Vivek Gaur had given up on India e-commerce story once. As one of the founding members in 2007 of Bagittoday.com, one of the earliest online shopping websites from the India Today Group, Gaur tried everything from flash-sales to a marketplace model. But nothing really clicked. So Gaur eventually moved on a couple of years later.
Having just turned 40, he still had it in him to try something big. Like setting up an e-commerce site, again. But he knew the time was not right. So, he waited. A year later, in 2011, he got together with his IIM batchmate Anand Jadhav and brother-in-law Sandeep Sharma to start YepMe.com, an online-only fashion brand.
Today, after five years of churn and burn, Gaur, as YepMe’s CEO, is turning back the clock and conventional wisdom to take YepMe offline. In a way, he’s once again giving up on the e-commerce dream, albeit only partially. He’s got company though, as many niche e-commerce players like Lenskart, Urban Ladder, Pepperfry and Firstcry are doing the same.
From opening its first flagship store in January this year, YepMe is now on a roll to create a network of flagship and franchise stores across the country. But not everybody is convinced offline is the way forward, especially investors. Ironically, neither is everybody convinced pure online retail business can become profitable in the near future, especially those running the businesses and taking the brunt.
So what gives?
It all comes down to numbers. India has about 40-65 million online buyers, depending on who you ask. This is the target market for all e-commerce companies, be it niche ones like YepMe or mass ones like Flipkart and Amazon. This customer base is growing, but at a pace far from what is required to sustain these companies. None of the e-commerce players have been able to become really profitable so far. Revenues are growing, sure. But are they making money?
The offline hypothesis
Gaur’s first coup was getting Bollywood superstar Shahrukh Khan to endorse his relatively unknown brand. Using an informal set of connections tracing back to him and Khan having studied in neighboring schools in Delhi at about the same time, he somehow swung the endorsement. “He was interested in e-commerce business and asked us about what we were trying to do, and what would we do if it didn’t work out,” says Gaur.