Naaptol Online Shopping Pvt Ltd, which started as a comparison-based social shopping portal, changed track to foray into teleshopping and e-commerce to gain more traction. The company leverages various platforms like e-commerce, television and print, and 75 per cent of its business comes from teleshopping while e-commerce contributes the rest.
The firm raised $25 million (Rs 123 crore) lastOctober in a deal led by New Enterprise Associates (NEA). Earlier, it had raised $7 million (Rs 33 crore) from Canaan Partners and Rs 7 crore from Silicon Valley Bank.
Last year, the company also launched Naaptol Club, an exclusive online shopping club for regular consumers. This new platform follows the private sales model and gives up to 80 per cent discount on luxury and fashion brands to its members.
In an exclusive conversation with Techcircle.in, founder and CEO Manu Agarwal, details how naaptol is leveraging its hybrid business model and scaling up operations as it aims to go deep down into existing categories. Here are the excerpts.
Naaptol is into home-shopping business but you didn't start as an e-com portal or a teleshopping platform. What prompted the pivot?
Naaptol is a comparison-based social shopping portal, launched in January 2008. And we aim to make it a one-stop destination for both shoppers and merchants. The initial concept was not to sell directly (like B2C sites do) but to initiate the selling. With the sudden rise in brands and stores who claim to sell the best products at the most reasonable pricing, shoppers simply go crazy as they try and choose the right products. Normally, people do in-depth research on the Net and visit several sites before buying an expensive product. But that can be an extremely tedious task. So we came in as a research and comparison site and featured the merchants' feed.
From mid-2009, quite a few sellers approached us with specific deals and we started promoting certain deals on our site. That's when we realised that it would make sense to start and expand into a whole new shopping site. We use various mediums like TV, print and the Internet, to reach out to a bigger audience.
So was it social e-commerce first and teleshopping later? How much business do you get from e-commerce?
True, it was social e-commerce first, followed by teleshopping. But 75 per cent of our business comes from teleshopping only and the rest from e-commerce.
Do you think teleshopping can be a standalone platform?
People order via television as they do it online. In fact, it's a misconception that teleshopping doesn't sell. One can easily place an order via call centres. Also, print and television are the key mediums to reach out to consumers. These platforms are complementary and effectively support each other.
But is a hybrid model essential to propel growth?
As of now, there is a need for different mediums. But the Internet may soon become a dominant medium and things must change then.
What's your take on e-commerce versus teleshopping? Is it a fair view that teleshopping has lost the race to e-com?
E-commerce is just a part of the entire home-shopping business. It is a mechanism where a consumer visits a site and places an order. But he can do it at his convenience and the categories/options are literally huge. Those who are only focusing on teleshopping and offering limited number of categories are bound to lose.
We heard of logistics playing spoilsport for e-commerce. Is the same true for home-shopping business?
Yes, it is. As of now, teleshopping and e-commerce are the branches of the same tree and both are suffering from the same issue.
What are your monthly transactions and which products sell most on naaptol?
Around this time last year, we were doing 4,000-5,000 transactions per day. This year, it is 8,000- 10,000 on a daily basis.
Unlike most of the teleshopping platforms, we don't deal in medicines or religious products. Here, products like mobile phones, camcorders, laptops and apparels sell the most â€“ across all platforms.
You have raised a substantial amount in multiple rounds of funding. Are you looking at another round of fundraising soon?
Last year, naaptol raised a VC round of $25 million (Rs 123 crore) in an all-cash deal, led by NEA. Our previous investors Canaan Partners andSilicon Valley Bank also took part in that round. We have been spending the fund very meticulously to support naaptol's massive hiring plans. Plus, we are investing in our Internet business, supply chain and inventory to scale up operations. We are cash positive right now and don't intend to raise another round now.
Is there any more business property on the anvil this year?
No, there are no such plans right now. We just want to focus on logistics and want to expand our current portfolio. And customers might get to see some makeover in the e-commerce site.