Online retailing gains momentum

[suguhopes]

PUNE: For the adman turned online marketer Prakash Bang, the only
truth is bottom line. If cash register is ringing, the business model
is a success, he maintains. Using that yardstick, several online
retailers are reporting success, and not just in the usual businesses
of travel, art, books and music. These are e-tailers from the lingerie
and fresh fruit businesses, which usually require a high level of
buyer involvement by way of touch and feel.

Hina Saiya of Shop Imagine, an online lingerie store which went live
in January 2008 and started shipping out products from the following
month, says she is “blown away” by the response from the far off small
towns of semi-rural India. “I had not even heard of these places from
where we are getting our orders,” she said, adding: “Businesses have
not tapped into this phenomenon of India’s women being able to use
their financial clout and buying themselves some excitement and
romance via these luxury, aspirational items.”

Mr Bang’s fresh fruit e-tail venture is seven-years-old. He admits to
selling 1-lakh mangoes during the short, two-three month season, with
90% of his sales being domestic, making it worth around Rs 1 crore
from just one fruit. He has just added sitaphal and pomegranates,
giving him fresh produce for at least nine months of the year. “We
have three brands in mangoes starting with Bangoes, sitaphal goes
under the brand of Capp and the red pomegranate under the brand
anara,” said Prakash Bang and Sons CEO Mr Bang.

Silicon Valley-based Ms Saiya and the Pune-based Mr Bang agree that
gifting is what gives them volumes. Ms Saiya expected the Valentine’s
Day effect to linger for a bit. “We were surprised that sales just
kept on, long after Valentine’s Day. These items are mainly gifts,”
she said. Since neither has an offline presence, all the action is on
the Net and Ms Saiya maintains that it cost her a quarter of what it
would have cost to set up one small shop in Mumbai to retail her line
of products. The average size of a purchase varies between Rs
10,000-20,000, usually comprising two or three items.

“Retail is too daunting to enter. This way, with a portal, I can
target the entire country, with an office here. We ship out from a
central store in Bangalore, where goods ordered from all over the
world are stocked,” she said. From concept to start-up took her less
than a year and now, within a year of start-up, she plans to extend
the product range. This venture is privately funded although she is
open to external borrowings for the expansion.

N.Sukumar
Research Analyst