Not just another online store!
Date: Wednesday , April 04, 2012
Browse click and buy… can shopping clothes get that simple? The booming e-commerce business in the country testifies that it is. But is it worth it? The answer varies person to person. While some are quite ecstatic with what is delivered to them while some feel cheated and are angered by what they receive. The key to shopping online is to identify a reliable company that time and again proves that it is a source to be trusted. However with the web spread with thousands of e-commerce portals, how does one make the choice?
2009 founded Yebhi.com, may come across as one among these e-commerce portals, but it is not. Process oriented and technologically adept, Yebhi.com is striving very hard to provide an unparallel e-commerce experience to the customers and in a span of few years of its operations it has managed to achieve it successfully. From clothes, shoes, accessories, products for life style and home décor to mobiles and appliances, Yebhi.com has emerged as a one stop shop for a shopper’s every need, guaranteeing quality products from a wide variety of reputed national and international brands. With the a strong backing of about $10 million funding from Nexus Venture Partners and Catamaran Ventures, the company today is selling close to three products a minute to consumers across Tier I, II & III cities. And driving this game is Manmohan Agarwal, who had earlier struck gold with the famed BigShoeBazaar.com.
From shoes to apparels - the steady rise
In 2005, a time when the e-commerce was yet to take the country by waves, Agarwal had taken a dive into entrepreneurship with a bizarre idea of selling shoes online. Beings of a traditional mindset, Indian consumers prefer to go to a physical store, try out the products, get the touch and feel of it before making the purchase. For consumers such as this, buying shoes online was a very far fetched idea and for many the entire idea was crazy. Also it was quite a herculean task to persuade supplier brands to partner with them and sell their products (shoes) online. Though, outside India several companies had built a successful online business of selling shoes, in India this was the first of its kind and it took him over six months to persuade the some of the brands to do business with them. As they say, “Slow and steady wins the race”, Agarwal eventually succeeded in creating a reliable and trustworthy online shoe portal. The humble start with shoes has today grown into Yebhi.com — a multi-category portal with over 250 brands spread over products like shoes, apparel, products for home décor & lifestyle, electronics, sunglasses, fragrances, bags, accessories, appliances and much more.
So what is the secret to the success? With a prior stint as the CEO of supermarket chain, Vishal Retail, Agarwal had hands on experience in setting retail stores across 110 cities in India which sold apparels, groceries, and electronics. Of all the products sold, he saw that apparels and lifestyle products brought in the maximum profit margin of about 50 percent as compared to mobiles and electronic appliances which brought a profit margin of not more than 5-10 percent. The stint at Vishal Retail also helped him understand buying patterns, preferences and psyche of customers across different regions. Hence, when he started his own entrepreneurial venture it was no surprise that he decided to go with retailing online and focus on apparels starting with shoes.
“When it comes to business model, there is not much that is different from one e-commerce portal to another. However, the differentiation lies in how you do the business. Most portals try to woo customers by trying to offer as many things as they can while not paying much attention to the process of procurement, quality of products or the distribution channel,” Agarwal says. “At Yebhi, our plan has always been to take things one step at a time, perfect it and then move to the next. We started with selling shoes online and spent a lot of time in getting the best brands out there, and perfecting our processes — from procurement to delivery to customers. A lot of thought and effort has gone into removing the kinks from the processes that we follow. Once we felt that we had perfected our shoe business, we explored other product categories for the business, which again we added one by one over a span of few months,” he adds. Today, Yebhi.com has grown as one of the top e-commerce portals in the softline category.
Striking right chords with customers
It is no secret that the only way to create successful online business empire is by creating the best customer experience which starts right from the moment a customer visits the website. Aggarwal and team have built the website that is easy to use and navigate through. Since, online purchase does not allow the luxury of having the touch and feel of the product, it is important to mask that need by providing the best way to examine the product. From high quality pictures of the product from different angles to in-depth description of it with regards to the style, the material, texture, available sizes and more, Yebhi.com provides exhaustive information about the product. This is augmented with a 24/7 customer support service.
From the moment an order is placed, the company ensures that the products are shipped out from the office in about 90 minutes at the max and delivered with in 24 hours across India. If an order is a specialty item, then the delivery is made not later than 2-3 days of the day of order, the status of which is updated to the customer by the company’s contact center. This apart the company also follows the customers to return the policy if the product is unsatisfactory which is either replaced by the company or else the customer is offered cash back or provided with Yebhi’s gift vouchers of the same amount. The idea is that the customer by no means feels cheated or disappointed.
