Hyderabad-based eYantra has been in the space of corporate gifting for the last decade. The company, which has had a compounded annual growth rate of 75 per cent consistently since it started in 2001, has its eyes set on a Rs. 100 crore turnover in the near future. To achieve that, it has strengthened its infrastructure and is also planning a new gifting methodology with special focus on rewards and motivation.
“The corporate gifting market is completely fragmented and though it is a Rs. 5,000 crore industry, the organised sector has cornered only one to two per cent.”
Building a business
eYantra, which has received funding of up to U.S. $10 million from Chennai-based Ventureast and U.S. based Argonaut, invested this sum to build its own facility of 50,000 square feet 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 and this buffer has been created with a purpose. The company currently runs 40 stores online on behalf of companies and 17 physical stores (within the premises of an organisation), and plans to increase these numbers to 100 and 40 respectively, by 2012. It has signed up with channel partners in 20 tier-II and tier-III cities and plans to expand to 50 by 2013. Most importantly, eYantra plans to build an entrepreneur network of 5,000-7,000 in the gifting space over the next five to seven years. These entrepreneurs will sell gifting solutions under their own brand, and source the products from eYantra.
In addition to its own growth plans, eYantra sees business sense in encouraging other organised players, within the segment. Explains Phani N. Raj, founder, eYantra, “This segment is completely fragmented and though it is a Rs. 5,000 crore industry, the organised sector has cornered only one to two per cent. I would like to see this segment expanding to Rs 50,000 crore, and for that, the presence of organised players is important.” With more organised players, the market base will expand due to greater visibility and improvements in product offerings, which he thinks is the need of the hour.
The false start
The company’s dream run had a fumbling start. Phani Raj was working at PriceWaterhouseCoopers in San Jose, U.S., in 1999, working with dotcoms. This experience and his own childhood desire to do something on his own, culminated into a business idea and he teamed up with a Polish business partner to start Pratima.com in 1999. The website offered customised gifts, but, the Nasdaq crash of 2000 resulted in the partners losing their money and that of others who had invested. The portal got orders, but, not enough to justify the huge technology and employee costs. With 82 people on its roles, Pratima’s monthly income totalled Rs. 10 lakh and it was not feasible to be in business.
Though he had other job offers, Phani Raj feels his immaturity at the time was a blessing in disguise as the desire to continue to be on his own was strong. And with advice from one of the directors at Pratima, he abandoned the Internet business to start eYantra – a personalised gifting company. From his website database, he realised that most of his customers were corporate in nature, and, thus, was born the idea to cater to them through brick and mortar. With the first order of five t-shirts from Tata Consultancy Services giving him the confidence, Phani Raj and eYantra were in it for the long haul and put together a team of 16 employees to begin with.
“Retail stores within corporate campuses were unheard of in India in 2004. We knew this concept existed in the U.S., where people wear t-shirts of the university they are in, use mugs with that logo etc.,” he explains. A similar concept was introduced at ISB, Hyderabad, with merchandise for students, staff, visiting faculty and guests. Soon, corporates began demanding similar setups, and today, eYantra caters to 17 corporate clients through physical stores. The next innovation was its online stores for companies. “Large corporates like HCL Technologies have offices in multiple locations. Having so many physical stores is not possible, so, we introduced online stores with centralised access,” he says. In addition to stocking corporate gifting products, the company also introduced third party products like washing machines, mobiles and more.
Phani Raj’s faith in himself and the market was justified when eYantra’s revenues jumped from Rs. 72 lakh in the first year to Rs 2.5 crore in the second. Today, the company has 300 employees and 9 offices with strong revenue and growth forecasts going forward.
The company, which has introduced several innovative gifting solutions (refer box), is currently focused on rewards and innovation. “These two are very important. But, giving a person money, or recognizing it at a later date for a job well done now is not that gratifying,” he says. Therefore, the company is coming out with instant gratification products like gifting cards. These cards act like gift vouchers, with an in-built corporate discount. So, for instance, a senior can gift his junior a movie gift card or a card to be used in a retail store that can be used right away. This, he believes can be done across the table instead of waiting for year-end appraisals and will enhance employee motivation.
In addition to these innovations at eYantra, another driver of growth has been effective analysis of available data. So, with information on high spenders and their spending patterns, the company was able to introduce customised packages that further spurred eYantra’s growth. Technology and analytics have played a great part in this. With online stores, it has also been able to keep its inventory cost under control. Sales promotions with alluring discounts and brand building have complemented word of mouth in making eYantra a well-known name in the corporate world. eYantra has focused on products, easy availability, innovative products and promotions to keep the company growing.