If there is one segment in India that has caught the fancy
of investors, entrepreneurs and customers in a phantasmagorical display of
consumerist abundance unlike any other in recent times, it is e-commerce. On
the one hand, the sector has its naysayers (the latest being former Network18
chief Raghav Bahl, who has said the
bubble will burst soon) and, on the other side, there are the poster boys who
continue to inspire youngsters to set up online shops (a la Sachin and Binny
Bansal of Flipkart, Vijay Shekhar Sharma of Paytm, Kunal Bahl and Rohit Bansal
of Snapdeal and many, many others).
The statistics are getting quite interesting and really,
really serious. An Assocham-PwC
study projects that the Indian e-commerce industry will grow from $17
billion at present to $100 billion in five years' time--at an impressive CAGR of
35%. The bubble part, and I do believe there is a bubble part though the whole
sector cannot possibly be a bubble, will likely put some pinpricks and bring
that estimate down to a more sober level. Even then, it will be a multibillion
dollar sector in respectable double digits.
Interesting as the stats and the daily dose of funding
infusions are, this post is not about them. It is about a behind-the-scenes
look at how the technology heads at some of the niche e-commerce firms in India
are keeping the clicks on. As CIOs/CTOs and enablers of the business, what
challenges do they face in different aspects of running an e-com business? Are
they under pressure and if so, to what extent? What tech tools and strategies
are they using to keep up in this fiercely competitive and hot domain?
While the spotlight may be turned for the moment on the
Flipkarts, Snapdeals and Amazons of the world, I believe it will be several
mid-size companies, specialist e-com players (like those featured in this post)
and other ecosystem partners (the suppliers, logistics firms, affiliates, etc.)
who will collectively make the e-commerce industry come into its full diversity
and bring it into a sustainable trajectory for the years to come.
So, let's learn what the IT honchos of Purplle.com,
Craftisan.in and Clovia.in have to tell us.
"Being a startup, we wanted to start small and then scale
up, so we chose to host our infrastructure on the cloud," says Suyash Katyayani,
CTO, Purplle.com (which tags itself as
"India's beauty destination") when I asked him why they chose cloud (Amazon Web
Services) for most of their IT needs. "Thus far, AWS has proved to be a good
choice for us, as it offers a lot of flexibility and we can quickly spring up
and close test servers whenever we want. The billing is pay-per-use, which
suits us. While at this stage of our growth, we can probably afford to spend on
the infrastructure but there are costs other than the bare infra costs that we would
have to bear, including managing the infrastructure and hiring skilled
And one of the major challenges Suyash faces is in hiring
good technical resources, especially in Mumbai, where the company is based.
While he has tried to automate most of the processes at
Purplle, some challenges remain. Says he, "I have realized that there are few
problems in automated processes, there are certain things such as customer
returns and logistics which are very difficult to fully automate."
For that purpose, the company has developed its own in-house
software. But could that have been done without?
"If we were to use a packaged application for that, we
would require a lot of people to perform all the associated processes. So in
the current setup, we have assigned 2-3 tasks to one person and are thus
optimizing our resources. Here again, handling exceptions in returns, something
which is not written in black-and-white or which gives birth to unforeseen
situations--now, that often proves to be a challenge," he explains.
Nevertheless, as the company goes through more situations
and handles more orders as well as returns, its ability to handle the exceptions
is also improving.
Another challenge is presented by the need to perform
constant quality checks and to ensure that the product that is shipped by
vendors is of the same quality and quantity as per the invoice. In fact,
Purplle has chosen to deploy its own home-grown ERP. This, says Suyash, is not the norm in e-commerce,
but it is working "just fine" for the company.
For a niche e-commerce player like Purplle, it is very
important to engage its customers deeper than the typical horizontal e-tailer
that operates largely on price alone. How does the company do that?
"While we also offer the best price to our customers, we
actively encourage them to share their experience and review our products or
services they have used," says Suyash. When I press him some more, he puts it
succinctly: "We are not a large e-commerce player like Flipkart; we are not a technology
company either; we are a beauty company that knows how to use technology to
sell and serve our customers."
Similar sentiments are echoed by Dheeraj Sharma, Head -
Offline & Online Operations, Logistics and User Interface, including
Technology, at Craftisan.in. The site
is described, as the name suggests, as an online marketplace for Indian crafts
"I think most e-tailers are focused on fashion and
electronics but these two do not encompass the entire e-commerce space. So
there will be a lot of scope for niche players," he says.
Like Purplle, Craftisan also uses a mix of in-house and
outsourced technology (the site is hosted in Singapore by Digital Ocean, which
also doubles as a content delivery network). The company uses Magento Webstore
e-commerce platform and the customizations required are handled in-house.
"The mix of in-house and outsourced IT infrastructure is
working out very well for us, because we can keep within the cost constraints.
We can also do any customizations remotely on our site," says Dheeraj.
One of the big challenges he currently faces is in
managing a lot of offline interactions with its 700-800 vendors. "We are
evaluating CRM solutions such as Unicommerce or Vinculum, which will allow us
to scale up and take those interactions online. Using a solution like that, we
would just give the vendors user names and passwords and they will be able to
upload their product information directly on our platform," he says.
Another challenge: The company uses services from
different logistics companies such as Fedex, Blue Dart and DHL in different
locations globally--but it has to use multiple systems to manage deliveries. "We
want an integrated solution that can give us ease of use and visibility across
different logistics vendors," he says. Unfortunately, there don't seem to be
many solutions out there and he's still contending with the problem.
