Tell us what had driven you to venture into e-commerce and start Jabong?
I had always wanted to be a part of startups and to convert ideas into reality that can be scaled significantly. I have worked with McKinsey, Microsoft and Maruti and during my MBA, I started my first venture AquaBrim. In 2011, we could see that E-commerce was one of the most promising sectors with a growing internet user base in the country. It was most apt to be a part of this growth and make a huge impact in the country.
What is the best marketing move that you’ve initiated which sets you apart from your competitors?
There is not one but multiple small and strategic moves that have created the brand recall which Jabong has today. However, I would say the absolute timing of when to focus on online applications and when to move to offline and then creating a balance between both has been one of our strongest differentiations.
How aggressively are you planning to expand your market share? Are you exploring other avenues apart from the segments you are already serving?
We have always been considered as the most aggressive player in the market. In an era where a new e-commerce firm crops up every month, we matured very early in the market and began to be seen as a brand entity which is here to stay. We aim to be the one-stop fashion destination in India. We don’t have any immediate plan to expand to other categories so we’ll keep focusing on fashion as we have to do a lot here.
For instance, we are coming up with work of well known designers like Rohit Bal to launch their collections on Jabong. Similarly, we have brought many well-known international brands like Dorothy Perkins to India.
If you are to attribute Jabong’s quick success to just one thing, what would that be?
Having a vision of building the best-in-class infrastructure helped us sail smoothly when most start-ups struggle to scale up. And to achieve it, we formed an excellent team.
How do you deal with competition both internal and external, like positioning Jabong vis-à-vis other players, sustaining a team, hiring right, emergence of new players and other external factors?
Competition is necessary for a business to thrive and must always be promoted as it motivates you to bring your game up. We deal with the competition by thinking ahead into the future. We have learnt exactly when to take critical, harsh decisions to ensure that the business suffers at no point of time.
Role of mentoring in retaining critical talent acquired is immense. I believe, it is a leader’s responsibility to add value to his team members by mentoring them at each stage, thereby helping in developing both hard and soft skills. We offer a variety of incentives and rewards as a motivation to our employees.
Where do you wish to take Jabong in the next five years?
We aspire to be the most admired and largest fashion e-commerce website in India.
How do you handle consumer complaints and bad word of mouth?
I consider consumer complaints as a mirror that reflects where we stand and this helps clear our vision of what we aspire to become. Customer complaints can give businesses a wake-up call when they’re not achieving their fundamental purpose–meeting customer needs. Jabong has got an excellent customer centric culture where all the relevant leaders are accessible for any concern.
Jabong aspires to be the one of the most loved companies in the country. It is imbibed in our culture to see complaints as an opportunity given to us to further improve.
What is your take on the inventory-led v/s marketplace model?
Though both models will exist in some form, I am of the opinion that a mix model (Market place+ inventory led) is what the future of the business will be. The advantage offered by the marketplace model is multiplied scale and quick growth. The most successful firms in the sector will be those that can create a sustainable platform by going beyond the critical number of vendors and customers and using the scale afforded to grab market-share quickly.
Once the foundation is established, the Market place model helps create a more sustainable business model, giving the firm flexibility to think of the next big idea/ sector it wants to foray into. This model, however, is not without challenges – vendor and inventory management becomes critical to ensure customer satisfaction. Managing the vendors and ensuring the best are represented by the brand that will go a long way in creating a long-lasting marketplace model.
Jabong has seen a continuous growth in its marketplace sector since its inception.
What has been your single biggest challenge in sourcing and retaining talent ever since you started?
Getting smart, passionate, high- energy people to join, while we dream big, is according to me the most crucial aspect of our business. Fortunately, I have always managed to get every person I choose for a particular role and I have told only one thing to them “There is a lot to do, but all I can promise is that the journey would be great fun”.
How do you see the Indian Internet business shaping up in 2014? Can we see the emergence of new niche players or will this year be one of consolidation?
In a span of 3 years, the industry had seen funding by around 50 Venture Capital firms to the tune of 900 M$ by mid of 2013. What is even more staggering is that the funding found home in >50 firms. While ideas and new business models will continue to matter in this sector, with time, factors like scale and customer mind-share will start gaining importance. Reach, network and market share will be the deciding factors.
