Rewind to the year 2000 – the fag end of the dot com boom. Just before it all went bust, husband and wife duo, Dinesh and Minal Vazirani were brave enough to create a web portal for alternative lifestyle needs in India. Planet Saffron, as it was called then, was an umbrella brand that encompassed four sub-categories –Saffron Soul, Saffron Art, Saffron Space and Saffron Style. “Once the dot com bust happened, we realised that it was very difficult to build four separate brands, despite a crossover of customers from one category to another,” says Dinesh Vazirani, founder and chief executive. The founders decided to focus on an area that they knew best – auctioning art. In the period between 2000 and 2003, the founders went all out conducting exhibitions at prominent international locations such as Hong Kong, London, Singapore and various destinations across the U.S. in a bid to showcase their art collection to interested buyers. The objective was to build confidence in the quality of the company’s offering, thereby building business, especially amongst the Indian diaspora. “There came a time when we had overspent to an extent where we had to make a hard decision on whether we wanted to stay in business. But, every entrepreneur has a certain resistance to failure. So, we gave it one final push and quite magically, things fell in place,” reminisces Vazirani. Thus, was reborn Mumbai-based Saffronart in the year 2004.
What was timely for the business was the rise of the Indian economy as with it rose the purchasing power of the average Indian to buy art. Leveraging from the strategic exhibitions held offline; the founders drove traffic to their newly established portal. Vazirani says that the company has always had great belief in the ‘click and brick’ business model, where there is a balance between online and offline strategy. “Our exhibitions helped break the mental barrier towards online purchase. Customers had the opportunity to meet the team and see for themselves our ability to deliver top-notch quality and this confidence translated online as well,” says Vazirani. In his opinion, the online and offline components feed off each other. For instance, when the website was established, Saffronart also set up an art gallery in Mumbai that showcased its collections. While the initial focus was on art, today, Saffronart is also involved in selling other lifestyle products from jewellery to real estate.
Vazirani believes that experience holds the key to inspire repeat purchases online. And that experience can only be enhanced through technology. “Given the nature of art, it is important to replicate the touch and feel aspects as much as the digital medium will allow. Since the beginning, we decided never to compromise on technology, for instance, we do not upload pictures of a low resolution. The higher the resolution, the more realistic it is for the customer,” says Vazirani. Saffronart also worked at building an image databank with a historical reference on prices to help customers make an informed choice. “Most e-commerce portals do not mention prices, but, by publishing prices we show a transparency of process that customers appreciate,” adds Vazirani.
Even as the founding duo thought out the operational details, funding was another aspect that needed to be addressed. Vazirani says, “Money was a problem when there was no belief in the platform. Once our art auctions ramped up, finding funding became much easier.” Saffronart received a first round of funding to the tune of U.S$ 1 million in the year 2001. These funds were used towards the initial round of exhibitions and building technology. “In the initial years, we borrowed from banks to bootstrap the business,” says Vazirani. In its second round of funding in 2007, Saffronart received U.S. $ 12 million from venture capital firms Sequoia Capital and Bare Capital. In the same year, the company also established its second art gallery in New York. The third gallery opened in London the next year.
Keeping it dynamic
Vazirani strongly believes that Saffronart’s success is driven by the fact that the company always seeks to transform the markets it works in. It has also built a loyal customer base through continuous interaction by way of updates, newsletters, mailers and catalogues.
Keeping with the changing markets, Saffronart has always made a foray into new markets when the timing seemed right. And one of the newest markets it has chosen to explore is real estate. Saffronart aims at selling exclusive properties that match its niche clientele. When asked on what Saffronart’s differentiator is when compared to other players in this industry, Vazirani says, “The Indian real estate industry lacks in transparency and presentation when compared with global standards we are looking to match.”
Looking to the future, Vazirani says, “India has a rich history of over 5000 years, so, we will definitely look at moving into any cultural segment that holds a connect.” He also believes that Indians these days are looking at avenues to invest in their culture and this augurs well for Saffronart. Talking numbers, Vazirani presents an optimistic picture – his outlook for product sales at the close of the current financial year is about U.S. $ 40 million for the categories of art and fine jewellery. He signs off with this, “Five years from now, I hope to see Saffronart being the largest auction house for art in Asia and perhaps, the world.”