To build customer loyalty and improve site stickiness,
Craftisan uses many re-marketing tools and services from US-based companies
that help it send targeted emails to customers who have abandoned the shopping
carts midway and did not finish the transaction. "Through these tools, we can
give them discounts or other attractive offers. We also incentivize customers
on completing our surveys or filling up the feedback forms," says Dheeraj.
The tactics seems to be working: 30 to 35% of people who
shop on Craftisan.in are returning customers, he says.
For Aditya Chaturvedi, Co-Founder & CTO of Clovia.com, which specializes in lingerie, one of
the key challenges is to strike a balance between operations and sales on a
day-to-day basis. In a traditional environment, one wouldn't think much of it,
but when you are growing 20-25% month-on-month, it does alter the situation.
"Given that the operations are very complex and I get a
lot of requests from multiple departments, one needs to plan and execute very
well," says Aditya. "We sometimes make processes that make sense in the
conference room but which turn out to be ineffective or not feasible in the
The good thing, he says, is that he gets constant feedback
quickly and everyone in the company is forward-thinking and confident that
"technology can solve their problems."
Again, for Clovia, the IT setup is a blend of in-house and
outsourced solutions--with mobile apps being the most frequently outsourced.
For its hosting needs, the company recently shifted from
Netmagic (India) to AWS (Singapore); with the latter, he believes, they can
upscale and downscale more easily and there's more overall flexibility.
As its e-com platform, the company decided to pick up an
open source shopping cart and build it up for custom use. It uses Satchmo, an
e-commerce framework built on the free and open source Django web application
When asked how technology can help the company build differentiation,
he says, "We keep asking questions of ourselves and our customers as to how can
we serve their needs better. For instance, bra sizing is a complex problem in
our industry segment and we use online tools to offer different fits and
options to the customers. Another innovation in the "office mode cum privacy
mode" for viewing the site. This keeps most of the images on the site grey
until the user hovers over a particular picture, which then turns full color."
Such technical features, he says, are very much
appreciated by many users who might be shopping for lingerie in an office or
public environment and do not wish their screens to be splashed with stuff that
could otherwise be embarrassing for them.
The company uses a mix of analytics tools to keep track of
customer activity on its site, including those developed in-house, Google
Analytics and a popular web and mobile analytics tool called Mixpanel. These
help them study the pattern and cycles of customer purchases and do targeted
marketing campaigns based on those patterns. This lends a contextual flavor to
the emailers and other customer communications, including SMS.
So, how do these
CTOs feel about working in the fast-paced, challenging environment of
e-commerce, the expectations of other CXOs and the future in this industry?
To begin with, they all feel the expectations in e-com are
above what one would normally encounter in other industries (though in varying
degrees). Yet, they are almost unanimous in their excitement and positivity
toward the sector.
"In e-commerce, business requirements are not always
clearly defined. The business model or logic can change quickly, depending on
how the top management has analyzed a given situation or certain data. For
instance, one can choose to change the business model from sourcing a product
from multiple vendors to just one or two vendors. This can be quite challenging
to implement in a limited timeframe, considering that we source ten to fifteen
thousand products every day," says Suyash of Purplle.
Nevertheless, he says that working in e-commerce is indeed
very exciting and "we need to be very agile to do our job."
The next big milestone for Purplle, whose shipments will
increase from around 4,000 a day in January this year to as many as 10,000 a
day by another 8-10 months, is to reduce the average shipping time from
one-and-a-half to two days to same-day delivery.
Clovia's Aditya, too, is quite confident both of the
sub-segment his company is in and the overall e-com space. Says he, "We are not
in the GMV game (GMV = gross merchandise value) unlike other large players in
e-commerce. Besides, we see ourselves more of a brand than a retailer. We can
turn profitable any time we want if we control our growth, which is very high
The hyper-growth scenario and feverish competition in this
sector, he says, is because a lot of investment has gone into e-commerce in the
past 3 to 5 years--probably the equivalent of what went into the physical retail
space in a period of 10 or perhaps more years.
For his part, Aditya believes that there's still a lot of
white space left to cover even within a niche segment such as lingerie. "It is
very exciting to work in a startup environment," he says. (In fact, he has been
more or less a "startup guy" having played leading roles in the tech function
at three companies when they were just starting off: GlobalLogic, 3CLogic and
In the e-com space, you are often required to play
multiple roles, feels Dheeraj of Craftisan. "In a startup environment, things
move much faster and you often have to wear different hats within the
organization. For example, I also play the role of the HR in helping the
company align people's expectations in line with business needs and goals. Some
people may be hired for marketing, but may need to be moved to a different
role, say, social media," he says.
With Craftisan for the past three years, Dheeraj has
worked with the Smile Group and Exclusively.in (which shipped products only
outside India). He also had stints with traditional companies like British
Telecom and HCL.
When asked to compare working in an established company
versus in e-commerce, he says both have their pros and cons. "But the kind of
explosive growth that e-commerce is going through in India at the moment, you
cannot get anywhere else. The field will continue to grow at least for another
5-6 years, as there's still a lot of action yet to happen," he opines.
As the action
rolls on, we at DynamicCIO.com will bring you more stories from
behind-the-scenes in e-commerce. Watch this space.
Image courtesy: www.freedigitalphotos.net