eYantra, the corporate gifting company founded by Phani R. Narayanam, is working towards consolidating its forward and backward integration exercises and gearing up for an IPO two to three years from now
For Phani R. Narayanam, founder of eYantra, a leading corporate gifting company that began operations in 2001, one of the goals has been to make eYantra the catalyst that would consolidate the market and encourage more entrepreneurs to enter the corporate gifting segment for the long haul. “The market is still fairly unorganised and it will take at least a couple of decades to transform,” he says. This is not Phani’s first interview with The Smart CEO. He spoke to us in June 2011, when he spoke about how he stumbled upon the idea for a venture like eYantra and the various strategies he adopted over the past decade. In this story, we aim to capture the progress the company has made over the last year or so.
Building on its strength
For eYantra, over the last one year, the focus has been on growing the top line. Its revenues grew by 37 percent last year and is expected to touch Rs. 100 crore this financial year with a target to cross Rs. 125 crore in FY 2014. The number of employees has increased by 21 per cent (365 employees currently), the company has added three new service verticals and its market share has expanded by 20 per cent. This growth is slower than expected due to market conditions, but Phani expects a spurt as conditions improves.
One of the key decisions eYantra had taken was to build its own facility of 50,000 sq. ft. in Hyderabad, with manufacturing, warehousing, office space and recreational amenities for employees such as a badminton court, all under one roof. The facility can be expanded to 90,000 sq. ft. It had signed up with channel partners in 20 Tier II and Tier III cities and expects to expand to 50 by 2013, as per its original target. It also expects to meet its goal of establishing partnerships with over 5,000 to 7000 entrepreneurs over the next five to seven years. These entrepreneurs will sell gifting solutions under their own brand name, and source the products from eYantra.
“As a company grows, it has to constantly innovate and build capacities and do backward and forward integrations,” opines Phani. He believes this integration has given them better control of production and the flexibility to increase or decrease production according to demand, experiment with more design-related innovations and overall, service the client better.
Last year, the company took a slew of initiatives like building brand alliances, getting IGC (International Gift Council) fulfillment capabilities, implementing key account management processes and expanding geographically, all of which have been critical to its growth.
Brand alliances – eYantra has tied up with brands like Arvind Brands, Cross Pens, Swiss Military, Belkin, LG, Samsung, Nokia etc., exclusively for the B2B markets, and to distribute their products institutionally.
IGC fulfillment – The Netherlands-based IGC has one company per country as a member, and works out global contracts with multinational companies. eYantra is the exclusive partner for India and aided by this partnership, the company expects its global business to grow over the next few years.
Key account management process – eYantra has implemented this for its top 50 clients wherein it will assign a dedicated account manager and executive to serve these clients. For each of these clients, eYantra will understand the people operations of the whole company, across divisions, and suggest ways to sell more merchandise. These are prominent clients from various sectors including DELL, Dr. Reddy’s and Essar Energy, among others. Since these companies have many divisions and each one of them works independently, eYantra will undertake the responsibility to connect to all divisions and explain the advantages of merchandising, map each division with its key stakeholder and design branding programs for them.
Expanding geographically – eYantra plans to open two more branches – in Jaipur and Ahmedabad. This is in addition to its current nine branches in Hyderabad, Mumbai, Bengaluru, Chennai, Pune, Kolkata, Delhi, Noida and Gurgaon.
eYantra, which had raised a total of U.S. $10 million from Chennai-based Ventureast in 2008 and US-based Argonaut Ventures in 2010, is not looking for any more funding in the near future. “Our immediate growth will be funded through internal accruals and with the money we raised couple of years ago. Maybe in a year’s time, we will look at another round of funding,” he adds.
The focus area for eYantra is to further consolidate its leadership position in the market along with setting higher growth rates for next year, build the various divisions into strong businesses and ideally look for an IPO in next two to three years. The road map would be to constantly build on these objectives along with a set of new improvements such as a dedicated website for the B2B market that the company is planning to implement.
eYantra has made headway in the rewards and recognition space (where companies reward employees for their performance), where it has managed to build a pipeline of clients and a social performance recognition tool, which it implements for its clients. The tool helps encourage bonding between the employees and the company. It’s a reward and recognition tool which helps companies reward their employees better, track their spends, effectively see the utilisation of such programmes and connect with employees better. It has many other features, which can be customised depending on client needs. “We are also going to do a complete branding exercise for the solution very soon,” adds Phani.
Additionally, the company is also looking at an acquisition in the rewards and recognition space. Phani is also excited about the possibility of bidding for global contracts through IGC. eYantra is expecting to grow at 47 per cent to 50 per cent this year. Phani is convinced that the backward and forward integration exercises will start taking effect and contribute to this growth in both top line and bottom line.
|Gifting and merchandising for Indian markets||Tie-up with more brands to enhance merchandising business|
|Innovation through online stores and shops-in-offices for other organisations||Exclusive partner with international gifting council to serve multinationals|
|Establishing partnerships with over 5000 entrepreneurs who’ll sell under their own brand but source from eYantra||Specific strategy to work more closely with its top clients|
|Offices in 9 cities||Rewards and recognition – a key area of growth and targeting a possible acquisition|