NDTV to spin off gadgets section into e-commerce website3 min read . Updated: 11 Aug 2015, 10:00 AM IST
Group CEO Vikram Chandra says digital has been lucrative for NDTV, with very little cash spent
Having tested the waters with a fashion e-commerce portal, New Delhi Television Ltd (NDTV) is pushing further into e-commerce, citing muted growth in the news broadcasting business. The company is set to launch three e-commerce websites across the gadgets, automobile and food categories next month, according to a top executive.
“In television, there are certain issues... if you are doing quality, non-tabloid journalism, you do not get high TRPs (television rating points). There are issues around distribution, subscription as well as carriage fee. It has become very evident that it will take time for some of these issues to be sorted out," said Vikram Chandra, group chief executive officer, NDTV.
The emphasis on digital is evident in the company’s financials.
For the quarter ended 30 June, revenue from digital and e-commerce businesses accounted for 21% of the company’s total revenue—up from 13% a year ago.
The company’s TV business saw a decline of 18.75% from a year ago, while its e-commerce and digital business grew 51%.
The $20 billion Indian e-commerce market is growing rapidly and is expected to reach $300 billion in sales by 2030, according to a study by Goldman Sachs in May.
Gadgets 360, the company’s new gadgets website, will be built on an existing section of the NDTV website—NDTV Gadgets. It will take on rivals, such as Flipkart, Snapdeal and Amazon India by forging exclusive arrangements with some electronics manufacturers.
Only after a week of launch on Gadgets 360 will the products be available elsewhere, said Suparna Singh, deputy CEO of NDTV Convergence and director of strategy, NDTV Group.
Last week, NDTV said it has raised an undisclosed amount at a combined valuation of close to $80 million for two of its new ventures—Gadgets 360 and Fifth Gear Auto.
Investors, who participated in the round, include former Apple Inc. chief executive John Sculley’s firm Inflexionpoint; Genpact Ltd founder Pramod Bhasin; Nikhil Vora, founder of Sixth Sense Ventures Advisors Llp; Vindi Banga, former chairman of Unilever Plc and Hiro Mashita, founder and director, M&S Partners Pte Ltd.
Gadgets 360 is expected to go live in the next one month.
NDTV Gadgets claims to get 23 million unique visitors every month, quoting Google Analytics.
NDTV Group is also in talks to raise funds for its food website, SmartCooky, which will focus on health and nutrition, said Singh, who declined to divulge further details. This too will be built on an existing section of the NDTV website, NDTV Food, that generates three million page views a month, said the company citing Google Analytics.
NDTV Group reported a net loss of ₹ 24 crore in the quarter ended 30 June.
Indianroots, NDTV’s e-commerce website for ethnic apparel and accessories, saw its gross merchandise value (GMV, or value of goods sold) rise seven times to ₹ 21.7 crore, in the quarter ended 30 June, from ₹ 3.3 crore a year ago. Indianroots’s net revenue in the quarter was ₹ 6 crore, and it made a loss of ₹ 11 crore.
Indianroots had in May raised $5 million at a valuation of $85 million from KJS Group. It currently gets close to 4,000-4,500 orders in a month with an average ticket size of ₹ 17,000, with 60% of the business from Indian customers.
“Digital is something where we have been extremely successful at, with very little cash spent," said Chandra.
Jehil Thakkar, head of media and entertainment at consulting firm KPMG in India, said media firms are realizing that dedicated readers and viewers of their digital products can be potential customers. This is prompting them to diversify into e-commerce. There’s room in the business, he added. “E-commerce has just started and has a decade of growth ahead."