'What after ecommerce?' - the Giftxoxo story
Despite the number of players in the gifting space, I think it is safe to say that Gifting as a vertical is still in its early days. You would first need a mature ecommerce industry and that would spawn gifting portals that work with them. Within gifting, there is the coupon and gift card space, which has been adopted by the big players and is yet to trickle down to the rest of India's small organized retail space. And there are corporates looking reward their customers who are adopting such portals, making corporate gifting a norm with every startup in the space. In short, the gifting space offers a great opportunity for corporates to capitalize on.
Sumit Khandelwal was seeing the same trends when he was thinking of starting up. He says, "I was really inspired by companies like Wrap and Giftiki. These were companies which were making huge inroads after the ecommerce move in the US. Round about the same time I met Manoj, who was also looking to take the startup plunge. We researched a lot about what it took to start a business in India and the gifting space looked like a sector where we could build a business that will grow. So we started Giftxoxo in early 2012."
They have recently raised an Angel round from Kshatriya Ventures. I caught up with Sumit, co-founder, Giftxoxo to know more about their journey thus far.
Challenges - credentials and India
Sumit and Manoj come from a marketing background. Having gone through with the decision to startup, these were the only credentials that they could bank on. Sumit says, "As a gifting site, we wanted to tie up with a lot of ecommerce players in the background, in the hope that they would give us some discounts for their products. We found a lot of problems in doing so, as we didn't have any credentials to show, like number of hits on the page or number of subscribers. We had to bank on the credentials of our previous jobs and the contacts from there, during the early days."
But a bigger problem that they faced was in the setting up for the startup itself - "I think all startups in India face this problem. Just getting a team and getting our infrastructure in place was a big concern. Luckily for us, we found the right team in myself, Manoj and Abhishek, who's an IIT B product and has worked with startups before this. I think every Indian startup must be cognizant of these problems, otherwise you're surely getting into trouble," says Sumit.
Giftxoxo provides many Gifting services, which is one of it's USPs. Of this, Sumit shares that the corporate gifting space was something that they added recently. He says, "We met a very interesting person who told us that corporate gifting is a must for any gifting startup's portfolio. Also, me and Manoj, who was with companies like Yahoo and FlipKart had quite a few corporate contacts and we started reaching out to them with a corporate gifting offering."
Sumit further shared that for success in the corporate gifting space, you would need to spend a lot of time understanding what exactly a company needs. He says, "There are so many minute details like company policies which you need to be aware of and that will only happen when you spend time with the client. We inherited this practice from our corporate background, and we've always proactively looked for customer feedback. If you keep doing this long enough, the word of mouth spreads quite quickly; the corporate world is quite small. Luckily that happened with us."
A sweet spot: On competition and trends
Sumit is aware of the numerous players in the gifting space, but he believes that not many of them are built to scale. He says, "I wouldn't like to mention anyone in particular, but most players in the Indian gifting space incur large operation costs and are resource intensive. Also, a lot of new guys are looking enter the corporate gifting space, without a sound understanding of the space. For example, the invoicing for a corporate is once every 30 or 45 days. A lot of the planning from the startup's end is done without these sort of basic knowledge."
Sumit believes that there exists a sweet spot for a gifting company that Giftxoxo is striving to find. He says, "The only way you can find that sweet spot is by just spending a lot of time with your clients, many times over. With the recently acquired funds, we're mainly looking to hire really good resources and you will see some interesting updates in the coming months on the portal."
On a parting note, Sumit shared that products will continue to contribute the most to gifting sites; this is case for Giftxoxo - "Giftcards and vouchers still have a few years to catch up. But I believe that in 5 to 7 years, we will see a shift in this trend. But for now, it's products."
Check out Giftxoxo and stay tuned as we bring you more from this upcoming startup.