Though over the past year or so euphoria around etail has subsided in the wake of higher consumer acquisition cost without strong signs of sustainable growth curve. Nevertheless, etail still entices entrepreneurs to evangelize the potential market of 200 million internet users in India.
Horizontal play may seem difficult to crack (against the might of Flikart, Amazon, Myntra etc.) but vertical or niche model has great prospects. Vertical like home decor is a relatively less crowded space in the e-commerce (only retail) market. Moreover, home decor in offline retail is also witnessing 30% plus growth which gives us an idea about the kind of crowd this segment is attracting. Besides Pepperfry and a handful of others, the new entrant with exclusive focus on home decor, furnishing and accessories space is Shawpers.
Genesis of Shawpers
Shawpers is a no-frills e-commerce website launched and funded by three members from IIT/NIT/IIM with experience in some of the best consulting, retail and e-commerce companies. “The idea behind launching a no-frills store is that there are a lot of customers who are just concerned with the right product at the right price with a decent service. By just ensuring that, we are able to take off a lot of cost from the frills of a regular e-commerce website,” says Kanav Sharma, co-founder & CEO. At the moment, he is not willing to share the name of the other two co-founders.
Shawpers leverages hybrid model which comprises of warehouse inventory and marketplace (JIT) model. JIT (Just in Time) is a kind of marketplace executed with strict time limits. Shawpers transacts orders in two digits with average ticket-size of Rs.750-1000.
Building a team is like raising money from VCs
Kanav has a B.tech degree from NIT, Kurukshetra, and earlier worked as an analyst/consultant in e-commerce operations and marketing, including retail and CPG domains. The initial team building phase was a very tough one, reveals Kanav. “Very few talented minds would want to work for a start up which does not have a defined structure. Hiring an employee during an initial phase is as tough as getting an investment,” he adds. He believes that in a startup, one has to sell the concept to the potential employee and make him/her believe in the growth story of the company and the idea.
No Bleed approach
One thing that Shawpers does differently from others is not to bleed by extending discounts. “Our idea is to stay and we do not want impulsive buyers for a few months only to let them go elsewhere. The loyalty of a discount-attracted customer is low, whereas, the loyalty of a brand and a product attracted customer is high,” reveals Kanav.
Challenges and road ahead
Kanav believes big players are looking at short term targets, thereby cannibalizing longer goals and posing serious challenge to new entrants. Pampering customers with discounts is good, but is it sustainable? “Since these players have deep pockets they keep on running discounts for a few months or even two to three years and then either shut down or sell off,” says Kanav.
With a five- member lean team, Shawpers plans to have a small, yet efficient team. “We take motivation from companies like Instagram and Wikipedia, which have grown really big despite a handful of useful resources. Instagram had 11-12 employees before being sold off to Facebook. Wikipedia still has around 140 employees,” adds Kanav.