How a 22-year-old entrepreneur from Indore helped his family-run business go online and achieve 300% growth
Fresh out of college with a Bachelor’s degree in Mechanical Engineering, Chirayu Jain had dreams of pursuing his Master’s in Industrial Engineering in the US. He even applied to and got through a few universities in the US. But at the eleventh hour, he had a change of heart and, instead, decided to join the family run business in Indore.
“It was totally unplanned,” says Chirayu, of this decision.
In 2015, when Chirayu joined Pragati Systems, the business was in a transformational phase. Founded in 1982 by Chirayu’s father, Manoj Jain, Pragati Systems’ mission was to manufacture an affordable range of learning, training and teaching essentials. By 2000, the company had expanded its portfolio and started manufacturing a diverse range of high-quality office supplies, art supplies, training aids and presentation accessories for educational institutions as well as corporates. This includes products such as art easels, flipchart stands, drawing tables, lecterns and interactive whiteboards, among others.
By 2010, Pragati Systems had managed to establish a pan-India distribution network by developing channel partners and warehouses in several states. Nevertheless, something important was missing from the business growth plan – an online sales channel - and no one had done anything to bridge this gap. Chirayu understood the criticality and decided to develop an e-commerce sales channel. “But I was considered the new kid on the block who was doing an experiment. I wasn’t taken seriously, nor was there any importance of online selling,” he recollects.
Chirayu launched a pilot programme to help Pragati Systems venture into the e-commerce space. “I was looking at promoting existing products and reaching out to a wider consumer network, by leveraging the enormous customer base of some of the largest e-commerce platforms in the country.” It was at this point that Chirayu registered as a seller on Amazon.in.
In October 2015, in the very first month of coming on board the marketplace website, Pragati Systems was making an average sale of Rs 2,000 per day. That doubled a month later. Today, in less than three years since launching on Amazon.in, Pragati Systems’ average daily sales figure stands at Rs 3 lakh.
“In FY 2016-17, our annual sales from Amazon.in alone were Rs 6 crore. We aim to take that number to Rs 50 crore by 2020,” says Chirayu, who is VP-Operations & E-commerce at Pragati Systems. He has a team of 10 people exclusively managing their e-commerce business, and handling everything from listings to customer service to financials.
Chirayu credits Amazon for helping the once-traditional family-run business to seamlessly leverage the online medium. “Amazon understood our product range, monitored our performance and identified our problems to come up with a customised logistics and warehousing model which was tailored to suit our needs, while helping to grow our online business. This was definitely a game-changer.”
That said, making the online channel a significant component of the business wasn’t a walk in the park either. “Like many other traditional family-run businesses, documentation, reporting or regular reviewing was almost non-existent. The organisation lacked well-defined roles and responsibilities. Also, the work culture was informal, which often saw people letting their emotions come in the way of business decisions.” But some restructuring in leadership roles and venturing into e-commerce brought in the much-needed change, paving way for diversification and expansion while also bringing in professionalism at work. “Today, we operate just like any other corporate, with separate functions to manage HR, Production, Operations, Product Development and Sales activities along with clearly defined KRAs and standard operating procedures. Rather than looking at hiring within family circles, we now hire experienced professionals. In short, we have been able to build a brand, a scalable business and grown much bigger” he says.
Having a sales channel on Amazon.in not only significantly contributed to the overall sales of the company, it also helped the SME become the lean, customer-centric and goal-oriented organisation that they are today, and further helped Chirayu to expand their product portfolio. “We were able to do so by onboarding under the Amazon Seller Flex programme.” Seller Flex is a service by Amazon where sellers can maintain their products in their own warehouse with the perks of logistics support available under Fulfillment by Amazon (FBA). “It allowed me to focus on expanding my product portfolio, product development and also look at bringing relevant changes to the business strategy while having full control on our inventory and to get to any root cause of customer returns immediately.”
Chirayu advocates the benefits of going online, especially for small and medium scale businesses. “It gives you better visibility, increased sales and also helps you learn industry best practices. You get an opportunity to interact with your end-customer, which helps to enhance the product and service quality.” He adds that an important aspect of online sales is getting payments on time, which translates into a steady cash flow for the business.
This steady cash flow coupled with good online sales has helped the business restrategise its growth plan and diversify its portfolio to new product lines. So far, Pragati Systems was selling products which were manufactured in-house, and now they have entered into joint ventures with quality manufacturers in India where in Pragati Systems will take the lead in handling the responsibility of operations and e-commerce.
In addition, Pragati Systems now exclusively sells items such canvas painting boards, whiteboards, markers, online. “For products like craft supplies, the offline market is fragmented and dispersed resulting in low margins. But selling online plugs these gaps and we are able to tap into a larger number of consumers spread across a wider geographical area with better margins.”
Being from a non-metro and building a growing business from that very city wasn’t something that was possible for entrepreneurs a few years ago. Big businesses were either based in metros or key industrial hubs. But all this is slowly changing with the advent of e-commerce and increasing penetration of mobile, internet and technology. Chirayu says, “Today, you don’t have to uproot yourself from your hometowns even if you have a dream of building a multi-crore business.”
How different is life for a young entrepreneur from a non-metro compared to those in metros and large cities? He chuckles, “I don’t know if it’s a personal observation but I find that life here is laidback. People are content being in their comfort zones. But, I have a contrasting personality. I thrive when I work outside my comfort zone.”
Chirayu’s story is a great example of entrepreneurs who can grow their business manifold in a short time without having to break the bank and invest huge amounts of money, or relocate to another city. All it took was #BadaltiSoch, which led him to register as sellers on Amazon.in, brought him access to millions of potential customers, and gave him ample time to focus on other aspects of growing his business since Amazon.in was handling all fulfilment worries.