When Bangalore-based Manoj Agarwal (right in the above picture) and Sumit Khandelwal (left in the picture) were brainstorming on business ideas, a social gifting company (later named Giftxoxo) was the undebatable solution. Why? Manoj had handled the gifting category as part of his marketing role at Flipkart, while Sumit had worked in the international gifting scenario (Wipro consumer care).
They mulled over doing something unique and hit upon the idea of experiences as a gifting option. After a lot of pivoting and iterations, Giftxoxo was incepted in 2012.
In an exclusive to IOS, Manoj shares the ecommerce journey of capitalizing on the gifting fever.
IOS: Did you start off with experience gifting?
Manoj: No. We started off selling the obvious choices for gifts like flower bouquets, cakes, lifestyle goods etc. We sourced these according to the location of demand. But we faced some difficulty in reaching out to our target markets and getting funds.
Also we realised product gifting is not a sustainable business as many people were doing the same thing. To bring some differentiation, we launched the concept of Experience gifting.
We started focusing on gift vouchers to expand and that worked for us. We are currently one of the top sellers of Experiences and Gift Vouchers in India.
Some of the experiences offered by Giftxoxo:
And your revenues are?
Around Rs 3 crore per month from both our B2B and B2C customers.
We process around 20000 orders per month.
How did you tackle the difficulty of reaching out to target markets?
We want to reach out to 20-40 year old men and women living in the metros and cities. To break the inertia of experience gifting, as most people are not very familiar with the concept, we run multiple awareness campaigns to voice our propositions. Through a mix of brand alliances, social media, SEO and SEM, we are trying to reach out to the relevant brand.
When did you think of exploring marketplaces?
We started selling through our own platform itself because we wanted to build the brand to establish customer connect and trust. This also gave us easy learnings to test the market, make quick changes in offering and iterate. Once we saw good demand through our website, we started approaching some relevant marketplaces. This gave us additional visibility, reach and sales. We are today active on some of the major marketplaces like Amazon, Shopclues, Paytm, websites like FNP, Giftease etc. Overall we are listed in more than 50 websites and over 50 rewards catalogs and company intranet portals.
Which is more profitable – Store or marketplace?
Although marketplaces do give us good returns, our own store brings in more margins.
According to you, which is a good ecommerce portal in India today, from a customer and seller point of view?
I would say Amazon is doing pretty well on both fronts.
Has your model of operation changed?
Yes, now we work on a hybrid model.
We keep inventory for some fast moving products and source it on demand for some.
Compared to a marketplace, what are the challenges in running your own online store?
Being in the service industry, in which most things are manual, automation of processes is the biggest challenge we face. This hampers timelines and efficiency, but we are trying some new tech integrations to address this issue.
Technology plays a key role and we need to have a solid in-house tech team. We need to put a lot of thought in enhancing the user experience and user interface.
Awareness is another issue we have to deal with. Experience gifting is a relatively new concept in India and we are leveraging on various marketing channels to address this.
What are the marketing channels you use?
In the digital space, we are exploring all the options. So far Facebook has given decent results to us.
Also, we participate in various exhibitions and conferences to showcase our products. Corporate conferences are a good place to meet the decision makers from the B2B space and it has proven quite effective for us.
Manoj feels their decision to stop the product business and focus only on experience gifting and gift vouchers was the biggest turning point in their business. With close to 50 employees and 3 offices currently, seems like Manoj is right!