EMART SOLUTIONS INDIA
BUSINESS: Creating and managing e-commerce platforms for brands
FOUNDED IN: July 2009
LED BY: Aditya Bhamidipaty, Srikanth Chunduri
COOL QUOTIENT: Has found a niche in a cluttered e-commerce market
V.R. Kaundinya, Managing Director of Hyderabad-based seeds company Advanta India, had not given much thought to investing in start-ups until two years ago. That was when a lawyer-friend introduced him to Aditya Bhamidipaty and Srikanth Chunduri, founders of Emart Solutions India.
The duo set up Emart in July 2009 to create exclusive e-commerce platforms for brands and provide other web related services, such as managing loyalty programmes and product delivery. It did not take long for Kaundinya to be convinced about Emart's prospects. He not only pumped money into the company himself but also got his friend K. Raghavendra Rao, Chairman and Managing Director, Orchid Chemicals & Pharmaceuticals, to do the same. Rao and Kaundinya are among the angel investors who have invested under $4 million in the company. "Management of loyalty programmes and customer databases will be crucial to e-commerce in India," says Kaundinya. "This was what attracted me."
Emart differs from regular e-commerce companies, such as Flipkart, in that it not only sells products through its domain GoVasool. com, but also builds e-commerce marketplaces for brands. This model is called 'white-labelled e-commerce'. Emart works with 250 brands, including Adidas, Fastrack, Nikon, Procter & Gamble, and Samsung.
"A multi-brand website is like a supermarket, while our e-commerce site for a brand is like an exclusive outlet." says Bhamidipaty, CEO of the company. Chief Operating Officer Chunduri points out the advantage of exclusivity. "What happens with portals that sell multiple brands by heavily discounting them is that brands are commoditised. We do not discount a company's products unless the company decides to," he says.
Asheesh Raina, Principal Research Analyst at Gartner, a technology research and advisory firm, says white-labelled e-commerce in India has great potential as more and more brick-and-mortar companies turn to the Internet to sell their products. "Everybody is trying to pick a niche in e-commerce and only the smart players will survive," he adds.
Chunduri and Bhamidipaty, both 32, go back a long way, having met in high school in Hyderabad in the mid-1990s. Chunduri attended the Indian Institute of Technology, Madras, and later Duke University in the United States. Bhamidipaty graduated from Jawaharlal Nehru Technological University, Hyderabad, before going on to the Indian Institute of Management, Ahmedabad. They kept in touch, and were keen on turning entrepreneurs. Both worked overseas, Chunduri in New York, as a management consultant, and Bhamidipaty in London, with a software company before moving back to India, to Bangalore in 2008.
Emart entered the online group buying segment the same year, but found it crowded and realised their model was not viable in the long run. But they made an important discovery: companies in India getting into e-commerce have to work with multiple vendors for technology, product delivery and customer care. What if they provided a one-stop shop for all such services? "We are beginning to work with e-commerce portals, too, but our focus remains brands," says Bhamidipaty.
To a large extent, Emart is modelled on companies such as GSI Commerce, the American e-commerce and interactive marketing services provider that eBay acquired in 2011 for $2.4 billion. It currently processes 8,000 orders a day, but remains tight-lipped about its financials. All Chunduri will say is that Emart has been more than doubling its revenue every year and will do so this fiscal year as well. Profit margins? It turned profitable for one quarter in the current fiscal year. "It was a question of whether we stick to our profitability or scale up," says Chunduri. "We chose to scale up."