India’s largest virtual shopping destination, HomeShop18 started its business of virtual shopping and pioneered the concept of home shopping in India over six years ago. Today they are India’s first and only 24 hour shopping channel. They offer consumers a wide selection of brands across multiple categories such as books, mobile phones, electronics, apparel, jewelry, home & kitchen, etc. With an explosive growth and multi screen presence the company is today, the only player to be present across all virtual shopping platforms-TV, web and mobile. Sundeep Malhotra, Founder & CEO, HomeShop18 talks about online retail industry in India and main highlights of their e-commerce strategy.
When did HomeShop18 begin its operations? How important is e- commerce?
HomeShop18 was started 6 years ago and since it was a new business model for India, the consumer knowledge did not exist and we had to gather everything from scratch. We wanted to change the legacy of home shopping which had been given a bad name by some previous attempts. In the beginning, there weren’t too many people who believed this was possible but today we have grown exponentially and are a strong team.
The changing consumer sentiment in favour of accessing a wide range of brands and products with minimal physical browsing had made virtual commerce an increasingly preferred shopping trend. To cater to customer needs, we are working with more than 500 top brands selling more than 14 million SKUs across multiple product categories.
What is your assessment about the online retail industry in India?
At HomeShop18, we believe the online retail industry is growing leaps and bounds. A substantial change has been observed in consumer buying behavior with more and more Indians accessing Internet to make purchases online. The increasing use of smartphones, laptops/PCs and growing Internet penetration in Tier II and III cities have led to greater adoption of online retail by the masses. According to an ASSOCHAM paper on “Online Shopping – Review & Outlook in 2013”, India’s e-commerce market was worth $16 billion in 2013 and is expected to touch a whopping $56 billion by 2023 which will be 6.5 per cent of the total retail market. Innovative start-ups and competitively developing businesses have added to the dynamic growth of digital commerce. As a pioneering player with a huge spread across multiple screens – TV, Online and Mobile, HomeShop18 are excited to be a contributor to the evolving story.
The Indian online business environment is now at a stage where the players are aggressively looking at a suitable model to attract maximum customers and brands. The government’s budgetary initiatives to ease virtual retail roadblocks are a further recognition of the economic viability of the industry as a parallel driver of growth in physical retail.
What are the main highlights of your e-commerce strategy?
HomeShop18’s digital commerce strategy that straddles TV, Web and Mobile platforms is heavily based on innovation in integrated commerce that brings an unparalleled virtual shopping experience. Our product and interface innovations are designed to unify and synchronize accessibility across multiple screens. Another critical aspect of our digital retail strategy is achieving service excellence. A happy and satisfied customer is our priority so we are focused towards garnering greater customer engagement by enabling ease of shopping. At HomeShop18, we cater to over 1,20,000 calls per day and ship over 30,000 orders every day. Our customer relationship management team is consistently working with our operations wing to improve service by handling product placement calls, queries and redress complaints, if any, at the earliest. To ease payment options, we have all alternatives from EMIs, COD and card transactions. We are also revamping delivery mechanisms to take our 3000 plus pin code.
The back-end driver of our strategy is a dedicated investment in Data Analytics for insight into consumer behavior. This has enabled us to experiment with portfolio expansion across products and categories, helping us leverage those that cater to higher customer demand. In terms of scope of operations, we are looking to expand deeper into emerging markets in India.
What is the profit ratio? How is this figure going to change in future?
HomeShop18 started as a 24-hour Tele-shopping business, before foraying into e-commerce and mobile as well. With the reach of TV in India being about 8-10 times that of Internet, TV Home Shopping will play the role of mass reach- high volume sales, while the web business will continue to attract the more discerning digital consumer.
TV continues to be our core business with about 75 per cent share, while the balance comes from E-commerce and mobile. We anticipate mobile to show double digit growth and contribute a larger share in our profits over the next couple of years.
How is the overall performance of the brand and are you satisfied with it?
With the e-commerce industry seeing robust growth, we have seen healthy numbers across our e-commerce platform. We entered the m-commerce space in 2013 with the launch of the HomeShop18 app for iOS and Android phones and tablets and will soon be available for Windows devices. The innovative Scan and Shop, a dynamic wall in early 2013 followed by the seamless tablet app, have further garnered us customer traffic in the mobile retail space. Our diverse product portfolio boasts of rich brand presence across categories, including exclusive partnerships with top brands such as Micromax, Spice, Sony, Canon, Reebok, Puma. HomeShop18 has pioneered and evolved industry standards across the digital commerce space. Currently we are focused on consolidating our overall business and brand performance even further and are investing in greater customer–centric activities. We will continue to focus on providing good quality products, at the best price for our customers.
What is the average ticket price online? What kind of items are popular with customers for buying online from your website?
The prices differs across products, categories and brands on offer. But the average prices is around 1500 online and on Tv shopping is around 3000/-
For HomeShop18, the biggest sales drivers have been gadgets, especially mobile phones and accessories. At HomeShop18 we have seen apparel, Home and Décor and other lifestyle categories (beauty, footwear, and health) become fast-growing digital commerce categories. Another unique trend we’ve observed is the substantial increase in high-value purchases. With increasing consumer faith in online transactions, HomeShop18 has witnessed greater sales in expensive Jewelry (gold, diamonds, semi-precious, fashion jewelry) and high-end gadgets over traditionally popular categories in the last few quarters.
At the festive season what exclusive options do you have?
The festive season has always been correlated with shopping amongst Indian consumers. At HomeShop18, we always offer great prices and propositions that truly excite our valuable customers. There are festive discounts on our exclusive brands – especially in jewelry, apparel and appliances. During this year, we have provided our customers with exciting offers like Monsoon offers, Shop and fly offer, Chance to win a trip to Brasil during the football season, etc. Also, this month marks the beginning of the festive season and we are geared up to provide our customers with the best of offers, products and propositions. During the festival months we see exceptional business and this year too we are looking at bringing even more products for our customers.. We are confident that the carefully selected products and propositions will thrill our customers.
Do you think online retail works better for some categories than others?
At HomeShop18, we are seeing healthy growth in all categories. We feel that across categories, digital commerce will continue to grow and co-exist with physical retail. HomeShop18 has seen major traction in categories like mobiles and accessories and we are the second largest retailer of mobile devices today. We have exclusive partnerships with Micromax and Spice for their e-commerce retail. Books, Lifestyle products, apparels and home appliances also do very well on HomeShop18 and have been the traditionally popular categories. In its nascent stages, customers were wary of high value purchases without the touch and feel of physical retail, but with growing customer faith, even categories like expensive Jewelry (gold, diamonds and semi-precious stones) and high-end electronics are also picking steam.
Which brands sell more in metros or tier I and II cities?
Sales in Tier II and III cities mirror those in Metros and Tier I. Brands that hold aspirational value are similar across markets. It’s only the unavailability of certain brands or lack of retail options in some geography that may guide more purchase in certain categories.
What are the measures you have taken to offer a good customer experience on your website?
Our target audience is geographically diverse and widespread from youngsters to homemakers. At HomeShop18, our innovations are designed to cater to the needs of this diverse audience. We have synchronized our offerings across TV, Online and mobile so customers can live stream HomeShop18 TV on the website using their laptops, tablets or mobile phones. We have also added a rich demo video for products. Our research into consumer behaviour has revealed that in the absence of touch and feel of physical retail, holistic product information that pre-empts any query that customers may have is very well appreciated. Another unique highlight of our website is Today’s Special Offer that represents an assortment of unique products offered at a great price just for a single day. Also, during the week we come up with special offers on gadgets, car accessories, home and furnishing, all popular categories amongst HomeShop18 customers.
What are the differences you have spotted in the online shopping behavior of Indians compared to the past? How are they evolving?
