Home / Mint-lounge / Net-a-Shopper | Finding the next Flipkart

Shopping online in India is an impersonal experience. It’s been mechanical. This was something I wanted to address. You buy something beautiful and it comes wrapped in ugly plastic," says Arun Sirdeshmukh, CEO, “Instead, we gift-wrap each item you buy from our site, so it’s easy to gift, but even if you’re buying something for yourself, it feels special. That’s just one of the things we did to make the experience personal."

E-commerce has been around for over a decade now, but it’s still finding its feet. Barring a few success stories such as Flipkart, the market has been crowded with me-too websites which faded away, died or were acquired and then cut to pieces.

People are definitely keen to purchase things online. Anita Phukan, a 25-year-old freelance writer living in Dibrugarh, Assam, and a regular Internet shopper, says: “In Assam, our small, slightly unreachable town now has access to many brands for the first time. Recently, the local Blue Dart office called me to apologize for the delay in one of my packages. It was because there were 500 deliveries piled up with them and they said they were all from e-commerce sites."

Some of the most successful examples are service providers—sites such as, JustDial and MakeMyTrip. In five years, Flipkart has become a household name, becoming more well-known than established firms such as Indiaplaza. Why haven’t others been able to do the same?

Despite a lot of investment ($298 million—or 1,668 crore now—in the year till October 2011, up from $47 million in the corresponding period in 2010, as previously reported in Mint), the online retail sector remains unsettled, and many of the new players seem more interested in attracting users through discounts than in building for the long term.

Chris George, founder and group CEO of digital marketing services provider EBS Worldwide, says these sites have focused on acquiring customers rather than making profits. “This is starting to make a lot of them feel the pinch. But the conditions in India are right for e-commerce now. People are comfortable with the Internet and online payments are secure," he says. George was one of the early investors in e-commerce in India, launching in 2000.

E-commerce transactions were 19,688 crore in 2009, and crossed 45,000 crore in 2011, according to estimates by the Internet and Mobile Association of India (Iamai).

That e-commerce is growing in India is clear, but can this last?

Anupam Saxena, associate editor of the industry news and analysis website MediaNama, says: “There are a lot of issues in front of Indian e-commerce sites today. The sites are interchangeable, there’s no reason to pick one over the other right now, so people chase deals. The sites need to get more creative."

Alok Kejriwal, owner and founder of the 2Win group, says: “People say things like cash on delivery are essential, but seven years ago, IRCTC asked for a credit card. MakeMyTrip asks for a credit card. People are taking the wrong lessons and trying to build their businesses too quickly, and this is making the air toxic."

Based on our own analysis and the recommendations of these and other industry watchers, we’ve put together a list of some of the most promising start-ups in online retail today. In the order of their founding, these are:


Founded in February 2007 as a gift personalization service, Myntra sold custom-printed goods such as T-shirts and mugs; it grew quickly but then plateaued. In 2011, it ventured into fashion and lifestyle products. Much like Flipkart, Myntra focused on making its system easy to use (through cash on delivery, simple returns) and on speedy deliveries, counting on customer service to drive growth.

Getting here

Partner act: Ashutosh Lawania (right) and Mukesh Bansal, Myntra co-founders. Photo: Aniruddha Chowdhury/Mint

Lawania speaks softly and deliberately, but as you get him talking about the early days of their business, you can hear the enthusiasm underlying his words. He says, “The overall apparel and textile industry was around $50 billion in 2010, and there were no established players, only start-ups."

Myntra’s site is simple to use, and very visual. They set a template which most sites now use—thumbnails from which users can pick individual items to zoom into, with filters to make it easy to find specific products.

Instead of focusing on deals and discounts, as other start-ups were doing, Myntra aimed mostly at current trends in fashion. Lawania says: “We decided early on to focus on getting the buyers who want the latest and best products. Around 80% of the fashion business is current season, discounted products are only a small portion of the business."


“We have done better than we could’ve hoped for. If there was anything to change, it would be that we should have entered the fashion sector even sooner. We spent too long studying the market, but we wanted to make sure that we were fully prepared," says Lawania.

The road ahead

“Our vision is to democratize fashion. For people outside of the big cities, the major brands still don’t have any physical presence. Instead of offering last year’s products at a big discount, we want to make it possible for anyone, anywhere to look good," says Lawania.

Our view

Despite having done well so far, Myntra might find the most challenging time lies ahead, as competition in the fashion segment builds up. It will need to innovate to keep customers interested, but it’s starting from a strong position.


Founded in December 2007 with a focus on electronics, FutureBazaar is one of the top 10 e-commerce companies in India. It has shown a willingness to change focus to react to the needs of the market, going from electronics to a much larger basket of goods.

On site: Kashyap Deorah of FutureBazaar. Photo: Abhijit Bhatlekar/Mint

Getting here

FutureBazaar has been headed by Kashyap Deorah since March 2011. The 33-year-old CEO started his own e-commerce business as a final-year student at the Indian Institute of Technology, Bombay in 1999, before moving to the US to work for the company that acquired his business. He returned to India in November 2007 and launched Chaupaati Bazaar, a phone-in retail business, which was acquired by FutureBazaar in 2010. “In October 2010, we relaunched FutureBazaar as a destination for deals in electronics."

This cost-driven model would continue for one year, but by 2011, the focus was shifting. Mumbai-based Deorah says: “Now, our focus was on home technology, ghar ka samaan. With the Big Bazaar integration, distribution and warehousing was solved for us."

This is just the start, though. According to Deorah, the real volumes will come from products that are linked to their physical stores, and “the biggest volume driver is going to be groceries, which we’ve rolled out in Mumbai now, and are going to scale across major Indian cities in the next year or two". You can order Big Bazaar items from the website, and there is no minimum order, though the site charges 50 for delivery.