To have a seamless service such as this needs a well thought out operational process that ensures no hiccups come along the way. For instance, many a times while shopping online, the customer orders for a product of certain colour, pattern or size. But when the company goes to procure it from the vendor, it realizes that the particular product is out of stock or completely sold out. Going back and informing the customer of the unavailability is a sure shot way of getting into their wrong book. To avoid such miscommunication, the company follows the principle of “BUY FIRST & SELL LATER”, in order to ensure the latest and quality product offerings to its customers. Agarwal has built a modest warehouse of 100,000 sqft in Gurgaon where keeping in tune with the latest fashion trends, substantial amount of products across all categories are procured and stored before selling it to the end consumer. This apart, most brands usually see online stores as a venue to sell the stock surplus which means, the customer is probably buying goods that is perhaps 2-3 fashion seasons old. With the policy of “BUY FIRST & SELL LATER”, it ensures that the customers get products that are in vogue with current times and same as what they would get fresh off the brand’s store shelf. This is probably the most significant process that enhances Yebhi’s credibility and enables the company to maintain high quality standards and a perfect fulfillment ratio.
Automating Operations for Accurate Services
This understanding of a customer psyche perhaps comes from the Agarwal’s stint as former CEO of Vishal Retail, a nationwide supermarket chain. During his tenure there, he opened up stores totaling to about two million square feet in 110 cities. And in the tough quarters of 2008, when retail chains in India felt the heat of the economic downturn, he helped Vishal Retail consolidate its backend — reducing 10 million sq. ft. warehouse space down to as low as 400,000 sq. ft. It is this rich experience in retail made Agarwal aggressively to focus and create a robust backend process and operational platform. A lot of time in the initial years was spent to create proprietary technology in-house and come up with a system that is high in quality but low in cost. “What we have done is similar to what Kiva Systems did which was later acquired by Amazon. The entire process from the time of order to the shipment has been automated and is done with no human labor involved,” explains Agarwal. The backend such as the inventory is in sync with frontend that is the website, so the information on products available is updated real time.
When a customer places an order from anywhere in the country, the 24x7 call center approves the order. All the pre-paid orders are auto verified along with the COD orders, if placed by an old customer. If it is a first time customer ordering on COD basis, then the customer is called to verify the order details, explain the mechanism of COD and re-verify the delivery address, post which the order is approved.
The state-of-the-art process that Yebhi has developed in the dispatch section ensures that 99 percent of the orders from a single customer get combined and consolidated. This means that is a customer has ordered four products in one part there is a 99 percent chance that he/she will receive all the four products in one single package, which is a very unique ability that no other e-commerce in the world has been able to produce yet. This has become possible for two reasons, one that the company has a single warehouse and the other, the systems have been installed at the shipping area order consolidation without compromising on the time. The entire process from placement of order to billing and shipping takes not more than 90 minutes.
But how do you ensure the same efficiency is followed in the delivery process as well? There are chances that the packages are lost or delivered in a damaged condition or later than when it was promised to the buyer. Agarwal, putting a lot of thought on this pain point, decided not to rely on a sole service provider. The company has identified the leading courier and delivery services across the regions and formed a tie up with them. The services used vary from private courier services like Blue Dart to government services like India Post. Apart from these services, the company has also built its own delivery network termed Yebhi Logistics that is used to deliver products across major cities. When a product is ready to be shipped out, depending on the address, the system is programmed to automatically select the service provider that has the strongest presence in the area. Several of the courier services have a small hub set with in the premise of Yebhi to further cut down on the time and orders are shipped out directly. Today about 40 percent of the orders are delivered through Yebhi Logistics and the rest through other channels.
Driving Customer Loyalty
The core differentiator of Yebhi.com is its standardized quality deliverables, which are so influential, that they have been enhancing the credibility of the overall Indian eCommerce eco system over and over. “At Yebhi, the procurement and merchandising of a product is very similar to what a physical retailer would do and that’s how the team is structured, that’s how the planning and buying happens which I think was not there when we started,” Agarwal explains. “The early e-commerce companies thought of their business more like that of a tech company than that as a merchandising business, leaving the merchandising on the vendor who did not control the discounting and any uniformity in the catalogue. That is the difference we tried to bring on to the table, a complete controlled experience on to the merchandise and assortment which is same to the physical retail pricing and season planning, so if the first season is going on, we will have all the branded merchandising which will be on full prices or as the same prices that walk-in retails would have,” he adds.
