CEO | 02 Apr 2004
The online experience does provide a platform for us to build offline business. But it was never easy to build a brand through a dotcom
Swimming against the current is fraught with risks but those who last the course often have big success stories to tell. Vishal Anand, CEO, Mahamaza.com, set foot on the Internet landscape in 1999 when it was the most fashionable thing to do. The BITS Pilani-alumnus saw huge potentials in ecommerce and set up Mahamaza Ecomm Ltd with a unique plan of bringing B & C category towns across the country into the ecommerce fold. But no sooner Mahamaza.com was launched, the dotcom wave petered out leaving the Internet domain pockmarked with failures. People’s faith in the web world had corroded and entrepreneurs debunked their Net plans. But Anand stuck to his plan and built his ecommerce network brick by brick. Today, he represents one of India’s leading ecommerce companies with an annual turnover of Rs 80 crore. What is striking is that his business associates, called web advisors, are located in relatively unknown places like Khadoli in Gujarat or Biswanath Chairoli in Assam.
Mahamaza.com functions through a network of over two lakh virtual stores that operate in the small towns where retailers and dealers don’t have the wherewithal to maintain inventories of the latest appliances and gadgets. The company helps people own virtual web stories for a fee of Rs 5,100. And the web store owners in turn power the merchandising of the products and web stories for a fee or incentive.
Mahamaza.com is now planning to foray into brick ‘n mortar retailing. The company is setting up its first retail outlet at Lucknow. Anand provides a peek in the company’s past and a look into the future in an interview with Rajiv Raghunath of exchange4media.com. Excerpts:
Q. Buying on the Net is a difficult decision with most customers who want the ‘touch and feel’ of a product before opting for it? How did you overcome this barrier?
The ‘touch and feel’ factor is universal in that most customers across the world want this experience before making their purchases. But in the segment that we are in, that is appliances and electronic gadgets, the product knowledge is sufficient for someone to make a purchase. After all, people know what an LG television is like and would place an order based on the product specifications.
Q. In the initial phase, finding a product to merchandise would have been a tall order. How did you get started?
We began with Kenstar products. They agreed to be with us because it did not entail any investment from their end. Today, we have tied up with brands such as Nokia, Hero Honda, LG, Casio, National, Madura Garments, BPL, Onida, Lee Cooper, Kinetic Engineering, HCL, Bharti Telecom, Samsung, Panasonic, IFB, Philips, ICICI, Reebok and Atlas Cycles
Q. But why did you think of the B & C category towns to do business?
I saw that in the interior places people did not have the wherewithal to travel outside and bring back the latest appliances and gadgets. Yet they aspire to own them. The local dealers in such places also lacked the resources to maintain inventories of expensive appliances. So I hit upon the plan to develop virtual web stores that will showcase the products on offer. A customer could run through the list and place an order with the web store owner. The delivery of the product would happen thereafter.
Q. You would have had to build awareness about such a business practice before leaping into it?
At the very outset I knew that conventional advertising wouldn’t help. I try to locate people who wished to earn by being the ecommerce network. By creating an alternative source of income for people in the towns, I was able to build a vast network of web store owners. They could run their businesses from the local cyber café.
Q. Did the volume of business pick up fast?
We began with 4-5 orders a day. It grew to 22-25 orders a month, then 3-4 orders a day, and now we see 150-200 orders a day.
Q. While you merchandise known brands, have you been approached by some of the smaller brands with offers of higher margins?
Yes. We have in our portfolio brands like Maharaja Whiteline, Beetle phones, etc.
Q. What’s your reach and revenue now?
We did business of Rs 80 crore last year. This year I expect this to go up marginally to Rs 85 crore. As for the reach, we are networked with nearly three web store owners.
Q. It emerges that you getting into offline retailing business. Are you really using the online brand to migrate to brick ‘n mortar business? Perhaps, it was a lot easier to build a brand through online business.
Yes. We are starting retailing business. We are getting this started from Lucknow. As for the brand equity, the online experience does provide a platform for us to build offline business. But it was never easy to build a brand through a dotcom. Public perception of dotcoms is still by and large negative.
Q. What your reading of business prospects on the Internet? Are you looking at expanding your ecommerce business?
We know by now that eyeballs don’t matter on the Internet. What matters is the revenue model. As far as Mahamaza.com is concerned, I am planning to expand the number of web store owners to 5-6 lakh in the next two years.
Q. How do you propose to grow the business?
I intend to make educational presentations on the business at numerous places and establish one-to-one contacts with the people.
Q. What does an average web store owner earn in a month?
Anything between Rs 50 and Rs 25,000.