This, however, has led to a cluttered website. The home page is confusing, with deals from different categories presented with no obvious organization. Video cables, mithai (sweets), pillows and backpacks are all lined up together, and it takes a second to find what you want within the categories.

“Of course we made mistakes along the way," Deorah says, “but the real one was not fully leveraging the (Future) group’s strengths during our relaunch in 2010." Instead, the company focused entirely on electronic products, and Deorah adds ruefully, “If we could change things, we would have held off a lot of big spending in 2010 to bolster our current growth plans."

The road ahead

The physical stores simplify logistics for FutureBazaar. More interesting is the extent of its cash-on-delivery (CoD) business—the figure is over 50% for the industry, but Deorah enthusiastically points out, “CoD is only 20% of our sales". Instead, they promote loyalty with cashback incentives and buyer rewards.

The company is also investing heavily in technology, since its software requirements are specific. Deorah says, “You’re going to see the more successful e-commerce companies also developing a lot of technology themselves."

Our view

The hub-and-spoke model of physical stores supplementing the reach of the website is what makes FutureBazaar such a promising e-commerce model in India. Going forward, its limited reliance on cash on delivery, and focus on low-cost, high-volume transactions, could lead to success for the brand.


Manu Kumar Jain (in a check shirt) and Praveen Sinha, Jabong’s co-founders. Photo: Priyanka Parashar/Mint

Getting here

While there were already some sites in the fashion and apparel sector, there was little innovation in customer service, says Manu Kumar Jain, co-founder and managing director,, Gurgaon. The 31-year-old entrepreneur (a product of IIT Delhi and the Indian Institute of Management, Calcutta), says: “Fashion and apparel is still a largely untapped sector in Indian e-commerce. It’s got the right kind of profile for e-commerce as well, because it’s an aspirational product category, but people lack access to fashion."

For Jain, the mandate was clear—roll out new features and build an audience before the established players could react. He says: “We did a lot of things that should’ve been there already. We were one of the first sites with a 30-day return policy, and today we are trying to offer same-day delivery in the top 10 metros. We pioneered card-on-delivery payments, so customers who aren’t comfortable with using a card online don’t have to keep cash handy."

The company has concentrated on building depth while staying focused on fashion. “With over 400 brands and 50,000 products, we have possibly the largest selection right now and we’re building that up still."

Jabong’s site looks a lot like Myntra. Each section is dominated by large pictures and a photo catalogue. This is easy to use, but puts the spotlight on deals, something both sites say isn’t a primary focus. Jabong’s layout is easier to navigate, but by and large it seems to be willing to adopt ideas from the competition to grow quickly.


At this early stage, it’s too soon to say if Jabong has made any real mistakes. Certainly the company is doing far better than planned. Jain says, “We have gone in the right directions, and grown better than expected."

The road ahead

Jabong has been growing through word of mouth and targeted online advertising on social media. Jain says: “We listen to customer feedback and we’ve had a great response. We see repeat visitors at well above the industry average because of the commitment to customer service, and this is going to help us grow profitably."

Our view

Despite the quick start, Jabong has a lot to do. The brand must keep introducing new reasons for customers to keep visiting. For long-term success, it needs to be able to balance growth and profitability.


Arun Sirdeshmukh of Fashionara. Photo: Aniruddha Chowdhury/Mint

Getting here

Even on the phone, Sirdeshmukh, 46, has a commanding presence. He speaks like a practised orator: “I have a history in start-ups and in this particular vertical. When I felt that Reliance Trends was well set up, I felt the urge to do something new. E-commerce seemed like a good next step because I think that it’s changing the world."

Sirdeshmukh, who worked with Van Heusen, Louis Philippe, Indigo Nation and Scullers before joining Reliance Trends, felt he could bring something new to the existing e-commerce scene.

“What most people do is sell like a catalogue. That’s not really useful for buyers," he says. “What we offer is a curated site, with a focus on fashion." To that end, Fashionara is one of the most visually distinctive sites around—it resembles the social network Pinterest more than a retail site, with users able to quickly customize views to their liking.

Products have detailed descriptions—of the material and design, but also of the items they can be paired with, and the settings they’re most appropriate for. This level of detail makes it one of the easiest sites to navigate. At the same time, there are lots of detailed photos, and even videos of products, so users can see what a particular outfit looks like in motion. Sirdeshmukh says: “Clothing is meant to be seen. The site reflects that."


So far, the company seems to have made the right moves, particularly in differentiating itself from the competition by having one of the best-looking and simple-to-use websites.

The road ahead

Fashionara plans to grow by adding depth within its product range, while still being picky about the brands it partners with. Sirdeshmukh is emphatic: “The focus has been on improving the existing experience. We’re not going after deals because we think people will pay a little extra for a better experience." For example, aside from the regular free delivery, Fashionara offers overnight delivery (or same day in Bangalore) in major metros, for which it charges 199 (or 99 in Bangalore). Charging for express delivery is unheard of in India, yet it actually gives the customer a choice to expedite shopping before a special occasion.

Sirdeshmukh adds: “There are some shoppers who are loyal to the deals. They are usually younger, and will not stay loyal to a site. We want the shoppers who are willing to pay a little more for the best experience."

Our view

With its highly visual approach, Fashionara immediately catches the eye. Lookbooks, where all the elements in outfits for different settings link to product pages, are a new idea for Indian e-commerce, and Fashionara is focusing on this, as well as an online fashion magazine. These ideas, it hopes, will help users find products they may have missed otherwise.

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