The obvious points must first be put on the table. And while we are at it, let’s arrange them neatly and logically; the points — both claimed and inferred.

  • You’ve probably heard this countless times. Shopclues is different from the other e-commerce players in India, the likes of Flipkart, Amazon, and Snapdeal. That Shopclues is the flea market of the country because it sells primarily to the other India — the India which lives in Tier two, three and four cities and towns.
  • You’ve probably not heard this before, but somehow have always felt it to be true. That 60% and upwards of whatever Shopclues sells is on Cash on Delivery (COD). Customers that Shopclues caters to like to deal in cash.  
  • More than four weeks into it, you know this part pretty well. On 8 November, the Government of India declared 86% of the country’s currency as illegal tender. Ever since, across the country, there’s been a scramble for both exchanging and conserving currency.
  • Post the government’s demonetisation exercise, e-commerce players, the likes of Flipkart and Amazon have had it rough. COD orders have been returned because people didn’t have enough legal tender to pay up. On its part, these e-commerce companies have been encouraging shoppers to pay online. Of course, behaviour doesn’t change overnight and that’s how this story goes.
  • Shopclues is an important company. It is a Unicorn; last January, it was valued at $1.1 billion.

There you have it. The table; the pointers arranged neatly.

Now, at this point, a few pertinent questions must be asked. Whatever is happening at Shopclues? They must have been hit pretty hard by demonetisation, right? How are they coping? What’s it looking like, inside?

We asked around. To people, who are usually in the know of such things. And all we got was an eerie silence. Nobody seemed to know anything. The more questions we asked, the more curious they became. So, we dug deeper.

Calm before the storm

Shopclues was doing okay. Not spectacular but okay. The company clocked just north of Rs 200 crore in gross merchandise value (GMV) in October. But then came the 8 November announcement. The CEO, Sanjay Sethi, stuck to the popular line and praised the move. But acknowledged a drop in orders. At an event organised by VC Circle, he said: “We saw a drop of 7-8% in sales (in the days following demonetization) but things are stabilizing now.” He also added that “our business from smaller towns and cities has seen a 15% increase”.

Wow. That’s any e-commerce company’s cashless, wet dream. Of course, it is a good line to toe but should be looked at with a healthy dose of skepticism.