Building Credibility For Home Shopping Remains A Challenge: HomeShop18 CEO
Network18 Group's consumer retail arm Homeshop18 combines a TV channel and online commerce. Even with a number of competitors coming up in the online channel, the firm recorded a 33 per cent rise in the number of orders executed for the year ended March 2011 with Homeshop 18's revenues rising to Rs 71 crore for the fiscal.
This year, the focus is largely on scaling up the website â€“ Homeshop18.com â€“ into a virtual mall. After the recent re-launch, the site has now added more products and categories for shoppers, including the fast-growing babycare segment. Sundeep Malhotra, CEO, Homeshop18, discusses how online shopping behaviour has changed over the years, the challenge of building credibility for home shopping, the upcoming launch of an online loyalty programme and more.
Can you tell us how HomeShop18 has been scaling up over the past year?
We started as a website delivering flowers and gifts through a toll-free number and a 15-second commercial which was featured on all Network18 channels. That was in 2008 and over the past three years, we have received a tremendous response from customers and continued our growth momentum. We grew 124 per cent in FY10 over FY09 and our revenues increased by 73 per cent in the quarter ended March, 2011, compared to the same quarter in the previous year. I think in spite of today's challenging environment, we have delivered a credible performance both in terms of sales as well as viewership.
What do you think of e-commerce usage in India today, compared to five years ago?
There is a definite change in the shopping habits of consumers. Convenience is becoming vastly important to consumers, given the value of time and infrastructure challenges in our country. Today, over 25 per cent of our shoppers are repeat customers. Also, the internet can be accessed by more people â€“ nearly 60 million Indians are online today, and broadband and data cards are becoming popular. The internet offers price comparison, easy selection of products and, at most times, a price advantage â€“ take electronic goods, for example. Brands are also keen to go online to reach out to more people.
How is HomeShop18 poised, compared to the rest of the e-commerce players?
We are clearly the pioneers and we had launched the first home shopping channel in India. We learnt the business step by step and I believe, we are still in the learning stage. These are still early days in the industry and with new shopping channels coming up, healthy competition, which will bring more credibility to the home shopping business, is rising. However, customers come to HomeShop18 because they like our value proposition, the diversity of products which we sell, the interactive style of our programmes and our brand promise. They enjoy the content on our channel and find the promotional offers exciting. So, that is our USP.
What are the key challenges/hurdles faced by Homeshop18?
Logistics, cash on delivery and reverse logistics are the main challenges. But we counter them with strategies like 15-day money-back guarantee and the choice of payment on product delivery. Our main challenges are bringing about a change in perception and building up credibility for home shopping.
What are the focus areas for investment this year? Is it online or offline?
We are determined to focus on our e-commerce portal this year, taking into account India's projected internet user database of 81 million, according to the Internet world stats.
What are the products which sell most on Homeshop18?
The digital camera category is selling strongly. We account for 4.5 per cent of all digital cameras sold in the country. We are also the leading retailer for mobile phones, non-stick cookware and footwear in India.
How many cities do you cover? Can you share any trend or demographic information regarding the same?
We have logistic footprint in over 3,000 cities and we reach out to more than 50 million households across India through our 24x7 TV channel and e-commerce website combined.
And how many merchants and brands does Homeshop18 have on board?
We sell more than 480 brands and have 150,000 SKUs from reputed brands like HCL, Cannon, Samsung, Whirlpool, IFB, Reebok, Puma, Lee, Sia, Olympus, Peter England, Fab India, Biba, etc. And we have recently introduced a range of kids' products and baby products by partnering with brands like Avent, BSA Toddlers, Barbie, 1st Step, Chicco, Disney, Farlin, Fisher Price, Himalaya, Mamy Poko, Mee Mee, Medela, Nuby, Pampers, Best Lock, Funskool, Hotwheels, Leapfrog, etc.
Why did you add the baby products section, rather than running it as a separate vertical? What are your expectations from this segment, compared to standalone sites like Firstcry.com and Babyoye.com?
The Indian baby care market is very exciting and keeping in mind the comforts of every mother and helping in sharing her responsibilities, we decided to add baby care products and toys. We believe our platform makes it convenient for all kinds of customers to shop from a single platform â€“ HomeShop18.com â€“ for all their requirements. So we did not feel the need to launch a separate site.
What are your plans going forward? What are you working upon?
We are very optimistic about the future of online retailing and home shopping as an industry. Moreover, brands are already counting on us as a key distribution network. Five years down the line, we would like to be regarded as the most credible brand for virtual shopping, be it on the internet, television or mobile. We are now building our loyalty programme and working on other customer-oriented programmes and initiatives.
Are you positioning HomeShop18 as an online mall â€“ a horizontal shopping site? Or do you plan to focus on a specific vertical in the future?
The way we see it, we have crossed all boundaries which dictate shopping behaviour. Almost everything sells on HomeShop18 â€“ from home appliances to jewellery to electronics â€“ keeping a fixed ratio. So, yes, we are a one-stop shop, a virtual mall. This is what we will continue to focus on â€“ a wide range of products, rather than any specific vertical.