After six and a half years of being a part of a television network in Chennai, Krithika Nelson took a break and set up a studio to design whacky wedding invitation cards. But she quickly realised that she needed to do something on a larger scale and soon enough, when she was returning home in an auto rickshaw one day after visiting a handicrafts exhibition with her friend Theyagarajan. S, they had an eureka moment.
“We suddenly looked at each other and said, ‘This is it’. We have to create an assorted handicrafts bazaar online,” says Nelson. But this wasn’t the duo’s first eureka moment. They had had other ideas in the past – right from live streaming the December kutcheries (music concert) to various ideas in the organic products’ space. However, this time they knew this had to be done.
We get close to 100 requests every day from sellers across the country. Our curators sift through products for quality and look at scalability potential. Most importantly, if the person who has contacted us is indeed the person who makes the products as well, they sell. At Shopo, we don’t want middlemen or dealers.
Her father gave the duo Rs. 1 lakh as seed money and while Nelson started hunting for people who could sell their goods online, Theyagarajan quit his job at Bankbazaar.com, an online financial services firm, and started working on the technical aspects of the project. Finally, with 20-odd sellers on board, Shopo.in (Shopo) was launched on June 12, 2011. It’s been almost a year and Shopo today has over 300 sellers or ‘shops’.
Checks in place
Nelson is quick to rattle out other figures: her team now comprises of 25 people, they ship an average of 200 products every day and almost 60 per cent of their customers come back for a repeat purchase. “We get close to 100 requests every day from sellers across the country. Our curators sift through products for quality and look at scalability potential. Most importantly, if the person who has contacted us is indeed the person who makes the products as well, they sell. At Shopo, we don’t want middlemen or dealers,” she says.
Once the checks are done, Shopo guides sellers on how to shoot products’ pictures and to write product descriptions. “We’re now launching a self service dashboard, where sellers can create their own shop with tools prepared for them, much like how you upload and edit photos on Facebook,” says Theyagarajan. Shopo charges no flat rentals, but takes a 15 per cent cut of every product sold. “This becomes an incentive for the sellers and for us to push sales,” he adds. Shopo has products in various categories like apparel, jewellery, bags, shoes, accessories, food and dining, home décor, stationery and beauty care. While apparel accounts for highest value sales, home décor charts the biggest volume numbers.
Perhaps the biggest perk that Shopo provides is the logistics support to most of their sellers. “Getting logistics in place was a nightmare. Thanks to the boom in e-commerce, logistics partners were on board when picking up products from a single or at best, a couple of warehouses and shipping to various parts of the country. Our model involved collection from multiple locations and then shipping to numerous customers. Our logistics partners were horrified when we first brought them on board,” recalls Nelson.
The other pain point has been hiring. “The business starting growing faster than we imagined and we needed to ramp up quickly, else we would fail. But getting a good candidate at modest startup salaries in Chennai is really tough,” says Theyagarajan. The company is still hiring, given their speed of growth, and Theyagarajan and Nelson find themselves discussing prospective candidates more often than any other aspect of the company. Eventually, it’s the ability to stay at it and continue interviewing till the right candidate is found that is helping them overcome the hiring challenge.
Founders: Krithika Nelson and Theyagarajan. S
USP: Online shop-in-shop for handcrafted products without middlemen
Then of course, there is competition. Nelson makes no secret of the fact that Shopo is an Indian avatar of Etsy (US-based e-store). “Their global success is a huge inspiration and we really want to get to where they have,” she shares. There’s competition on home turf too, most directly from Mumbai-based Craftsvilla.com, which has a fairly similar model. Nelson and Theyagarajan credit their competitor with expanding the market and keeping Shopo on its toes. That the two sites wind up sharing some sellers doesn’t seem to bother this team.
The cool factor
One of Shopo’s successes is that they helped enable access to ‘cool stuff’. “One doesn’t have to go all the way to Dilli Haat (craft bazaar in New Delhi) or wait for handicraft exhibitions to buy something pretty or quirky. While hunting in a bazaar can be fun, not everyone has the access to the kind of range we have online,” says Nelson.
On the other hand, there are people who’ve started selling stuff on Shopo as a hobby. Like the head of programming at a local TV network in Bengaluru who sold innovative Channapatna toys as a weekend hobby. “He has now taken up a consultancy role in his office and sells toys as a full time job,” says Nelson. She also narrates the story of a woman, who sells jewellery on Shopo and lived in a studio apartment last year, but has now moved into a larger apartment in a much better location due to great sales.
Theyagarajan adds that they balanced the presence of rank newcomers with better known brands like Chumbak, The Big Bag Theory and Happily Unmarried. “This helped with the cool quotient of our site and increased sales for these brands, making them bigger,” he says.
Adding to the momentum
Shopo has only just started tapping into the NRI potential by introducing international shipping to the U.S., the U.K., Canada, UAE, Singapore and Malaysia. It faces competition here too from the likes of RedPatang and of course, Craftsvilla that started international shipping before Shopo did. “But we’re doing great sales. Indians living abroad spend much more – and I’m talking in terms of lakhs of rupees – when they buy from our site. The delight of finding pretty, quirky Indian things online and the convenience of not having to lug it all from their annual Indian vacations are too good for them to resist. And thanks to them, we’re hoping their local friends, who’re not of Indian origin, too start shopping with us,” says Nelson.
“I think we need to increase our products in the chemical free cosmetics. In fact, when we first started stocking handmade soaps from Puro, I used the products myself before we put it online,” says Nelson, adding that she has never gone back to her older soap. “Also, I’m really passionate about organic food. I think we have a huge market for that and I really want to explore that online, ideally through Shopo.”
It would certainly help to add a new category, since Shopo intends to touch four million buyers in the next five years. The company is also in talks with some angel investors to help ramp up growth. The team at Shopo is also working on improving their user interface. The primary target audience of the site is women, so the look is colourful and ethnic. “But there is scope for improvement. We need to get better and cleaner,” says Theyagarajan.
The driven duo is lucky to have supportive spouses. While Nelson recounts her husband’s cluelessness about his wife’s plans when she quit her day job, Theyagarajan reminisces about how his then girlfriend, now newlywed wife Roopika was their first customer. “That was a lucky buy for us. It really set things rolling,” says Nelson, on a concluding note.
Concept in brief
Krithika Nelson and Theyagarajan. S, founders of Shopo.in want to make a dent in the online handcrafted products retail space. The space is exciting thanks to two major factors: good international potential of selling Indian handcrafted products to a global audience and a platform to help smaller companies expand their market through the Internet.
Today, the company acts as the online e-commerce platform for 300 odd brands and helps them reach a wide range of customers. The company employs over 25 people, and ships an average of 200 products every day. Almost 60 per cent of their customers come back for a repeat purchase.
Modelled along the lines of Etsy, the company that calls itself the ‘world’s handmade marketplace’, Shopo.in needs to focus on more on what it does best to win in this sector. It is crucial to balance the needs to both brand owners (sellers) and consumers (buyers) without compromising on either side. The tactic the company can adopt to make this happen can be its biggest differentiator.