By Manoj Gupta , Founder, Craftsvilla.com
Manoj Gupta, Founder of Craftsvilla.com shares his thought about the e-Commerce industry, what it lacks and what is needed to be done. Craftsvilla.com, an e-Commerce company that deals with the handicraft products, believe in empowering designers and artisans helping them to showcase their unique products to the world. The company has raised an undisclosed amount of seed funding from Nexus Venture Partners and Lightspeed Venture Partners.
Prior to Craftsvilla.com, he was the Principal at Nexus Venture Partners, a VC firm in India with a fund size of $320 million. While at Nexus, Manoj was board member of Bigshoebazaar India (which owns Yebhi.com), Sohanlal Commodity Management and was board observer of Snapdeal.com. Manoj has been very active in Internet, Technology, Wellness and Agri/Rural ecosystem in India and has been involved in grooming highly scalable businesses in these sectors. Prior to Nexus, he co-founded a semiconductor technology company, WIT, in US, which was later acquired by Chrontel.
Manoj has an MBA from IIM, Ahmedabad, B.Tech from IIT Bombay, MS from University of Illinois, Urbana-Champaign, and CPhil from University of California, San Diego. He has filed several patents in the US.
e-Commerce is an interesting "business concept" which unfortunately is very difficult to translate into a "business model" which is viable, profitable and is non-VC dependent. In India lot of ecommerce entrepreneurs and venture capitalist too fail to understand that e-Commerce is a "business" where you have to make money like a "Lala" not a video game where more the points you get (number of orders), more the kick you get.
The exponential myth of e-Commerce is that e-Commerce is scalable like hell in a short amount of time, which off course it is if you sell products below cost. The realistic fact is that it is very scalable but as every business, it requires an "inception period" where basic fundamentals of business need to be understood and followed. This includes finding and communicating the right "positioning" in the market, understanding the customer segment and need, understanding your product-market fit and understanding the economics of the business (how to make the business cash flow positive).
The fact of the matter is that lot of e-Commerce companies in India do not know what they are or what they want to become. They all want to become Amazon of India. They start with one category, throw around deals, get to a certain number of orders, add another category, throw more deals around and the video game keeps continuing. Apart from lack of clarity on "positioning", they also are not making efforts to understand how to get the right set of customers to their webstore, convert them through right product-market fit and bring them back through amazing customer service.
More than the entrepreneurs (for whom I have lot of respect), it is the VCs in India who are to be blamed to make it seem like a sprint to finish line. There is no doubt that in e-Commerce , the "King Only Rules" but to become a King you need to win hearts of your customers which cannot come by throwing money around. The "True e-Commerce " in India will take 3-5 years where people are buying on internet not because of "deals" but because of "convenience", "uniqueness", "excellent customer service" and "great quality of products". The only e-Commerce companies which deliver all these while maintaining a healthy growth in business will be Kings in next 3-5 years. The kids who are playing video games and believe they will become one day Kings are only fantasizing about it. The future King is somewhere playing with the swords and taking time to play it right when time comes.
Lot of VCs have burned their hands in bad e-Commerce investments and are now realizing that these companies need hell lot of money and they have maxed out their Partner limit to invest. Like a herd, they invested and like a herd, they are dropping the ball now. There are very few VCs in India who think and see beyond the obvious and I would say my current investors fall in that bucket. I am fortunate to have them since they believe in what we are doing and how we are doing is not easy.
My parting words to all my entrepreneur fraternity are that e-Commerce is a marathon. Let’s run it together the right way. This is my humble request to all of you.