The had team zeroed in on categories where they could work with merchants to optimise their margins, and in turn, their own. Online Shopping in India @Shopclues.com India’s Asli Online Shopping Hub – ShopClues.com Back in 2011, when people were hopping from one Store to another for best bargains on an overall household’s monthly bill, ShopClues was being developed as a budget-friendly online bazaar in India. In March 2017, Shopclues was set to close the financial year with a paltry 5 percent jump in revenue and surging losses that threatened to bleed it dry. “There are ups when the industry is in fashion and down when nobody wants to touch it. “The key of any business is to get to profitability,” points out Radhika, and that’s where the focus has been. “This happens with constant optimisation of category, market, and other monetisation capabilities,” says Radhika. The key for an enterprise tech solution to work is non-conflict. The company’s valuation rose to $1.3 billion with the fundraise. “There is a huge market to serve. With SmartOps, we give brands the support they need to sell on their own website,” says Radhika. So, how did it a pull off a turnaround?India has always been more than happy to shop for clothes, utensils, household goods, and knick-knacks from small stores around the neighbourhood or in bustling bazaars. In a world ruled by low internet costs thanks to Reliance Jio, everyone is bullish about Tier II, III and IV markets. “My top line is the orders and revenue. A report by Forrester Research also predicted e-retailer sales to hit nearly $4.8 billion during the overall festive season. Shopclues believes it has built the foundation it needs, and the market is large enough. Every six weeks, a team from Shopclues goes to China and meets the merchants there to understand what is selling on the platform and what isn’t. 2017 was when Flipkart was staging a comeback and giving Amazon a run for its money, while SnapDeal had begun faltering. Remarks Shopclues started making money at the contribution margin level in May 2018. They provide the merchants with analytics and also partner with Chinese merchants and manufacturers. In October last year, it broke even at the unit-economics level too. Sometime in 2017, ShopClues told YourStory that it was planning an IPO that year. Says Vidya Shankar, It is something that Radhika and her team have been working away at for the past two years. By revenue I mean the money we make. The proverbial aha-moment came when they realised they didn’t necessarily need to sell products that would put ShopClues in direct competition with ecommerce heavyweights who were backed by deep-pocketed investors (Flipkart, for instance, raised over $4 billion in 2017. The marketplace also lists sellers from China on its platform. What helped, she adds, was not measuring gross merchandise value (GMV) as it is a number that can be scaled and tweaked. While Shopclues is still in the red, things are looking up. Dive into the world-famous cultural gullies of the Indian panorama and fall in love with Indian ethnic-city. It was time to make some tough decisions. Rather, it is because they changed their staffing: “When we walked away from certain categories, it needed different talent and shuffling. Not surprisingly, many had already written its obituary. As of 2018, Snapdeal had a market share of 1.9 percent, while ShopClues’ market share was 1.6 percent.Call it the great tug-of-war. We have been able to do all this with a total raise of less than $200 million,” she says. If they are able to maximise inventory and aggregate demand, this will work great. The same year, the company raised debt capital of $1 million led by InnoVen Capital, and later in August last year it raised $16 million from existing investors. But take a look at its numbers for FY2017 and FY2018 and you’ll see the change.Radhika says she clearly remembers the day in March 2017 when the team decided to take a step back and focus on profitability. Says Vidya Shankar, “People will continue to shop online and more so post the launch of Jio. ShopClues Indi Market - Your tryst with the popular Indian shopping hotspots begins here. )“We consciously walked away from categories that weren’t core to us - like branded smartphones, branded fashion, and large appliances,” recalls Radhika. After all, at a time when the ecommerce bigwigs were splashed over the multiple front pages of national dailies, Shopclues was nowhere to be seen. In part, losses have fallen due to lower ad spends, a decline in employee benefits (given the attrition), and lower expenses. Most of these merchants and consumers are price-sensitive; a SaaS model works wonders for them,” he says. So if I make Rs 100 for selling a product that is costing me Rs 150 to ship out, that would a negative contribution margin. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.Sign up for the PYMNTS.com Newsletter to get updates on top stories and viral hits. The company also focussed on its exclusive labels - Its private labels contribute to 10 percent of Shopclues’ overall business. Over the last seven years, one of the most important things I’ve learnt is - up or down, you need a steady ground to thrive and survive,” she says.
As of March 2017, the last month of the 2016-17 financial year, ShopClues had a 12.8% market share pipping Snapdeal (6.9%) to become the third largest ecommerce company after Amazon (44.6%) and Flipkart (35.7%), according to market intelligence company Kalagato. And this at a time when Flipkart and Amazon were earning their spurs with exclusive tie-ups for exactly these categories.What helped them walk away from that temptation was just one thing: focus on where they were headed.
In a high-cash-burn sector like ecommerce, a turnaround is easier said than done.
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