BigShoeBazaar.com eCommerce in Footwear Retail Date:   Wednesday , December 30, 2009 When Danish Ahmed, son of a footwear exporter, tried liquidating some blocked inventory on Rediff and eBay, he was surprised at the demand for quality footwear and that too over the Internet. Being a resident of Kanpur, Ahmed had often seen his family members travel to Delhi to purchase footwear and felt the need for a solution that could fill this gap and unlock business in the Indian footwear market. The experience on Rediff and eBay proved that there were customers in India who were willing to buy shoes online and that such a demand could be met. Targeting the Rs. 25,000 crore ($5billion) footwear market, Ahmed, in 2007, founded BigShoeBazaar.com, India’s first online shoe store. The Indian retail market is expected to be about Rs 1,330,000 crore, growing 10.8 percent per year. Of this the organized retail was estimated to be only 5.9 percent, Rs. 78,300 crore, but the modern retail segment has grown at tremendously since 2007 at 42.4 percent per year. By 2010, the organized retail is expected to touch Rs 230,000 crore, constituting roughly 13 percent of the total retail market in India. With an innovative blend of E-commerce (B2C) and Franchisee – Retailer Distribution (B2B – OWC&C) model, BigShoeBazaar wants to target this segment and bring together demand and supply to enable business. “India is a vast country with cities and towns every hundred kilometers. With thousands of cities and a billion consumers, it is impossible for any brand to reach out to each customer base with its products. At the same time, with growing global exposure consumers are asking for better products and demanding popular brands. The generation that spent its life in a hawai chappal has been replaced by one which has shoes for every occasion,” says Manmohan Agarwal, Director, Bigshoebazaar.com. To prove this point, Bigshoebazaar.com regularly ships its products to Onshore Drilling Sites, Tea Estates, Coffee Estates, Mining Sites, Shipyards where there is large worker population but no access to lifestyle or branded products. There is therefore an immense amount of business that can be unlocked by giving supply to this highly potential underserved market. That is precisely what Bigshoebazaar does. It enables suppliers to reach buyers and it does that through three mediums. Ecommerce – Through ecommerce the company is able to reach out to consumers across the countries who want to buy good quality products, which are either, not available in their area, or which they don’t have time to purchase. BigShoeBazaar.com has shipped shoes of over 70 brands to more than 1000 cities in India. Retail – Small and Medium cities in India are serviced by multibrand footwear outlets (MBO). Such MBO’s are unorganized retail outlets, which provide the customer a limited range of products in a traditional retail environment. None of the large footwear chains are entering into this market, and for brands to open their own stores in such cities is not feasible. Through its multibrand retail outlets, the company is filling this gap in the country by providing customers with a large variety of branded footwear, in a modern retail format. Online Wholesale Cash and Carry – Bigshoebazaar not only enables customers to shop online, it also enables shoe storeowners to shop online for their merchandise. By doing so, it enables brands to reach out to retailers beyond serviceable area, and retailers to procure their products without traveling to supplier hubs. “The two most important aspects of our business are suppliers and customers. Those are the two areas we focus most on. Bigshoebazaar is not an ordinary retail company which is out to make money by squeezing suppliers and misleading consumers. We are looking at both as partners, and that perspective enables us to give a very different experience to both of them,” explains Rajul Jain, Director, BigShoeBazaar. The company not only sells branded footwear on its website but also enable the ‘brands’ to develop or convert their website into active eCommerce website. “We are also enabling existing footwear brands / companies to own their e-commerce portals. We build and operate the portal in terms of Technology Platform/ Backend Operations/ Supply Chain / Payment Gateway Management/ Customer Experience Management and more. Currently we are managing redtape.com for RedTape and Lotto too is about to go live with their e-commerce portal. The entire service comes at extremely lowest capital expenditure by Brands and bulk of our revenue is from sharing profits from sale. We tie our success very closely to success of the brands that we partner with,” Nitin Agarwal, Director, Bigshoebazaar says. We have been associated with Bigshoebazaar for nearly two years now and are very happy with our partnership with them. In the first year, the business had not been much but this year it has been pretty phenomenal and we have seen a very good response from customers. The team at Bigshoebazaar has been very supportive and is constantly finding new ways to help increase our business,” says Shuja Mirza, Vice Chairman, RedTape. Lalit Kishore, MD, Lotto