Investors as well as the players in the segment are aware of this eventuality and are gearing up towards the same. While this means that we will see opportunistic play from smaller firms looking to create a niche following and market the same for a buy-out, the investors will aggressively start backing the larger players. While consolidation is the apparent eventuality, the period of consolidation would be harder to predict, with smaller firms trying to balance their time to maximize returns.
According to you, what is the most significant difference in the functioning of e-commerce players in emerging and developed economies?
There are a couple of differences that set up the industry dynamics slightly differently in India vs the developed world. While low internet penetration and lack of awareness/ infrastructure to access e-shopping remain systemic hindrances, these will be solved with time. One needs to remember that in a country like India, penetration expressed as % counts for very little – the absolute numbers – >150 million internet users with the number growing at a fast pace, is fodder for a big e-commerce story. The real issue, in my mind, is the consumer mindset.
Trust and adoption and customer maturity are the real issues that need tackling on an immediate basis. The symptoms can be seen very clearly – heavy discounts, >60% Cash on Delivery, frequent flash sales – all points to a customer segment that, even if aware, hesitates to take the plunge. It is not the lack of a credit card or debit card that stops the customer from paying. It is actually trust in quality/ basic belief in the system that drives the Cash on Delivery behaviour. The good news is that we are seeing a positive trend in this front with customers understanding and reacting maturely to the market.
With the growing young population mix in India exposed to the developed world through TV series, Internet and literature, the industry will most definitely see these softer issues disappear with time. Firms in India also have the added advantage of skipping a couple of steps, learning from the e-commerce practices in the western world and adapting the same to our part of the world. This means fewer mistakes and faster stabilization.
Tell us more about your personal journey. How had been your life prior to Jabong? Did you always want to be an entrepreneur?
I have always believed that one should create things and make a difference in the society. I was involved in some or the other start-up at all points of time, sometimes playing the role of a strategic consultant, while other times managing the ship as the Captain. Even during my McKinsey days, I used to conduct lectures in various institutes about entrepreneurship.
Do you think MBA is mandatory to do well as an entrepreneur? How has your education at IIM helped you so far?
There are engineers fresh out of the top colleges of the world who are fascinated with the idea of working in a start-up (at times without realizing what it entails). Then there are MBA’s who have spent 5-10 years in large corporates and want to play a larger role or be a part of building something grounds up. Youth with passion, if provided with equal opportunities to grow, pick up regardless of their education background
You don’t have to be from the premier institutes, but just need to possess 3 main attributes: First, Out-of-the-box thinking, second, being open to ideas that have never been tested, and third, being comfortable in breaking assumptions and showing courage in making decisions to maintain the delicate balance between logic and creativity. The candidates should be self-driven souls who don’t shy away in taking the ownership of their areas’ works.
IIM has been successful in bringing together like-minded, ambitious souls who wish to make an impact. However, nothing beats the experience you get while you are building your own company. And no frameworks/concepts theory can make up for the “On the job learning”.
A piece of advice for aspiring entrepreneurs in India.
My advice to entrepreneurs and students looking to join a start-up environment would be to set the right expectations from the onset. Graduates who join start-ups should be passionate about their work, have a deep hunger for accountability and real responsibility that has a direct impact on business and customers. They should be willing to hone their own skills while simultaneously developing new expertise.
One thing that is common in all entrepreneurs is their belief in going out and trying and not limiting their ideas and hypothesis to only planning and strategizing. Most successful entrepreneurs started before they were ready. The truth is you are never fully ready but you get ready while you are executing. It’s okay to make mistakes as long as you learn from them and keep correcting yourself directionally.
And finally, tell us how did you come up with the name Jabong?
This was the name which our team along with our well-wishers and supporting partners came up with and really liked it.
Praveen Sinha is the Co-Founder and Managing Director of Jabong. Prior to Jabong, he has also founded AquaBrim Pvt Ltd. He has worked previously with McKinsey, Maruti Suzuki and Microsoft. He is an engineering graduate from Delhi College Of Engineering and has completed his MBA from Indian Institute Of Management, Calcutta.