India is the fastest-growing e-commerce market and is expected to reach US$ 188 billion by 2025. The growth of the online segment can be attributed to our increasing dependency on smartphones for professional networking and personal requirements, easy availability of cost effective handsets, easy and interest free finance options for high cost handset purchase, low cost data and online availability of leading brands across tier 2 and 3 locations. It is estimated that the number of consumers who purchase online will cross 100 million by this year compared to 69 million users making online purchase in 2016.
Yerha.com, an inventory led e-commerce platform, brings exclusive handpicked gadgets to the Indian consumers on their site. The company is now looking at raising around INR 20 crore and are in talks with several VC, Private Equity and Angel Investors for a mix of debt based and equity based funding.
Manish Joshi of NewsBarons provides excerpts of an interaction with Mani Kant Jain, CEO of Yerha.com who informed ‘When it comes to e-commerce, all countries follow similar path but at different pace’.
NB: What is your outlook for e-commerce market in India.?
Mani Kant: China is the largest market for e-commerce globally, followed by the US. But it is India that is the fastest-growing e-commerce market. India has had its advantages in e-commerce. India entered the e-commerce market post 2010 when the GDP was showing healthy growth and disposable income was on the rise. When it comes to e-commerce, all countries follow similar path but at different pace. In India, the pace has been faster with users getting comfortable buying clothes and footwear more easily than they did in other countries.
With a share of 47 percent, Electronics is the largest segment in e-commerce in India and is expected to grow at a CAGR of 43 percent by 2020.
We believe, at present, the e-commerce growth potential looks promising. There will be a point in time when entities will consolidate, expand or close but with majority of India not being online, there is a still a huge untapped market.
NB: How do you differentiate yourself from other e-commerce platforms?
Mani Kant: We are very different from other leading online platforms such as Amazon and Flipkart. We bring those exclusive products to the doorstep of customers which are not available anywhere in India. Our end user proposition is not based on offers and discounts but through product innovation and consumer delight. We are serving a different need in the market which is quite opposite to the daily need being fulfilled by giants like Amazon and Flipkart.
Our current portfolio has an average growth rate of 30% Y-O-Y.
NB: What were the market challenges in your segment?
Mani Kant: Educating the masses about new innovations and bringing those niche products to Indian markets was a tough job. The operational challenges were to reach and deliver products to the interior regions of India. Another challenging area was to automate processes and key operations with our in-house technology solutions.
NB: What is your geographical presence and expansion plans?
Mani Kant: At present, we operate across India catering to metros and Tier 1 & 2 cities. We also have strong plans to further expand our existing product portfolio ranging from Mobile, Mobile Accessories, Smart Home Automation to Home Décor & Lifestyle. Our 5 year plan is to achieve the INR 100 crore mark.
NB: Explain your marketing strategy?
Mani Kant: We rely a lot on content and word of mouth promotion. Our strategy has been to educate our audience about our product lines and creating a category for the same. This is a wholesome approach and comes full circle with our exclusive licensed contracts. Simultaneously, we have created an ecosystem to safe guard our consumer’s interest with 1 year replacement warranties, easy returns policies and centralized customer care centers.
NB: How has been the response from Tier 2 and 3 locations?
Mani Kant: Contrary to our expectations, the response from Tier 2 and 3 cities has been overwhelming. Tier 2 cities contribute nearly 50% of our total sales & the rest is from Tier 1 & Tier 3 cities respectively.