K Vaitheeswaran, Founder and Chief Operating Officer of Indiaplaza, was part of the team that co-founded www.fabmall.com.
After spending 14 years in the Murugappa Group and Wipro Infotech in various business development roles, he was bitten by the internet bug and co-founded Fabmart.com in 1999 – India’s first pure-play online retail company.
In 2002 he co-founded Fabmall – India’s first integrated online and offline retail company. Fabmall went on to become one of India’s largest grocery retail chains and was subsequently acquired by the Aditya Birla Group and the Fabmall stores in various cities in South India were re-branded as More chain of stores, which was later re-branded as Indiaplaza.
Since September 1999, he has spent all his time and efforts in not only building his company into a position of industry leadership, but has also been engaged in evangelising the cause of e-commerce in India. He is listed among the Top 20 people in the Indian Internet industry.
In an interaction with knowAhead, Mr Vaitheeswaran speaks about his journey and the eCommerce market in India:-
With more than 10 years of experience in e-Commerce, how been your journey till date?
When we started India’s first online shopping site in 1999 and pioneered e-commerce in India, we didn’t have anybody to look up to and learn from. So everything that we did, we didit on our own. We made mistakes and learned from them.The first big mistake we made was an error of judgment. We thought that ecommerce is going to be a huge business in a short period of time, but it took us two yearsto realize this is not a 100 meter run and it is going to be a marathon and we need to conserve energy to plan for the long run. I personally continue to believe even today that e-commerce is a massive industry. We went through our difficult periods, but were grounded with the idea that we must continue to investsince e-commerce is something that is going to work only in the long run.Way back when we started the business, the number of people using the internet in India was 3 million and customers shopping online were 20,000. You can’t build businesses with those numbersbut this has significantly changed today. The 3 million has now become 100 million, and the 20,000 has become 7 million and that is one big change.The second big change is that in those days there was a massive discomfort in transacting online. I think to a large extent those inhibitions have now been removed, and there are many things that has driven this change, such as comfort with online bill payments, withdrawing cash from ATM, buying travel tickets and air tickets online.
With this background, we are now beginning to see serious scale in the business and starting the realize the fruits of our decade old pioneering work. It is a matter of pride for us that many entrepreneurs are now following in our steps to build a robust industry.
As more and more e-Commerce sites coming on a daily basis, how do you see this for Indiaplaza?
Of course, like any new industry that is growing very fast, e-commerce is also attracting fresh entrepreneurs and exciting investors who are expanding the pie, building more awareness and accelerating the shift online. More people these days are shopping online from Meerut to Mysore than Delhi or Bangalore, indicating deeper internet penetration, also the power of selection and pricing that internet retailers like www.indiaplaza.com offer.
We are happy that so many new e-commerce sites are coming up. It drives more people online which is good for Indiaplaza also.
With almost every e-Commerce making loss, what according to you is the right approach?
E-commerce is a business. A business must make money in the short run. This is our philosophy and we believe it is also the right strategy and approach. We realize that most e-commerce companies are following a different strategy where the focus is to show sales growth without worrying about profits. Time will tell which the correct strategy is.
How social Media does have an impact on Indian e-Commerce Market?
The key thing that digital media has done is allow brands to engage directly with consumers. The power to influence decision making in buying products or services has shifted to customers. This has resulted in making customers very demanding and put pressure on brands and retailers to be on their toes constantly to listen to their consumers and make corrections and improvements.
How, do you think e-Commerce in India will shape up in coming few years?
E-commerce is here and it is happening. There is no going back now. Sure, some e-commerce companies like Taggle.com will burn through their cash and close down and some like Letsbuy.com will struggle to survive and get acquired. That is the way any new industry matures and e-commerce will also go the same way.I also expect large offline retail chains to enter e-commerce strongly. This will be a key trigger point in enhancing the growth of this industry.Mobile commerce is also expected to take off but that is at least a few years away. Right now, most mobile transactions are restricted to ticketing.
In summary, we as a company and I as an individual are very excited today. Our pioneering efforts years back is finally bearing fruit.
Any message to the budding Entrepreneurs.
Start the venture with a clear plan to grow in a sustainable and profitable manner. It is easy to sell online, it is hard to sell online and make money. Choose the harder path that is how you can stay ahead of others because most people will always choose the easier path.