Interview with Neeraj Choudhary

1. Big data technology to solve sizing issues and create virtual fitting rooms 2. Supply chain optimisation using technology by seamless integration of various systems 3. Technology to perform predictive analysis while designing new collection

Currently, the Indian e-commerce industry is worth about $24 billion, which is a meteoric rise in 7 years from $3.8 billion in 2009. India has an internet user-base of about 375 million (30 per cent of population) as of Q1 FY16. Despite being the second largest user-base in the world - only behind China (650 million, 48 per cent of the population) - the penetration of e-commerce is low as compared to markets like the US or France. But it is growing at an unprecedented rate, adding around 6 million new entrants every month. With this increasing internet user-base, India's e-commerce market is likely to touch $38 billion mark in 2016, a massive jump over $23 billion in 2015. On the other hand, m-commerce is growing rapidly as a stable and secure supplement to e-commerce industry.

Being in this industry for long, I have seen that one of the biggest factors lowering profitability of e-commerce firms is that they have done nothing to stop this industry from becoming discount-driven, which actually hurts sellers and firms. They should work on making it a product-driven industry rather than being discount-driven. They can take many steps since they are the ones dealing with the end-customer like giving them future trend analysis, curation of products, analysis to sellers based on their products and its performance, etc. Such kind of close monitoring will not only help in increasing volumes, but will also help in lowering return percentages, which is also a factor hurting the pockets of such firms. There are many marketplaces operating only on fashion categories such as Jabong, Myntra, Limeroad, etc. According to studies, every third search on Google is related to fashion. So, there is no doubt that this is one of the fastest growing sectors in the Indian online market. Even marketplaces which sell products from various categories (fashion apparel being one of them) have their advertisements majorly focused on fashion. Online market in India is driven by discounts, offers and heavy promotions. From sellers' point of view, it becomes important that they take full advantage of these promotions and remain updated. So that when an end consumer reaches these platforms, they are present there at the right time with the right kind of products.

I will say that there is a very good adoption rate. The problem seems to be the lack of availability of cloud technology platform integrated across all the departments. Solutions available targets one of the departments only like operations, marketing or customer support. But the overall picture needs to be clarified by the seamless integration of all these platforms.

At Eshopbox, we specialise in helping retailers sell on online marketplaces with services like: 1. Infrastructure Management (Server Hosting, CDN Set-up, Data Back-up, etc) 2. Product Cataloging (Product Description, Photography, SKUs, Buying Terms & Conditions, etc) 3. Customer Management (Multi-level Support, Live Chat, Ticket Management, CRM, etc) 4. Marketplace Publishing (which includes e-commerce websites like Jabong, Myntra, Flipkart, Amazon, Roposo, Snapdeal, Limeroad, Paytm Tradus, etc) 5. Sell (Inventory Management, Payment Gateway, Order Processing, Packaging & Handling, Deliver & Pick-ups) 6. Advertisement (Offline Media, Banner Ads, Discount Coupons, CPC, CPM, etc) Initially, when Eshopbox was only providing technology solutions, majority of our clients were from fashion apparel industries. Due to which we decided to target fashion apparel segment only, which is our forte for rendering diversified end-to-end solutions, and gradually enter other segments also. Fashion apparel segment is high ROE (return on equity) segment as compared to other segments like electronics, where competition is huge due to presence of market giants. Eshopbox's curation team gets in touch with clients to decide a range plan for their brand, collect feedback from the industry, suggest modifications and help them finalise a range for products and register the client with various market places. Products manufactured by the client for online sale will be stored at warehouses maintained by Eshopbox. We act as a mediator between market places and brand owners. We also give suggestions to clients on which discounts to participate for increasing the volume of their business through the 'eShopBox insight software'. The eShopBox insight is a real-time dash board view of the client's online business. It provides them information about their merchandise, help them decide the price of the product, help them plan the required stock levels, provide information about the previous lot of products (fabric, colour, category, design, market data about demand of different styles and categories, etc which help in maintaining the quality of products), have date-wise data about discounts on various market places, etc. This enables clients to work on business without wasting time on such information which is readily provided by our software. We have association with online marketplaces like Jabong, Myntra, Flipkart, Snapdeal, Limeroad, Paytm, Amazon, Roposo and others. As on date, we are managing online operations for approximately 100 brands like Duke, Saiesta, Anaphora, San Dee Impex, United Exim, etc.

Online apparel is one of the popular verticals, which along with computers and consumer electronics make up 42 per cent of the total retail e-commerce sales. Some established brands like Arvind are now creating clothing lines just for e-commerce. Foreseeing growth in this sector, investor circle is very positive on putting their investments in this category. Apart from big venture capital firms, there are many small Non-Banking Financial Companies (NBFCs) and investment firms like Pinnacle Group, Capital Float, etc who assist small apparel e-retailers with funds based on their product performance. Their customised financing services suit e-commerce environment, and help merchants and e-retailers in achieving desired volumes. Such kind of easy loans help e-retailers grow their business. They can get funds on hand in almost no time to invest for growth (eg expand production capacity or to pay for raw materials on time).

For the quarter ended December 31, 2015 (FY16), we achieved Q-o-Q revenue growth of 77 per cent with 3-fold YTD growth. We have added 65 new clients in the current financial year, increasing the total client base by 200 per cent. This coupled with 28 per cent increase in average revenue per client is expected to result in 3-fold growth for the company in the current year. Also, the number of orders served per month has increased significantly over previous year. With this growth trend, additions to the client base in later-half of the current year and increasing average revenue per client, the company is conjecturing 5-fold growth in the next financial year. However, the average return rate of 30-35 per cent remains an area of concern for the management, and is expected to be lower than 20 per cent mark in the following financial year. Revenue growth is expected to continue in the medium term at the level witnessed in the recent past with increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics.