According to a recent study by Nielsen, Jabong has Net Promoter Score (NPS) of 73 per cent. What initiatives did you take to reach this landmark figure ?
We strongly believe in customer centricity and service. Our current NPS helps to prove this point. Sustainability is definitely a subject of focus now. For now, we are looking at two things, improving and improvising our in terms of whatever we are doing and also look for ways to innovate; secondly, further scaling up the services we were first to introduce like exchange of items, tracking of delivery through Google app, etc., and offering cash refunds.We wish to maintain the services that we started and it would be coupled with various innovations including supply chain to further fortify our fashion positioning. We are also constantly aiming at bringing new brands, Indian and international on board to offer to our customers.
Are you planning your dedicated supply chain?
Not as of now. We have strategic partners to fill the gap in terms of supply chain. Presently, we have more than 10 service providers with us.There are lots of similarities in the way telecom and e-commerce sectors grew. We plan to evolve just as the telecom sector did, where everybody started building their towers, and then major companies stepped in to consolidate the market.Similarly in the e-commerce sector, supply chain as a shared infrastructure. Either a third party will emerge that would try to cater everyone or exiting players will try to build their capabilities around it and take the business from captive supply chain partners.It is like roadways or railways. It does not make any sense to have dedicated and captive railway tracks. It should be utilised by as many people as possible. This approach will yield returns faster and it will be easy to maintain and keep up the infrastructure and also manage the variability in demand, e.g peak management if it’s a shared resource. This phenomenon is followed globally, so there is no reason why India should lag behind.However, the challenge would be finding the right kind of independent partners and maintain the sustainability in providing quality service at effective costs. There is no reason to stop individual players from becoming scalable. Moreover, players such as Javas, Ecom Express and Delivery, are performing quite well. Also, big players like Blue Dart, Gati, and DHL have started their dedicated service for e-commerce players.
There is news that Jabong is possibly planning a merger with international e-commerce mammoth Amazon. Your comments on this.
Jabong is currently in the process of being part of the Global Fashion Group.
Will there be any fresh round of funding for Jabong?
We have strong support from existing investors as well as good interest from a fresh set of inventors. Presently, our focus is on forming the Global Fashion Group (GFG).Despite enormous funding, major e-tailers have failed to reach the break-even point. How does Jabong fare in this aspect? Yes, it is true that none of the big e-commerce companies have been able to achieve their break-even point. The journey to profitability would take time. It would not be right to state the numbers but it would happen for sure. This is because e-commerce might be new to India but globally it is already a proven business model.Irrespective of how much money you pump in, it requires a certain amount of size and time in order to become profitable. Globally, there are many instances where companies have taken 7 to 10 years in becoming profitable, which were more than 15 billion in size. Also, a lot depends on the company’s strategy in achieving the break-even point. After all, the e-commerce sector is growing at a rate of 200 to 300 per cent, and it is wise to focus on growth rather than just gaining profits. One can either focus on keep growing or just becoming profitable.
Is Jabong planning its offline store in near future? What is your perspective on hybrid retailing omni-channel presence?
Our current focus is not on hybrid model. For an offline player to move online is the next stage of development, but for an online player to move offline does not make that strong case.In an online medium, you have to reach out to at least 10,000 to 15,000 pin codes, and as per hybrid model you have to mark your offline presence to all these pin codes, which is quite not possible to achieve practically. To adopt a hybrid model approach is only feasible in selective cities.However, there is a generation which still believes in offline experience – something that is good to build the brand. However, brands can be built online as well.
Does Jabong consider Myntra as its competition, as both e-tailers want to fortify their positioning in the fashion segment?
Jabong is a dedicated fashion destination. There are many other players in the market. We were able to carve a niche because of our varied assortments, service level and curation of exclusive brands.
How much of your revenue share comes from m-commerce?
Mobile and site contributes to 45-50 per cent revenues. With such figures in the year gone by, we are hopeful for a brighter future in the year 2015