Home >Companies >Apollo International, Lycos form e-commerce JV

Hyderabad: Tyre manufacturer and commodity trading firm Apollo International Ltd is joining hands with digital marketing firm Lycos Internet Ltd to offer a backend e-commerce solution for global brands targeting Indian consumers.

The two firms signed an agreement to start a joint venture, Apollo Lycos Netcommerce, that will design, develop and fulfil e-commerce for global brands online. Lycos will hold 49% in the entity with Apollo holding the rest.

The end-to-end solution would cover everything from setting up a website and related infrastructure to inventory tracking, inventory management, online payment, packaging, order delivery, reverse logistics, driving traffic, online promotions, data security and consumer privacy, the two firms said on Wednesday.

“It is right combination of two companies who have their strengths," Suresh Reddy, chairman and chief executive officer of Lycos, said in a phone interview.

Lycos will bring its expertise in digital media, technology and marketing, while Apollo, which is among the top tyre manufacturers in the country, will bring to the table its capabilities in logistics, inventory management, and reverse logistics.

“The plan is to bring a unique digital shopping experience to Indian consumers, where they can interact directly with global brands they love," Raaja Kanwar, vice chairman and managing director of Apollo International, said in a statement.

The product will allow brands, big and small, to build their online presence without having to worry about the hassles of managing an e-commerce entity.

“It is like a brand’s outlet, a brand’s online store. We will help do that," said Reddy. “All they have to do is put their products at a place and we take over and we manage the entire experience as though it is their experience (of sales and customer engagement)."

The venture could prove useful for international fashion chains that are eyeing the Indian market following the union government’s decision to allow 100% foreign direct investment (FDI) in single brand retail three years ago.

Global brands such as Gap Inc., Brooks Brothers, Hennes and Mauritz and Pavers England, for example, could sell their wares using the venture’s e-commerce solution. Gap is considering selling its apparel through its own e-commerce channel and not through third-party retailers such as Amazon, Myntra or Jabong, Mint reported on 23 September.

Investment bank Goldman Sachs estimates the Indian e-commerce market to grow from the current $20 billion to $300 billion by 2030, accounting for 2.5% of the country’s GDP. The Indian e-commerce industry is dominated by players such as Flipkart, Amazon, Snapdeal, PayTm and eBay among others.

Lycos, which has origins as an Internet search engine, ran an online marketplace, LycoShop, in the 1990s under its previous owner. Its current owner began as an online greeting card shop before diversifying into digital marketing and, more recently, the wearables space.

The latest offering is Lycos’ re-entry into the space, giving it an opportunity to participate in the Indian e-commerce story, albeit at a technological level. The model is referred to as commerce-as-a-service (CAAS).

Globally, CAAS solutions are offered by NYSE-listed NetSuite Inc., Symphony Commerce Inc, which raised venture funding from Bain Capital and FirstMark Capital.

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