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Expecting E-Retail to Cross the 30% Growth Mark in 2018

मार्च, २०१८

CFO Insights on Innovation

Radhika Aggarwal, Chief Business Officer & Co-Founder, ShopClues

What are your views on the current Indian e-commerce landscape? Do you foresee further consolidation in Indian e-commerce?

We are living in very interesting times. The sector is growing and is poised for phenomenal growth in 2018. Internet penetration is on the rise but more importantly, availability of budget smartphones with cheap data is going to drive internet consumption beyond metropolitan cities and tier 2 cities. As for e-commerce, the sector is benefitting both from the internet/mobile penetration as well as government’s drive for digital payment. While we did see a drop in transactions in the 1st quarter of 2017 due to demonetization, e-retail still grew at around 27%. I am expecting e-retail to cross the 30% growth mark in 2018.

By 2016, a lot of consolidations in the sector have taken place. While it is unlikely for any major consolidations to take place in 2018, I won’t be surprised if there are strategic partnerships.

How viable are private labels for Indian e-commerce players? Are these profitable in the long term?

In the marketplace ecosystem, there is a growing demand for private and exclusive labels, particularly in certain categories. For us at ShopClues, exclusive labels are growing at over 10% of total business. For private/exclusive labels to be viable, one has to look at competitive price points without compromising on quality.

Profitable, yes they are, but one needs to cater to a segment where there is demand for the product. I would like to reiterate once again, it will be price points without compromising on quality.

With recent initiatives by the government on improving ease of doing business and favorable ecosystem for startups, do you see more foreign investments coming in?

Investment sentiments in the country are rather positive. We are witnessing a healthy economic growth and we have seen substantial investment made by Venture Capital firms in 2017 in our ecosystem. Investors are always looking for good investment and the ecosystem in India is poised to receive more funds in 2018.

What do you think are going to be the key growth areas for ShopClues going forward?

Lifestyle. The segment is contributing to almost 50% of our business. Within lifestyle, fashion as a segment will be registering a robust growth. Moreover, we will also be focusing on our exclusive labels, across lifestyle and wired (electronics) categories. 

What is ShopClues’ growth strategy? Are you looking to build sustainable competitive advantage through acquisitions or by building internal capabilities?

As we always say, we are the preferred marketplace for Bharat. No other online marketplace has the kind of reach we have or products catering to Bharat. We cater to over 32,000 pincodes. 70% of our sellers are from Tier 2 &3 cities. Most of our consumers reside in Tier 3 & 4 towns and beyond. Our thrust area will be to grow our business in Tier 3, 4 and beyond and for that we will be scaling up our internal capabilities.  

What are your capital requirements in the next 1-2 years? Do you plan to tap the capital markets or will you consider VC/PE investors?

We are always looking for smart money. That’s all I can say at this point.

Your recommendation as an e-commerce entrepreneur: what are the three things that a startup should consider while raising funds in this sector?

Sounds clichéd, but

  1. Have a supporting Co-founder

  2. Know the market of your product

  3. Differentiation

Opinions expressed in the article are the author’s own.