One of the biggest changes in behavior among Indians is the growing trust in online shopping. In the absence of touch and feel of physical retail, skepticism was a huge barrier to overcome in order to get people to explore digital commerce in the first place. Books, accessories, beauty and lifestyle products, apparel, small gadgets and mobile accessories were the categories that saw sales. Payment options like card transactions were another leap of faith for many sceptics, without actual checking of the product. Now, at HomeShop18, we have seen huge sales not just in volumes, but across categories as well. Mobile and accessories, Home and Décor, lifestyle and apparel are amongst the most popular categories. We have seen a steep growth in jewellery and sell over 3.5 lac sets in a month.
With the introduction of safe payment options and trust among customers, digital shoppers are coming of age and don’t hesitate in making payments online. HomeShop18.com is witnessing an upward swing in card payments and net banking , with 60% of our business today being non Cash on Delivery. Another interesting trend we’ve observed is the adoption of EMI schemes by online shoppers. Then customers also like features like video demo of products which HomeShop18 provides on its site.
What are the main challenges you face in running e-commerce operations successfully?
At HomeShop18, we consider customer satisfaction as the bedrock of our business. So our primary challenge is to ensure we keep raising the bar for industry standards. Ensuring a flawless customer relations set-up, while not quite a challenge because of our well-trained staff, requires consistent efforts to maintain quality standards. Managing the last mile delivery, especially where local infrastructure is lacking is another business challenge, as it makes the costs of providing a satisfactory service to our consumer very high.
Over the past 2 years, what are the changes that you have made in your operations?
Innovation is the cornerstone of our business. Apart from offering the latest front-end technological innovations, we at HomeShop18 believe that the key to deliver an unparalleled customer experience is through state-of-the-art back-end technologies. We have invested capital and manpower in this field to build next generation back-end systems. Our operations are aligned to give the best possible virtual shopping experience to our customers, so we are focusing on powerful warehouse management, auto order management systems and fulfillment systems using the best IT solutions in the industry. We are also taking insights from Data Analytics to boost operations, especially in divisions that show us better customer traction. After TV and online, Homeshop18 is the only player that has set up a separate unit for m-commerce operations as well. Based on our research and customer feedback, we have also beefed-up our customer relationship management initiatives.
How do you promote product awareness and prompt its target audience into buying its product?
Our research has shown that consumers appreciate interface innovations that bring them as close to the virtual product as possible. Some of our innovations that are driving enhanced product awareness are:
Rich demo videos, Live stream of HomeShop18 TV on website through laptops, tablets and mobile, Mobile apps for iOS, Android and Windows applications; Tablet Apps to tap consumers across screens
At captive audience points like airport lounges, we have experimented with a mobile interactive wall – Scan N Shop based on bar code scanning through your mobiles as you browse 10 dynamic LED screens at the same time with personalized product recommendations.
Customised recommendations are an important feature on both our online and mobile platforms to enhance purchase by our target audience. We’ve also launched a TVC to highlight the ease of shopping that HomeShop18 offers across TV, Mobile and Internet with the idea – Shopping makes me happy.
The recent Union Budget and its impact on the virtual shopping industry/ecommerce
We welcome the decision of Uniform GST and tax measures that will play a crucial role to make e-commerce a success story in India. The move will certainly simplify the tax structure and make India one single common market by rationalizing the supply chain and thereby, offering better value. Also, the importance given to rural infrastructure will ease pressure and allow faster movement of goods. We hope to see a continued growth in both e-commerce and m-commerce with the Government looking at launching broadband connectivity across the country.
According to you, what is the future of Indian e-commerce business? And how does HomeShop18 plan to evolve in it?
As a long-term perspective, at HomeShop18, we feel, the future lies in consolidation. We see the industry consolidating into 2-3 major horizontal e-retailers (with multi-category play) and 2-3 verticals that specialize in certain product lines.
As a pioneering player that has seen the industry grow and change, we are poised to shape future growth by evolving with multi-category retail. Having established a strong business in Teleshopping, we have seen our e-commerce business also show robust growth. Our foray into m-commerce last year has made us the only multi-category player, able to leverage strengths across our business verticals. We now plan to strengthen our stake in the integrated digital commerce sector. At HomeShop18, we are thus streamlining and making shopping experience easy by launching multi-screen synchronization interface.