When I first spoke to 28 year old Ashutosh Valani from Ahmedabad and asked him, “So you are an online seller what do you sell?” he said “You name it and we sell it”. I guess that pushed us to do this interview and understand all about online selling from Ashutosh’s point of view! Read on….
Let’s start from the beginning. Tell me your story!
In the later part of 2010, my partner, Kunjan Chauhan, over a cup of coffee and casual conversation stumbled over the idea of creating a deals website. Even though the awareness back then on anything to do with ecommerce was low, we felt it was something that was going to catch up soon in future. So we started aajkiitem.com as a daily deals site across many product categories. We did not run behind Venture Capitalists or Funding as all we wanted to do was get customers good deals and make some money ourselves in the bargain.
By 2012 ecommerce was the talk of town, and we also shifted focus of making it big by selling our deals and products on other sites. We are glad we jumped into the bandwagon at the right time.
So to say, a lot can happen over coffee! Tell me which products did you start selling initially?
Any product below Rs.500! Even now we are one of the biggest players in the market when it comes to products in any category that is usually at this price value. We made nearly 1000-1500 sales a day across segments like Fashion, Apparel, Electronics, Accessories, Mobile accessories, Kitchen Appliances, Home Appliances, Car & Automobile accessories etc… We basically were catering to the Accessory market.
Were there hiccups?
Even though people say we got into online selling just in time, we feel we were early. Not everyone had good internet broadband speed, not everyone trusted buying things online. I know a lot of people who were apprehensive of sharing credit card details back then. All of this of course affected our business too.
You said you deal with multiple categories, but what do you focus on and how do you balance?
We look at seasonal trends and figure out what customers are looking for at a particular point and invest in those products. For example, in winters, we know that people will be looking out for sweaters, shawls and warm clothing. Our team prepares a catalog to add in these products and we end up going to market places with good deals on these products, whereas on other occasions we change our focus to something else.
How do you manage with multiple products, inventory, out-of-stock issues etc?
We used to face a lot of problems and sometimes still do. It becomes difficult for every single product that comes in and goes out to be bar coded, especially because some products really cannot be given the attention and time it needs because of its price and the sales we get. For example we sell 5000 pieces of a particular screwdriver in a week and we cannot keep a live inventory or even sometimes a track on what is going where!
Yes, it has come about time that things get more organized and we are trying to bring in technology to solve our problems soon. I am sure integrating with software will help managing our inventory in a much better way than what we are doing right now.
Do you operate through marketplaces and your own store now? How do you balance? In the coming years, do you see yourself stocking products in different marketplaces as well as your website or only your website?
Honestly, the sales on our website have gone down. And we are not pushing it either because of the complementing sales elsewhere. Sites like Snapdeal, Shopclues, Tradus, seemed to be making losses on our products. So basically we were not even getting our costs covered for a while.
We have now become smart! We have two separate sets of product catalogs. One that goes up exclusively on our website and will not move into the market places until a first run is completed on our own website or in case of dead-stock, and the second set of products is always ready for the market places. This way we are able to make selling at both places more profitable.
Which is the best e-commerce portal in India today? What is the marketplace that gives you best business?
All sites have different segments, what I sell on Shopclues, I cannot sell on Snapdeal. And what sells on Snapdeal has difficulty moving on Flipkart. And what I sell on Flipkart, is difficult for me to sell on Ebay or Tradus. So to say they are all out there in the same market but the target customers are all different.
Customers may not believe it but ask a seller and he will tell you the same thing. Price comparison is similar across these sites especially of Mobile phones and Laptops. 50% of their online sales revenue is also from these segments. That is why a customer can compare the prices and feel they are all similar. Amazon claims to have 1.5 crore products. So apart from these mobiles and laptops there are so many other products that need to compete with those in other market places. These other products are the key differentiator among these marketplaces.
Some sites have kitchen appliances moving fast, while others will have mobile accessories selling like hot cakes. Since we sell products from different categories, we pick the right sites to plug in the right products.
So I don’t think there is much of a Marketing activity from your end. How do you deal with competition?
Yes it is true for you to say that. We almost do not get into any marketing activities, mainly because we are quite blessed with the markets coming to us rather than us chasing the customers. Even marketplaces call us themselves. Because of our competitive prices, thanks to the quantity we deal with as well as our advantage of having the first mover advantage, we are in a good place.
Yes, there is competition, but that only makes things more challenging and keeps us motivated to do better.
How do you think the Indian online seller community is shaping up? What is the effect on the offline community?
Indian Online Selling has just started! It is bound to grow BIG and no one can beg to differ. Offline unfortunately, in my opinion is going to perish soon. Either they need to get onto selling online, or sustain losses. A small boutique selling only fashion apparel and accessories would eventually fade away as they will find it extremely difficult to match with Myntra’s or Jabong’s vast choice, great pricing options, Cash on Delivery options and much much more.
Isn’t ‘going niche’ the trend today? How do you justify that it’s better to invest in multiple categories like you do?
I don’t think so. In India there is no Niche! There is cut throat competition everywhere. If it is too niche how will that business make any significant revenue? When someone says ‘niche’ I want to ask him or her what is ‘so niche’ about that segment?
Players like Lenskart & Zivame are doing well in the niche segment don’t you think? They have also been recently funded….
Yes, they could do really well. But the vendors on these sites also sell on other sites such as Myntra, Flipkart and Snapdeal. While niche sites may find it really difficult to sustain losses, a bigger player like Snapdeal or Flipkart can handle better losses. Eventually, the niche sites will only house expensive and tope end products, to sustain in the market and that is not all what the customers want today. But if that is where they see a potential, I wish them the very best!
What has been your mantra for growth? You have laid a solid foundation for your business. What are your future plans?
Things have worked out smooth, with zero marketing budget a small company like ours has now launched a new brand of mobile handsets in the market called Alpha Mobiles exclusively with Snapdeal. This in itself is a great success story for us to have seen ourselves grow. We want to further invest in such segments and drive more revenue from our own private brand and make a name in the market.
WOW! Usually this is where we end conversations but I am intrigued with this interesting mention! Tell me how did this happen?
We realized that there is so much of a potential in the market and more space for new brands. We already have an understanding of what customers (target audience) are already looking for and instead of finding another product at a good deal, we went about making it ourselves!
Great! Again you capitalized on your advantage! How did this business catch up?
We launched our first handset model called Alpha Feather on Snapdeal and within the 1st week we had sold about 2000 pieces! We have now launched a new model, ‘Alpha Buddy’ this month. It is a Rs. 799 handset with WhatsApp, Facebook, Camera, Radio, Wireless Bluetooth and Torch integrated within! This is what our TG wants and we are here to serve them. We are selling it everywhere now. I was just informed that another lot (2000-5000) is sold out!
Ashutosh, we will let you go now and handle your business lest you run ‘out-of-stock’ with your products doing so well! Wishing you tons of good luck and hoping that you always delight your customers with great deals!