The e-commerce space today has a sizable number of players offering different things to netizens. But sometimes in the clutter the need to differentiate and stand out becomes an essential. So when Kumaraguru Seshadri, Founder & Director, Home Needs Online (HNO), decided to sell appliances online, he knew being yet another e-commerce player was not a good enough differentiator.
Building a service difference
HNO therefore decided to combine service experience on top of its product layer to create differentiation for its customers. “We come with a background of 30 years in the home appliance industry. After observing and dealing with the diverse Indian market, we realised a great inconvenience in the process of purchasing appliances by Indian customers. We decided to focus on satisfactory online shopping solution for appliances where consumers will have access to the spectrum of best brands in the market, real time product information, including specs, value based pricing and fulfilling after sales services such as free home installation and free lifetime repairs of the appliances,” says Kumaraguru.
Started in April 2013, with a personal investment of Rs 2.5 crore, HNO says it has seen good traction since November 2013 and has close to 7500 unique visitors coming to the site per day. Customers have been appreciative towards the portal’s problem solving efforts – a problem that has given birth to startups like TheekKarDo and Travtus Work Force among others.
Currently, over 135 national and international brands are sold on HNO. Appliances are the bestseller on the site because of the complimentary ‘At Home Service’ offer – which includes free shipping, free installation and lifetime repairs for all kinds of appliances. Kitchen and furnishing categories also do well and come a close second after appliances, says Kumaraguru. While they deliver to over 13,500 pin codes across the country, at present, their ‘Same Day Delivery’ service is available only in Chennai.
The HNO team looks at trends in the market and online buying patterns to decide new categories to add to the site. Vendor onboarding is done on the basis of market reports and progressive purchasing history for product and brand. At all time though, HNO’s focus continues to be appliances, decor and furnishing, as well as unconventional products like solar panels, lighting, modular kitchens and such. Therefore, product and vendor decisions are taken largely around these categories.
Customers in the age group between18and 45 years are frequent buyers at HNO, where women slightly outnumber the men shopping on the site. The EMI facility given by HNO is another factor that attracts customers. They have tied up with eight banks, including SBI, HDFC, Standard Chartered, Kotak, Citibank and HSBC for this purpose. “We are targeting two types of consumers -- one is the working class population who move cities often. We want to help those consumers set up their homes in new cities in almost no time. The other is the group which look to replace their old appliances,” explains Kumaraguru about their customer strategy.
HNO relies on both ATL and BTL advertising to target customers. A good measure of brand building is also being done on active social communities online for customer acquisition. Affiliate marketing, experiential marketing/interactive marketing is its main priorities. “Our marketing strategy is based on three major elements - customer obsession, creative and unparalleled schemes and omni-channel outreach,” says Kumaraguru.
When quizzed about other online retailers like Croma, Snapdeal, and Pepperfry, etc which are also in the same space as HNO, Kumaraguru says their service offering and free lifetime repairs is a big advantage over other players in the market.
Behind the scenes
This self-funded venture has a young team of 40, and Kumaraguru is banking on the upcoming festive season to bring in rich dividends.
While there have been many hiccups in the journey so far, Kumaraguru picks up three main challenges that keep him awake at nights. Logistics has been a big challenge, especially in remote areas with poor infrastructure and urban connectivity. “While we are working with top logistic players orders destined for remote areas are difficult to deliver without hiring third-party local/regional carriers. Hence, achieving promised delivery dates is sometimes impossible. To add on, retailers are charged more by the airways for carrying packages, there are several regional bureaucratic issues such as state entry formalities and local government obligations to deal with,” rues Kumaraguru.Payment collection options are the second big hurdle. With Cash on Delivery (COD) being the favourite mode of payment for Indian customers, the costs attached to collecting cash is an impediment. “Shipping carriers charge for collecting money from customers, lead times for payment capture are longer and sometimes exceed the timeline for replenishments. Also, payment gateways are less competitive in Indian e-commerce given that few players are holding market share and payment gateways are pivoting the players on higher percentage cut per transaction,” he explains.
And worst of all troubles is the higher percentage of product returns by the customer (due to change of mind by the consumer, unavailability to receive the package or fraudulent orders). HNO’s vast experience in the home appliance industry is helping them take these issues head one, and Kumaraguru says they are working with vendors and industry partners to put stronger processes in place.
While everybody agrees to the e-commerce opportunity in India, problems faced by HNO are not too different from other players in the space. However, amidst all the issues, the customer remains the king.