'India's eCommerce market is very exciting'

Intrasoft Technologies is a company that owns and operates 123Stores, an online eCommerce retailer, whose products at present are available to customers from the US and Canada only, and also an online greeting cards firm, called 123Greetings.com.

While India is booming in eCommerce, with online shopping growing at a steady pace, Intrasoft Technologies is closely watching the developments. In an interview to Furquan Moharkan of Deccan Herald, the company’s Managing Director Arvind Kajaria hints at having an interest in entering the Indian market, stating that the country’s eCommerce space is very exciting, and has picked up.

How did this idea of online retail come to you?

Traditionally, we have been in the greeting cards business. When we were doing that, we wanted to get into the shifting space. So eCommerce was a natural extension of what we were doing. So that is how we got into it.

How difficult was this transition for you?

I would say that this was not an easy transition. Because, apart from the consumer, nothing in the back-end is common. We had to build a new back-end all over again, and the mindset was completely different. So, that took a lot of time, effort and the learning curve was very steep. The whole company orientation had to go through a major change.
How has the recent surge of online retail impacted your business?

In the surge of anything new, lot of people want to get it. They feel that this will be the area they will succeed in, initially. I think we are still in that phase where more and more people are coming in, and the competition is increasing. So we are left with no option but to give more add-on benefits to customers and spend more on marketing. It has impacted our bottom line too. And this is going to happen for quite some time to come, and there is no way out of it.

How has the increased internet penetration impacted your business?

The increased Internet penetration means more consumer base, especially in the cities that don’t have large departmental stores that stock many different things. Because of the eCommerce boom, I think, Indian consumers living in much smaller cities and towns have access to a much larger product basket. That has been the biggest benefit of increased Internet penetration.

What about your business segmentation?

We are not particularly operating in that segment. We focus on selling various goods ranging from furniture, electronic goods to sports goods. We believe that larger the base, the better it is. So consumer is our focus.

Tell us about your relationship with Amazon and Ebay?

For Amazon and Ebay, we act like shops in a mall. The footfall comes to the mall. We don’t conduct activities to attract the footfall. And this footfall is amortised over hundreds of shops that operate in this space. So in a nutshell, these sites act as a selling platform for us.

How much of your sales is generating from these two sites?

Approximately, it is 75 per cent. Basically, a majority of our revenues is generated from them.

How do you use analytics to understand clients better?

Analytics is very important. It helps us decide the frequency at which the products are selling. It helps us determine the best pricing point and also in logistic details.

What are the other tools that you use to understand clients?

We use the parts purchase method, and concept of cross sell and up sell to sell our products.

Can you elaborate on your business model?

We are primarily focussed on the US market. All our vendors and clients are based in the US. India is our back-end, pretty much like a software company.

Any plans of starting on-shore inIndia?

India is an exciting market. ECommerce seems to have picked up. So, as soon as we think that it is financially feasible for us to enter the Indian market, we will do it. We don’t have a timeline for it. We want the market to develop a little more. Once the quantum becomes larger, then only it is profitable for us to enter the market.

Any plans of fund raising in the near future?

We will need some funds in time to come. The board is yet to take a decision on it. So we can’t provide any deadline on that.