Noida-based video commerce platform Ezmall has trained its sights on Tier II and III markets. In a chat with YourStory, Amit Bansal, Founder and CEO, speaks about his company’s differentiator, growth strategy, and future plans.
When ecommerce platforms saw exponential growth in 2015 and 2016, Amit Bansal felt ecommerce needed to touch the “next 100 million users”. Having worked for the likes of Flipkart, Reliance Retail, Best Buy, and Sears, Amit realised there was a big hurdle to cross. The next hundred million users - residents of Tier II and III cities - were used to traditional physical retail and paying in cash.
Amit also realised that often it is the salesperson who clinches a sale and to capitalise on this, he started Ezmall, a video ecommerce platform that operates across categories like apparel, home, kitchen, cleaning, and others. The company, which aims to simplify ecommerce, was founded in 2016; the platform was launched in 2017.
In just a year, Amit says EzMall has established a capital-efficient growth model, and the platform has raised $15 million in two rounds of funding. Investors include the Essel Group.
An investor in EzMall says the team has successfully put in place a hyper-growth model, achieving operational break-even within six months of launch, and has scaled operations month-on-month in a sustainable manner.
In a conversation with YourStory, Amit speaks on why the video format works in ecommerce, using regional languages will help crack specific markets, and how Ezmall is bringing the NHM shoppers online.
Edited excerpts of the interview.
YourStory: Why venture into video ecommerce? How does it help create a differentiator?
Amit Bansal: The Next 100 Million (NHM) users rely on touch and feel to make buying decisions. At Ezmall, we use videos to bring products to life, the closest it can get to “touch and feel”. Videos help build trust and credibility in a consumer’s mind and help understand product features. The engagement and conversion rates on videos are significantly higher as compared to image-based commerce.
YS: You use Hindi in your videos. Are there any plans for other languages?
AB: Over 68 percent of Indians consider local language digital content more reliable as compared to English. A significantly large portion of the NHMs is comfortable with conversing in regional language. We used Hindi as a primary language of communication in our videos, which gained us traction a large number of Hindi-speaking customers. Over the next couple of quarters, we will offer videos in five more regional languages: Tamil, Telugu, Gujarati, Punjabi, and Marathi.
YS: Are there geographies that predominately form the bulk of business for Ezmall?
AB: Over 80 percent of our customers come from non-metros; they’re spread across 1,800 cities. Majority of NHMs are based in Tier II and III cities. They want to purchase good quality, affordable products. Their purchasing decisions and lifestyle are influenced to a great extent by what they watch on television. We currently reach over 70 million households (250 million users) across 22,000+ pin codes.
YS: Can you tell us what your unit economics looks like and how long will it take to be profitable?
AB: We have strong unit economics in place and make money on every order we ship. We are operationally break-even for the July-August-September quarter, and our cash burn is significantly lower than industry standards. Our focus is to scale the business 10x. Given our healthy unit economics, profitability will follow scale.
YS: How are you different from conventional ecommerce?
AB: Current ecommerce solutions have done a good job in creating an ecosystem for online sales. However, the NHM need touch, feel, quality assurance, and assistance. We leverage the power of videos to mimic touch and feel and create an engaging shopping experience.
The fact that our merchandise is curated for quality and shipped through our warehouses creates further trust. The NHMs find a curated catalogue far easier to shop from as compared to searching through thousands of listings. Our customer returns are below 4 percent; repeats are close to 30 percent - this is a validation of our customer stickiness.
YS: What are the key differentiators?
AB: We are a video-first company; our product videos and commerce platforms provide the physical familiarity of traditional shopping along with conversational content. A customers’ ability to convert on any of these platforms and provision of user-friendly means to return/exchange through any platform is fundamental to our omni-channel experience.
We are not a marketplace; our products are curated.
YS: How are you helping the NHM come online?
AB: The number of Indians transacting online has gone up significantly due to technology and the rapid pace of growth in digital payments. Rural towns and Tier II, III and IV cities are fast emerging as promising markets with NHMs driven by access to content, internet usage, increasing disposable income, and smartphone penetration.
What needs to be addressed - for the NHMs - is easy access, personal interaction, and trust. They often need assistance and access to a transaction platform to be comfortable in a non-store environment. Customers can call our CRM system, where our agents help them make seamless transactions. We also have a website; they can browse products, see videos for better understanding, and make informed purchases.
We are also launching a multi-lingual Android app to help transact in people's preferred language.
YS: What were the challenges when you first started? And what are the challenges now?
AB: At the outset it was challenging to hire people and get large-scale merchandise partners on-board. I was fortunate to start with people I worked with earlier; that created a strong synergy in the team. Once the core founding team was in place, it was a lot easier to build the team.
Our next big challenge was to get big and quality vendors on board to streamline our supply side. Now, our focus is to improve our reach to new cities to get the scale we desire. We are a capital-efficient organisation; that will help us maintain our unit economics as we grow.
YS: How did you build the team and align everyone to the idea?
AB: We have a clearly articulated “core purpose” – this gives everyone a purpose of why Ezmall exists. Ezmall is an open workspace and every individual is empowered to challenge the status quo and solve problems.
YS: Would you be introducing more categories on your platform? What is your current ASP?
AB: We are a horizontal commerce player. Our target customer is “stay-at-home women”. The categories that have done exceptionally well for us include home furnishing, apparel, kitchen appliances, cleaning aids, pots and pans, gourmet food, etc. We have an average order size of Rs 1,400-Rs 1,600. The fact that we offer a curated set of SKUs within a category helps us buy deep. We have recently found success with selling services (homeopathic subscriptions) on our platform. We are constantly working to launch and disrupt newer categories.
YS: Who is the company’s ideal customer, and how does the company engage them?
AB: NHMs are our largest audience. They are typically heavily influenced by what they watch on television. They reside in Tier II and III cities, and while they would like to keep up with the latest fashion trends, they seek value for money products. Ezmall engages with them through conversational and advisory videos.
YS: How many people are you looking to hire this year? Who is the ideal candidate for your startup?
AB: Ezmall, a team of about 130 people now, follows a lean and flat organisation structure. We plan to double the team size over the next 12 months. The key areas we are looking at are engineering, product, content, and merchandising.
YS: What are the future plans for Ezmall?
AB: We want to be the preferred choice for NHMs. We have grown 5x since April; the total cash burn has stayed constant. This Diwali, we shipped over 750,000+ units. At this kind of pace, we will grow our business 10x over the next 18-24 months and still maintain healthy unit economics.