Meet the folks who really RUN E-COMMERCE
Behind The Scenes Are Small Startups Slicing & Dicing Data
To Keep E-tailers Selling
Four days after Ankit Mahesh wari spent Rs 70,000 on a coffee
machine, he got an email from the e-commerce site offering a 25% discount on
the same gadget. “I was so angry . I returned the product and bought it again
at the discounted price,“ says Maheshwari.
Apart from getting a good deal, it made him realise that
e-commerce companies had poor marketing channels. He started Betaout, an
e-commerce service company that provides targeted marketing for online
marketplaces. And the same website that gave him the idea is now one of his
clients.
The growth of online marketplaces and e-commerce in India has
spawned the need for companies that provide tools for marketing, logistics,
search, cataloguing, analysing customer behavior and more. These e-commerce
service companies are making their money by helping online retailers make
theirs -and data shows that the number of such companies in India is second
only to that in the US. According to data analytics firm, Tracxn, there are 258
Indian startups in this space and in 2015, more than $280 million was pumped
into them.
Pune-based e-commerce solutions provider Shoptimize started out
in 2013 by building websites for offline merchants. They soon realised that the
merchants needed more than just an e-commerce platform, and now provide
end-to-end services, including marketing and merchandising, says co-founder
Mangesh Panditrao. Betaout, which works with 160 online companies, including
Lenskart, and Paytm, has reduced marketing costs by 20% to 45% for clients.
Shopclues is an e-commerce company that works with 10 smaller
start pany that works with 10 smaller startups, which help it optimize its
business. “As they do this across e-commerce companies, they bring in
expertise. So we can work on what we do best and leave other functions to
them,“ says Utkarsh Biradar, vice-president of products, Shopclues. Biradar's
own payment company, Momoe, was acquired by Shopclues earlier this year.
Intelligence Node, a Mumbai-based retail analytics startup,
works with 75 e-commerce companies by tracking about 1 billion products across
1,100 retail categories. “We look at the external scenario and help the
companies strategise on their pricing,“ says Sanjeev Sularia, who started the
venture in 2012 with Yasen Dimitrov.
Most of these enablers follow a SaaS (software as a service)
pricing model, where a company pays only for the services used. Biradar says
that most clients think twice before signing up if the cost is mentioned up
front. If the service is completed and successful and you see the results, you
pay .
“If you tell a company that you can improve website performance,
they don't understand. But if we say costs could reduce significantly, they get
it,“ says Shoptimize's Panditrao.
LOOKING
TO THE WORLD
Many of these companies are looking towards building a global client
base.“The possibilities of mergers and acquisitions happening in the industry
is minimal, and the product has to be international for the company to have a
chance to get acquired,“ says Karthik Reddy, managing partner of Blume
Ventures, which has invested in Dataweave, a Bengaluru-based company that works
with online marketplaces and retail brands to help them determine strategies
for pricing, selection and promotions.
Dataweave gets 55% of its revenue from India but is looking to
diversify .Co-founder Karthik Bettadapura says, “Many US brands are launching
in India through online platforms and are looking to get insights about the
Indian market.“ He says cracking the US market is crucial to grow.
Intelligence Node has 90% of its customer base in India, with
sales offices in US and UK. Around 40% of Betaout's customers are outside
India, and contribute to 35% of its revenues.
BEHIND
THE US
In terms of the total number of companies founded, India remains
second or third to the US ecosystem. However, the gap between them remains
wide. For instance, in the marketing space, the total number of US startups is
131, compared to India's 42.This widening gap could be attributed to the fact
that the amount of investment on R&D and technology infrastructure by the
e-commerce companies is limited.
According to Sanjay Parthasarathy , co-founder of Indix, which
collects and refines product information, e-commerce companies and brands used
investments to acquire customers and build operations. “However, the attitude
is changing but the rate of investment infrastructure needs to be greater,“ he
says.
Reddy says that unlike in the past Indian startups are looking
at foreign markets in their early stages of growth. “Earlier, we used to see
startups looking at the US market after three years. Now, they are going to the
US as soon as the product is ready ,“ he says.
Shalina Pillai & Anand J
TNN
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