The pioneer of Indian e-commerce Date:   Thursday , October 06, 2011 The title of the father of e-commerce in India sits lightly on K Vaitheeswaran, the entrepreneur who founded Indiaplaza, India’s first online shopping company in 1999 and since then has been single-handedly championing the cause of the Indian e-commerce industry. Today when there is a new founded enthusiasm on e-commerce and everyone from bright-eyed entrepreneurs to over excited investors are going ga-ga over online shopping, Vaithee (as he is popularly known to everyone) is satisfied with a “I knew this all along” gleam in his eye. Ask him what is unique about Indiaplaza and he says ‘It is the only Indian online shopping company to have been in business since the last millennium!” Ask him further whether being referred to as the “father of Indian e-commerce” makes him feel old and his response is: “The best way to gain respect and credibility in any industry is to spend a lot of time in that area and also grow old. I have managed both successfully. Interestingly, we are in a business that is primarily targeted at the younger audience so the trick is to think like them.” Vaithee fell in love with the web in general and e-commerce in particular in 1996. He was at that time working on an internal project in Wipro and someone told him to log on to the internet to get some information. Within 24 hours of his first foray on the web, Vaithee was hooked and one of his unforgettable experiences was clicking on a banner ad on Yahoo! for a company called amazon.com which was selling books online. So, when he got a chance to co-found Fabmart.com – India’s first online shopping company he threw all caution to the winds and jumped at it. Vaithee graduated as an electronics engineer from the Government College of Engineering in Tirunelveli (Madurai Kamaraj University) in 1985. He worked for four years in a two year old company Murugappa Electronics (part of the Murugappa Group) in business development and entered the IT industry when he joined Wipro in 1989 when it was still less than $ 10 million by sales. He says the hallmark of his career is that he has always preferred to join small and lesser known companies because you can do a lot more in such firms. Why did you choose to throw up a good career in a fast growing company like Wipro and get into e-commerce? In life, you come across opportunities that can happen only once – like the internet. It is for us to either allow the opportunity to pass by or do something with it. After all, what is the worst thing that can happen – things do not work out and you can always go back to a job somewhere. How important is entrepreneurship in driving the economy of a country and why do so few people become one? An atmosphere and ecosystem that drives risk taking and entrepreneurship is one of the most critical factors for creating jobs in any economy and must be encouraged at all times. I also believe that most corporate executives are keen on becoming entrepreneurs but don’t take the plunge because the stigma of failure in India is very high. Unfortunately, if one cannot take the risk of failure then it is not possible to be an entrepreneur. Given that your e-commerce venture in 1999 was the first of its kind, what kind of research or market survey did you undertake before you launched your company? None at all! Market surveys can only be done for products or services that are reasonably well known or mature. We certainly could not have gone to customers who had never probably heard of online shopping before and ask them if they would do shop online? It would have been an unfair question and an irrelevant response. In case of green field ventures the key thing is to follow the heart and not the mind. Any research would have shown us that e-commerce will not have much of a prospect. But my heart told me that this will be a billion dollar industry in the future so we just took the plunge. You think your company was ahead of its times? In retrospect, yes maybe around 8-10 years ahead of time. Having said this, we have no regrets, you cannot time these things to perfection in any case and over the past 12 years we have learnt so much about online shopping and consumer behaviour. This learning will stand us in good stead in the coming years. You are one of the few e-commerce entrepreneurs to have survived the 1999-2000 dotcom bust. How did you manage this? First of all, let me clarify. We have survived not one but two boom and bust cycles. The first was the dot com bust in 2000. We learnt a hard lesson then – that e-commerce in India, contrary to our expectations, was not going to be a 100 meter dash but a long marathon. So we focused on building internal systems and processes, expanding reach and selection of products on the site and surviving the difficult phase. In fact, one strategy we adopted to survive was to launch the Fabmall offline chain of grocery stores. It kept the business going and more importantly allowed us to stay alive and fight another day. That business was scaling quite well when it was acquired by the Aditya Birla Group and the Fabmall stores have since been rebranded as More. What has changed in e-commerce today as compared to 1999? For starters, the number of people on the internet in India was less than 3 million in 1999 but today that number is around 60 million. Most of these 60 million web users are also comfortable with paying utility bills online, internet banking, online booking of air and train tickets so the comfort with the medium is much higher and security concerns of transacting online have also reduced significantly. There’s lot of talk about the soaring and unrealistic valuations of e-commerce companies, do you think there is a bubble in the making? There are two key points here. At a business level, e-commerce is seeing the kind of scale and growth I personally visualized in 1999 and this growth will continue for years to come. However, the issue seems to be that a few investors are valuing e-commerce companies at very unrealistic levels which cannot be sustained at all. So, I am afraid a bubble may be in the making and if valuations soar at the current rate, things could come to a head in 6-9 months. What are your other interests apart from e-commerce? My biggest interest is cricket. I am a keen follower of the game and for a while, I was also a registered umpire at the KSCA (Karnataka State Cricket Association). I also read a lot, especially fiction.