When Sushma Sharma, a college student from a small town in Madhya Pradesh, wanted to update her wardrobe keeping in mind the fashion trends she was seeing in movies, it was quite a challenge for her. Coming from a tier III city, there were no stores of big brands in the area. Someone told her about Yebhi.com. The large variety of footwear, t-shirts, shirts, jeans, bags, clutches and other fashion accessories bowled her over and it was quite easy to place her order, especially with the cash on delivery option. She was quite ecstatic to receive her orders with in two days.
“The idea is to bring to the consumers of tier II and III with the same scope of buying products that perhaps they never had an opportunity to do so, mostly because of the lack of physical stores of big brands in their city,” says Agarwal.
Additionally, to give consumers a hassle free buying experience, Yebhi provides multiple payment options like online payment, netbanking and cash on delivery (COD). One has to understand that still a majority of Indians, especially in tier II & III cities are not used to plastic money and COD is the favored option from them, he states. This is why big orders by customers are followed up with a call from the customer service to ensure both the company and customer is on the same page. This apart, the 30 day return policy also allows the customers to have a certain amount of trust ad confidence in us.
It reports about eight percent returns of purchased goods that come about from a liberal 30-day exchange period. "I have instructed my customer care people not to ask the customer why he/she wants to return a product," says Agarwal.
Today, the company has seen a very sharp progress in business as compared to other e-commerce sites, with over 45 percent customers being woman who mostly come from Tier II & III cities. Looking at the general demography of the customers which is disposable consumer demography, internet demography, the way it is shaping up and projected to shape up, e-commerce is becoming an alternate space for retail available, which has an ability to talk to the entire India at the same point of time.
Today, in order to increase its engagement with its customers, the company has begun to recruit B-school graduates across the country who act as an alternate point of contact for Yebhi customers. These graduates known as Yebhi Champs act as the customer relationship manager and ensure they have a hassle free experience.
"We live in a digital age where everyone is quite vocal about their thoughts on various forums like Facebook, Twitter or other social platforms. There are more chances of a person venting out his unfavorable experiences on these platforms than a favorable one. And for any business, especially it e-commerce it is the word of mouth publicity that works wonders.
Hence, we are leaving no stones unturned to ensure a memorable experience for customers so that they keep coming back to us," says Agarwal.
To bring the experience to a new level, the company is attempting leverage the use of technology to the maximum. For example, it is currently attempting to integrate technology in such a way that a customer is able to track his or her parcel on the real time basis on Google Maps. Further more, it hopes to provide the customers with information like with the photo of the person who will be making the delivery at their doorstep. In the past one month, customers are known to have developed a kind of personal relationship with Yebhi Champs such that they now hardly call the contact center.
The growth and beyond
With more than 200,000 units being delivered every month now, Yebhi’s business has grown five fold in 2011. In June 2010, Yebhi received its first round of funding of $2 million and in April 2011, it closed a Series B funding of $8 million. At present, Agarwal is very close to winning the next round of funding. When compared to other e-commerce sites that have raised whooping amount of funds, these small round of fund raised by Yebhi proves that the company is three to four times more capital efficient than anybody else in the space. So far the company has stuck to the conventional online marketing technique; 2012 will see some very innovative marketing techniques that Agarwal has up his sleeve. The opportunity in the future looks very bright, for in the last year itself the company has grown to 1400 people.
The e-commerce sector is enjoying the best growth margin. Despite of the fact that it is an early stage business, Yebhi has been known to create a valuable experience for customer today, a proof of which is the lowest goods return rate that it has in the industry. For its brand loyalty, the company has already won several accolades and awards. In 2010, Yebhi won the best e-retailer award from Economic Times, and in the past few months it won three awards including the award for being the best home and lifestyle e-retailer from by UTV and Franchise India. In fact, it was recognized for this award over several major e-commerce players of India including Flipkart, Snapdeal, Myntra, DealandYou, and FashionandYou.
With many VC firms eager to invest in e-commerce companies, Agarwal’s legacy in retail coupled with his first over advantage in Indian e-commerce, Yebhi’s position in the industry and its future is indeed promising. For Agarwal he has put his best foot forward!