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India e-commerce: then, now and future

Posted by Chad O'Connor  April 4, 2013 11:00 AM

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[Editor's Note: TiE Boston, an organization founded in 1997 by the legendary Desh Deshpande and other Indian entrepreneurs in New England, is the very active Boston chapter of a global non-profit organization that promotes entrepreneurship. TiE Challenge 2013, a free accelerator program offering startup-entrepreneurs visibility, mentoring, and the opportunity to present to “TiE-Angels” for investments of up to $1M, is accepting applications through April 7 April 15, 2013.]


We recently caught up with Divyan Gupta (divyan [AT] keshiha [DOT] com), Founder and CEO of Keshiha Services Pvt. Ltd., a New Delhi (India) based niche e-commerce company, to find out the latest on how e-commerce is changing in India...

For readers who might not be familiar, tell us a bit about Keshiha and your e-commerce brands.
Sure. Keshiha Services is an e-commerce company focusing on niche verticals. We have 2 e-commerce brands, Art and Decors which is India’s first curated e-commerce brand for luxurious and affordable fine art, chic decors and designer jewelry all in one place. We encourage customers to create customized products & are also one of the few e-commerce companies in India that service customers from all over the world. We are all about fantastic design oriented products that are easily affordable.

Our 2nd offering is Gizmofashion - again a curated e-commerce brand for top-of-the line accessories for smartphones, tablets, laptops, cameras, gaming systems and much more from some of the leading global brands like Canon, 3M, Targus, Parrot, Zik and others.

Keshiha Services is also part of the Amity Innovation Incubator and are proud to be associated with the Amity Art Foundation to help them commercialize art of their upcoming young artists. Art is a very important product vertical for us at Art and Decors as we want to promote art appreciation and acquisition amongst young Indians & global collectors and help make quality art accessible to all.

In 2012 you wrote about India’s sizzling e-commerce industry and what’s next. What are your current thoughts?
The industry has gone through some change since that article got published. We are hardly seeing any new ventures getting funded. Follow on rounds are taking place but playing out slowly. Companies are struggling for capital. Those that got funded are employing some very efficient means to evaporate it by still offering unsustainable discounts & other fulfillment related decisions. We still see companies giving crazy rebates. That damages the entire industry as consumers become ‘price loyal’ rather than ‘brand loyal’. We are also seeing investors’ driving consolidation between portfolio companies to try save their investments. Exits are more on the 7-8 year horizon than 4-5 years.

Why do you think that is happening?
E-commerce in India is an industry that will take time to mature and it’s best to have a long term vision about this just like you would for any ‘traditional business’. We see more ‘me-too’ businesses- whether that’s a copy from an Indian business or from some other part of the world. You are not leading. You are following and that is usually not a sustainable business strategy unless of course you can use that as an initial platform and then introduce some innovation and differentiate the business. You have to build up a customer base and invest in systems, processes and team. However nothing good will come if you don’t build a fantastic product experience and a very responsive customer service team. Once you have scale, you start optimizing the business and improving on things that make the difference. For companies that don’t have deep pockets they can still play the game by focusing on intelligently building scale over time.

What are some of the main challenges impacting the Indian e-commerce industry today?
There is a dearth of great business augmenting service providers- whether that’s in marketing or web development. There is still a long way to catch-up in terms of sophistication when you compare with markets like the US or even UK. Logistics is still one of the biggest challenges. The service providers are trying to address these but there are still issues with service quality and responsiveness. 2013 is probably going to be a defining year for not only e-commerce companies but for the overall ecosystem. We will likely see strong businesses emerge in both categories- e-commerce companies and service providers as they build on the learnings from the past year.

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