US-based start-up India Ecommerce Corporation (IEC), a development-stage company setting up a string of local e-commerce sites including a few group-buying portals, has initiated the process to allow some of its shareholders to sell around 25 per cent stake of the company. This comes as the firm prepares to get its shares quoted on over-the-counter (OTC) Bulletin Board in the USA.
The OTCBB is a quotation medium for subscribing members and OTCBB securities are traded by a community of market makers through a closed computer network, unlike stock exchanges like Nasdaq and NYSE.
IEC was formed by Ashish Badjatia and also counts Rohit Gangwal as a director. Badjatia is currently director operations at MenuExplorer.com Inc, the firm behind goCruso.com, a social networking site related to hospitality business which is in closed Beta testing at present. Gangwal is also the co-founder deal aggregator site GreatDealsIndia.com besides few other firms including an IT services firm Covetus and Vivid Granite.
Badjatia and Gangwal directly own 29 per cent stake each with Shaboom Media, a firm controlled by Andrew Bachman, owning 20 per cent. Bachman is co-Founder and president of online advertising firm Tatto Media and Adapp Solutions, which creates applications for online advertising companies.
Rest of the shares are held by various individual investors including friends and family of the founders. The list includes Christos Manuel, the founder of goCruso.com. Some of them are selling part or all of their holding, as per a regulatory filing in the US for registering the shares of the company.
IEC will earn revenues from commissions on the sale of electronic merchandise as also advertising revenues.
It has begun operations in design, testing and prototype development of products but will need additional financing of at least $1.2 million to implement its business plan through August 31, 2013, in phases. The company intends to raise around $100,000 or more during the second quarter of 2012 from friends and family of its officers and directors through sale of common stock or convertible notes. It had earlier raised $90,000 last March through a similar route.
The company plans to use bulk of this for product design and development of mobile client for iPhone/iPad, Android and Blackberry; marketing and PR; development of product back-end database and application programming interface (API) among other purposes.
The company has planned a mix of group purchasing websites, penny auction sites besides traditional e-commerce sites.
The first of these include a group purchasing site designed for the Indian hospitality sector and another for the real estate market. It has already contacted Indian hotel groups for providing inventory of rooms and vacation packages to sell in the group purchasing format. The company will develop an SMS delivery system to notify consumers. For real estate, it plans to launch a group purchasing site in which investors that do not even know each other can pool their interests in real estate projects around India and buy at a deep discount. It also plans to develop group purchasing sites for automotive industries.
While group buying for hospitality and automobiles sounds interesting, it would be one among several other real estate focused group sites including Groffr among others.
The company is also in the process of developing "penny auction" websites for electronics, mobile phones and the education marketplace. In penny auctions, items are bid up penny-by-penny until no one wants to bid anymore. In the education field, its auctions will allow students to bid on educational material and in the future larger ticket items such as "one year tuition."
Initially, IEC will purchase products that it will list for the auction. However, it is planning to obtain these products and services from vendors as a new method for advertising. The company will deliver a redeemable electronic voucher of the product/service won by the winning visitor. The visitor will need to verify ID and present the voucher for the product/service.
In addition, the company is also going to build what it calls "copycat" websites in popular areas to round out the portfolio of ecommerce websites. This is just a customer attraction tool. Some of these include: (Real Estate Site), (Job Portal), (Matrimonial Site), (Ecommerce Portal) and (Auction Site).
The firm is also searching for acquisitions to jump start its presence in the market.
The company plans to complete the product design and beta test in the fourth quarter of 2012 and launch the commercial version of all websites by the first quarter 2013.