help them take a purchase decision. Naaptol means to measure and to weigh. That’s the ideology we still live by. We get best offers for our customers once we have done all the comparison ourselves.
In today’s competitive e-commerce environment, what difficulties do you face in scaling up? How are you addressing it?
E-commerce has been growing exponentially in India over the years and is expected to be worth $100 billion by 2020 and we also are part of this growth. But, same has been the case with the TV home shopping industry. Home shopping continues to grow worldwide. It is the most profitable retail format today. Although home shopping is just about 10 percent of the e-commerce in terms of the market size globally, the difference is that home shopping has higher margins.
We like to be called a Home Shopping more than an e-commerce company. Compared to other players in the industry, we are a multiple media platform company available in Broadcast, Print, Web and Mobile platform.
Who is your target consumer? Could you please share how you have detailed your consumer?
We are targeting the Indian Subcontinent and the Middle East to begin with. We have already signed up with the logistic partners and distributors in the international markets to get products into these countries. Once we have absolute control over the whole value chain, we would take up potential media in these countries and activate our expansion plans. A market study revealed that some neighboring countries are aware of Naaptol and we can use our expertise to reach the consumer with the help of our logistic strength. We have already started initial trials in these countries.
Put some light on the investment front of Naaptol
We raised a new round of equity funding of Rs.343 Crore from Japanese conglomerate Mitsui & Co. This is in addition to Rs. 136 Crore, raised earlier in April, 2015.
We have used the funds to improve programming capabilities, set up new studios, launch more products and for live content on TV. We also plan to invest significantly on specific marketing campaigns for brand strengthening. A substantial portion of the investment will also go into automation of the fulfillment centers in addition to enabling faster dispatch and quick delivery of products.
What was it that attracted the Investors to your business? Have you had to pivot your business in any way that has worked for you?
Persistent growth and promising business plans, also we have been ahead of our competitors by quite a margin for some time now. Yes we have transformed from a comparison based shopping portal to a successful market place and it has been an exciting journey.
What has been your A-ha Moment in the business? (The high point)
We recently achieved gross sales of 38 crores in a single day. Not only did we break many records but also we left the competition in the home shopping industry behind by a huge margin.
How do you see growth scenario is this business? What are your future scale-up plans?
We have the attention of the masses and now it is time to provide them with an enriching experience. We are striving to provide our customers with a sense of fulfillment.
What potential do you see in tier II and III cities of the country? How has been the response from these cities so far?
With rising internet access in tier-2 and 3 cities, consumer’s interest in buying online is increasing in cities & towns. Online retailers are monitoring - that sales from these small towns are fast catching up with sales from the metros and tier-1 cities. Interestingly, women in these cities/towns are playing a key role in bringing about the revolution. In tier I cities, women are far more active buyers than men and outspend men online by two to one, and one-quarter of women in tier one cities make mobile purchases. Online buying aspirations of women in small cities and towns are increasingly converging with the aspirations of women in metros and mini-metros.