has recently partnered with the company for an e-commerce portal. “I had quite heard about the company and theirs is a never seen before innovative service in India. We are quite looking forward to leverage our business and get closer to our customers with them,” says he. Today, Adidas has already signed up and there are over a dozen major footwear players who are in the process of signing up for their ecommerce website in the next 3 months, in partnership with Bigshoebazaar. The footwear industry would be the first retail industry in India to embrace ecommerce in such a major way and Agarwal and his team is playing a critical role in that. “It is this perspective of ‘creating winning partnerships’ that make us different. As a company, we are not looking for the cheapest supplier of products so that we can earn the highest profits. We are looking for deserving partners — small and large players who have the ambition to become a major player in the national footwear industry,” Agarwal says. The company has the same approach towards its customers too. Today, 40 percent of its purchases are from returning customers and the rest are through referrals. Its focus is on giving each customer a service, which makes him say ‘WOW’. Mohammad Tabrez from Chennai has been using Bigshoebazaar.com for about six months now and has ordered nearly 70 pairs of shoes till date. “Initially, I was a bit skeptical about how it would be but the entire purchasing experience was very pleasant. I was especially impressed with their delivery. I was told that my order would be delivered in seven days but I actually got the products in three days. I work for an MNC and I love the portal. Now almost my entire team purchases their footwear from BigShoeBazaar,” he says. Another happy consumer is M Patil who says, “I came to know about the portal from a friend of mine, I have made a couple of purchases from it and the service has been satisfactory and on time with no hassles with regards to payment. Whether it is replacing an order or refunding money, the procedure is not stressful at all. Also every customer has a relationship manager who guides you through the entire procedure, making you shopping worthwhile,” he explains. Also, Bigshoebazaar has a zero rupee advertising budget. “Still a major challenge for us is to make people believe that this can happen but this is changing slowly. It is our customers who are getting us new customers and as a company we are constantly looking at ways to engage them more deeply with us,” he adds. The Team Though Ahmed started the company in Kanpur, it now operates from New Delhi with a 50 people team. Also in an advent to take the company to the next level, in July 2009, it was reformed with three new co-founders joining the board. In July team also raised a seed funding from United States and Singapore. The company now has four co-promoters — Danish Ahmed, the original founder of the company; Manmohan Agarwal, veteran retailer whose last appointment was as CEO of Vishal Mega Mart; Nitin Agarwal, IIT graduate and serial entrepreneur who joined Bigshoebazaar as his second company after successfully creating and exiting Brainvisa Learning Solutions and Rajul Jain, IIT graduate and ex-Vice President of Indiabulls Real Estate. The company is now based out of Greater Kailash, New Delhi and brings together a team of 50 people. With the new team, Bigshoebazaar stands as one of the best retail companies in India in terms of management bandwidth. The Road Ahead With its focus on small and medium cities, BigShoeBazaar is opening up new markets for the industry, unlocking demand and enabling business. The footwear industry today stands at $5 billion growing at 20%per annum. Today, in U.S. about 13 percent of footwear is sold over Internet and Zappos.com, the industry leader successfully churns a billion dollar sales every year. Having already grown 9 times in revenue since July, the group would be looking to raise a substantial capital in near future to accelerate its growth in 2010. “In India, the larger challenge would be to grow with an unorganized industry, into an organized, more efficient organization. This has already started happening and we are happy to see our company playing an important role in it. The fantastic thing about Bigshoebazaar is that we have the capability to not only create the demand for suppliers, but also to enable them on a technology level, to service this demand. So the challenge would come because of us, and would be solved by us, enabling a more efficient and faster growing footwear industry,” says Agarwal. Ecommerce is the future of retail and distribution in India. There is no other solution to a country as large as ours. There is only one medium that can reach out to 60000 shoe stores and 1 billion consumers and that is ecommerce. The last 10 years have seen the retail industry come up in India, the next 10 years would see ecommerce become a critical enabler to business. The largest retail store would be an ecommerce player and the largest distributor would be an e-distributor. BigShoeBazaar with its simple yet three-step model is at the crest of this large e-retail wave.