We’ve hired MBAs to take over deliveries: Yebhi.com CEO

Manmohan Agarwal says e-commerce companies need to keep finding new ways to keep their customers happy
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First Published: Fri, Oct 19 2012. 04 31 PM IST
Manmohan Agarwal, CEO and co-founder, Yebhi.com. Photo: Abhijit Bhatlekar/Mint
Manmohan Agarwal, CEO and co-founder, Yebhi.com. Photo: Abhijit Bhatlekar/Mint
Updated: Fri, Oct 19 2012. 04 39 PM IST
Yebhi.com started as BigShoeBazaar.com in 2007, headed by Manmohan Agarwal , who had experience in the retail business as the former Vishal Retail CEO (corporate affairs). Much like Flipkart, early growth came by focusing on a single business category—footwear, as opposed to books—but the real boost came with the widening of the product catalogue at the new site, which launched in 2009.
Agarwal, the Gurgaon-based CEO and co-founder of Yebhi.com, said in an interview that the key focus for any e-commerce company has to be continuous innovation to improve customer service. Yebhi’s big experiment over the last two years has been to move money from marketing to logistics. According to Agarwal, it’s a move that’s worked out tremendously well. Edited excerpts:
In the last one year, you would hear about a new online retail site every second day. Do you think this trend will continue for some time, or are we due for consolidation?
I think that this trend has already slowed down—the space is definitely growing, and the conditions in India support e-commerce; there is massive consumption, and frankly, a broken supply chain. So 2011 was a particularly hyperactive year for e-commerce. After 12-13 months, that has waned, and when you look at the last six months, you see that stability is returning. You can see that the investor interest is also waning, and you’ve got four or five major players and around that many specialist sellers defining the category today.
This is not new. If you look at India’s e-commerce sector, you started with the jobs market, then matrimonial sites, which created an entirely new category where lots of companies were coming up. The same thing happened for travel as well. Today, these are well defined categories and it’s pretty stable. The same thing will happen with e-commerce.
What are some of the recent ideas that you have tried, which went against the norm?
Once we’d built up our logistics, I wanted to make a change to the delivery process. We started the Yebhi Champs programme, where we’ve hired MBAs to take over deliveries—they don’t do all the deliveries, but these professionals meet over 20 customers a day. When everyone was looking to increase efficiencies in their logistics, we actually increased our spending, by taking money from our marketing budget. I believed that this would put a face to the company, and bring it into your house.
The Champs—they’re customer support, relationship managers and personal shoppers at your doorstep. In a short span of time, they have built their own rapport with the clients and the client calls them directly in case they need any help while shopping online at Yebhi. Each day, these Champs help people shop, return a product, get the right size and give suggestions. We started this off in Delhi and Gurgaon, and have scaled up to 30 cities now because the response has been so good.
The other issue with online shopping is that you can’t see a physical item. People are investing in virtual trial rooms, and we might do that too, but again, a big problem for most sites is returns. So what we did was start a try and buy concept—we mention it on the site clearly, and if you’re buying something like shoes, you can order the same product in different sizes, and try them on before you pay. You only get the product that you want, that fits well, and we don’t make extra trips either. It was more expensive to begin with, but it’s coming out cheaper for us now.
The big companies are all selling products in the same categories, at more or less the same prices. Why did you move out of just shoes, and why is everyone going into multiple categories?
Operating in just one segment doesn’t work for India. It’s a fundamental truth of the business. When you look at the categories that sell online, you have electronics, where there is next to no margin. Books are a small business in India and don’t have scale. That leaves fashion, and no one site can have a big hold on fashion. So unless you’re in multiple categories, you can’t get in the volumes required to scale up your infrastructure. And you need to have scale to offer value to the customer. So it doesn’t work.
And just one player won’t control the category. Which phone provider do you use? Which bank? These are not services that offer long-term differentiation, and e-commerce is no different. The differentiation comes from product offerings, the catalogue and from the service.
So how does a company differentiate on service? Particularly when successful ideas can be replicated in a matter of weeks.
Innovation is a constant factor. You have to keep doing new things. For us, the focus has definitely been to make the customer’s experience as frictionless as possible.
There were a couple of issues in particular that I wanted to address with Yebhi, which I think are a part of the online experience. The first was logistics hygiene. We initially thought we could work with the courier companies, but we didn’t find good value in their service, and set about building our own network. This was a very intensive problem, but key to future developments—and today I would say that we’re one of the biggest courier companies in India!
The other issue is that Indian consumers are, I feel, very emotional. They want to be able to put a face to a brand, and that is another reason why I wanted to develop our logistics—to have people who could be the face of the brand, who would solve the ‘touch and feel’ problem by letting people try out goods, and would become a touchpoint for our customers, who don’t want to spend a long time on the phone with a call centre. That was the starting point for the Yebhi Champs concept.
What will Yebhi do next? How does your company and Indian e-commerce evolve now?
Our goal as a company is to be the favoured e-retail destination, with a wide band of products. E-commerce is changing lives, and changing the way you engage with products. We’ve become one of the largest sari stores today, and we once sold a single item—a professional camera—for Rs.5.65 lakh. We’re selling pressure cookers and pans as well, becoming a part of everyone’s life.
FDI (foreign direct investment) in e-commerce could really help, and create a second boom for the industry, because right now, penetration is still very low. It’s still a very small market, but that’s going to change and quickly. People need to be able to take advantage of that, to scale up to meet demand, and FDI could help the category to augment growth.
Otherwise, we’re going to see innovation of the last mile, adding in new concepts to change the buying experience. But right now, we still need to grow the platform. That’s why you don’t see ideas like Kickstarter coming out of India, because that kind of selling is a later stage of development.
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First Published: Fri, Oct 19 2012. 04 31 PM IST
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