B&E: How much has Jabong grown in terms of profits and sales volume since its inception? Is this e-tailing business really profitable for Jabong?
Manu Kumar Jain (MKJ): We commenced operations in January 2012 and started with almost negligible sales. But today, Jabong is one of the most visited websites in India. From the perspective of unique visitors, Jabong gets around 1 million unique visitors on a daily basis. That puts its growth at 300%. In order to become profitable, we are taking some innovative steps. Parallely, we also rack our brains constantly to reduce our marketing and operation costs, et al. From an overall perspective, we are not profitable right now, and to transform it we need extra capital. But measuring from many parameters we are profitable.
B&E: E-commerce firms in India are facing numerous challenges in terms of logistics, infrastructure, payment options and consumer services. What do you suggest to overcome these challenges?
MKJ: Talking about infrastructure, one is just managing to reach out to consumers in the country. First, while delivering any product to the consumers in many remote areas, the third party service might take 5-10 days, so due to this delay in delivery, the consumer might lose interest. Secondly, it could also mean a huge variability. So it’s important to reduce the lead time of delivery, plus, the variability of the lead time has to be improved upon. To improve in this area, we have our in-house logistics service, which has substantially reduced the lead time. Yes, it’s true that payment gateways are not good enough in India and therefore, consumers fail to pay online in most cases. Secondly, the non-abundance of credit cards and net-banking further add to consumer discomfort to pay online. People prefer to pay in cash. That’s why to resolve this we gave them the cash on delivery (COD) option, where two types of consumers exist: who don’t have credit cards or netbanking and those who have but still prefer paying in cash. So for the former, we continue with COD but for the latter we have a service where we provide credit card machine at their doorstep. And customers are increasingly opting for this option comfortably.
B&E: But as you’d agree, innovations are required…
MKJ: It’s extremely important to have high quality customer services and that too end-to-end. Towards that end, we introduced a service – Stylist-on-call – where we aid the consumer from all fronts in order to help him with what he wants as per his interests. Also, we given a liberty to the consumer to call and return the product within 30 days for any given reason and that too at their doorstep. So these are some small innovations we have done in this area.
B&E: What kind business model do you think will work in the Indian market in the e-commerce sector? And what is Jabong especially betting on for growth?
MKJ: E-tailers who focus on fundamentals like assortment, services et al will grow and ultimately succeed. Extremely high quality customer service is one of the keys to succeed in this space. Companies that not only focus on big cities, but also are working on providing their products and services in tier II, tier III and other smaller towns and remote areas will eventually win. Different people are trying out different business models. Our fundamental belief at Jabong is that if we focus on assortment and customer service, and we should be able to grow our share disproportionately and should be able to make huge profits in the long run. It’s not an overnight journey.
Manu Kumar Jain, Co-founder & MD, Jabong.com
