BackShopatplaces: The local touch
Sourcing and selling authentic crafts, jewellery and apparel from places famous for making them
Premium
Shopatplaces (www.shopatplaces.com)
Past life
A former supply-chain executive with chocolate-maker Cadbury, Sherfur Rehman, 29, was in Cuttack, Odisha, on an official trip in 2011 when his mother called with a request. She wanted filigree jewellery from Cuttack.
Eureka moment
That night, in a phone conversation, Rehman mentioned his mother’s request to an engineering batchmate, Zuhaib Tufail Khan, 28, who was working with investment bank JPMorgan. Khan too reported receiving similar requests every time he travelled.
It didn’t take too long for Rehman and Khan to spot an opportunity. The idea was simple: They would source authentic stuff and sell at a competitive price. “Famous Places, Best Buys" was the guiding philosophy.
Genesis
Khan, an investment banker, did research on the ethnic Indian- wear industry and talked to people—friends, family and relatives, as well as customers at shops selling ethnic items. They visited retail outlets such as Fabindia, Ethnicity and Anokhi in Mumbai to see what was trendy and get an idea of pricing. “Sometimes I had informal conversations with customers in these shops to find out what kind of quality, design and pricing they wanted, and to check if they would be interested in buying the same things online. The answer was a resounding yes," says Khan.
Traditional brick-and-mortar stores charge heavily for authentic items because of real estate costs, the presence of many middlemen, and multiple leakages. “These escalate the price of a product by five-six times though the manufacturing price is extremely low," Khan says.
Rehman and Khan realized that if they were to succeed, they would need to procure products directly from vendors, most of whom are based in smaller towns.
While they had a fair idea of what men liked, they needed help with understanding what women would want to buy. So they conducted “formal interviews" with their female friends.
By May 2012, both had quit their jobs. Over the next seven months, they travelled across the country, meeting vendors and artisans at workshops in different towns and cities. A few friends in the supply-chain management side of different industries mined their networks for contacts, others gave personal references so that they could hone the vendor list.
Within two-three months, they had a list of the “right" questions for vendors, knew how to judge an artisan, even understand whether a vendor would be able to maintain quality standards.
They launched the beta site in October 2012 with 200 stock-keeping units (SKUs), including leather belts and wallets from Kanpur and brass jewellery from Moradabad. “Popular products change frequently. In general, Punjab, Rajasthan and Gujarat are the three most popular states. Bandhej suits from Gujarat, Phulkari saris from Punjab sell like hot cakes during winters. From Rajasthan, handblock-printed skirts see high sales," says Rehman, explaining how they added to their collection.
In a bid to grow faster, they have begun selling some products on marketplaces such as Snapdeal, Flipkart and Amazon, under their Shopatplaces brand.
Reality check
As word got around and the business began to pick up, Khan and Rehman realized that the company needed internal processes in place before it could aggressively woo customers. “With just one employee to lend a hand, everything from packing the order and marketing the website was our job. We realized that if the orders weren’t properly fulfilled, the brand reputation would be at risk," says Rehman.
They also understood early on that they needed to end every month on a profitable note. Inventory management—stocking products that sell faster—held the key to this. To do this effectively, they built a set of data analytics tools that crunched real-time information and helped them identify trends. This, in turn, helped them manage the inventory better.
Secret sauce
Streamlining internal processes and hiring seven more people, including a full-time photographer, has helped. “We keep on changing inventory as per the requirements of our customers. Demand aggregation and supply-chain management are our biggest strengths. And this comes from analytics," points out Khan. “It’s because of this that we are seeing profitability."
For example, embroidered suits from Pakistan and Kutch in Gujarat find more takers as summer recedes, while sales of jewellery pick up ahead of Rakshabandhan. Data analytics also helps them foresee colours that move faster, and place orders with vendors accordingly.
To keep costs minimal, they even travel on a budget, taking trains and buses each time they travel out of New Delhi.
Plan B
“We can sell our brand through the physical outlets of organized retail players instead of just being an online player," says Rehman. If this does not work, they believe they can start another venture. “We have gained a lot of experience in managing a start-up at minimal cost and very high efficiency. This skill-set, and the relationships we have built, will definitely help us. We will not be repeating the mistakes we made the first time," says Khan.
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