Jabong's co-founder and Managing Director Praveen Sinha studied engineering at the Delhi College of Engineering and did his MBA from IIM Calcutta. While studying there, Sinha leveraged his engineering background to start a water management venture Autobrim, a wireless plug-and-play solution that can automatically switch on or switch off the water supply. Sinha developed the product and finally launched it after he finished his course at IIM Calcutta.
The venture continues to this day. Praveen then interned with Microsoft and went on to join Mc Kinsey, but by this time he had realised that entrepreneurship excited him. While looking for funds to pilot a fashion business, he met Arun Chandra Mohan at an investment firm. They came together to start a venture, Jabong, in September 2011.
Sinha talks to Taslima Khan of Business Today about the Jabong story.
Q- Tell us something about your early days.
A- We started in a one-room office at Golf Course Road, Gurgaon. We launched the beta version of the website in December 2011. Getting the pilot fund was definitely the biggest challenge but getting the right team members in place was also an equally big challenge, because no one knew us. By January 2012, we went live and by March, we were getting bigger. There were certain milestones which we had set with our investors. We were able to beat it by a huge margin. I would not like to name our early investors, but the pilot money was less than a million dollars. But the second round was not so difficult because we had exceeded the expectations of our investors. Lots of investors started showing interest. We were able to sell our concept really well, that is why we succeeded.
Q- By 2012 you were competing. Who were the other guys competing with you ?
A- The major competition for us was from BigShoeBazaar which had re-branded to Yebhi, Fashionandyou and Myntra. But none had a clear positioning. When we entered, we set the timeline for us to be the leading fashion destination. We were able to achieve it. Within 18 months (by second half of 2013) of starting around October 2011, we were number one in fashion, ahead of all others. We started young and with nothing, so we had to overtake everyone. Myntra was the last one we crossed. We were neck-to-neck with Myntra in the first half of 2013. By the second half, we had overtook them in terms of revenue and number of orders.
Q- What did you achieve in the first two years that made you think you were there?
A- I may not recall the numbers, but definitely in terms of Comscore numbers. In 2013, we were the only ecommerce site in the top 10 Google search. The first time we celebrated was when we crossed 100 orders in January 2012. We have always celebrated crossing milestones like one million likes on Facebook two years ago. We celebrated some difficult brands that wouldn't come easily, especially when we were small. We celebrated launching our ERP.
We have taken the lead with launching international brands. We did launch a few of them in 2012 and by 2013 we were winning. By 2015, others copied us. Our positioning is also different. We are not general merchandisers. Jabong has one of the best online fashion properties, Jabong Online Fashion Week.
Q- Why has Jabong shied away from acquisitions?
A- We have stayed away from acquisitions because I don't strongly believe that each of the strategic partner of vendor needs to be acquired. Acquisitions are to be considered only if it gives me a competitive advantage or something that we can't build internally. I am not against acquisitions, but to my mind a scalable model is a partner-driven model. We have always treated our brands and service providers as partners.
Q- Hasn't Jabong been slower in launching private labels?
A- We started with our private labels in 2012 with Phosphorus. We were the first ones to do many things that have become practice today. Somehow we could see how the market will evolve. In fashion we were the first to start a managed marketplace. We were the first to start with private labels, though we were not screaming about it. We were focused more on developing the right product and the right quality.
Q- How is your discounting and advertising spend as compared to competitors?
A- We try to match on price points for brands that are common to all platforms. I think discounting and couponing has to be stabilised to make the business sustainable. It is like the one-rupee airline ticket. Three airlines will shut down and then it will become stable. My sense is to operate at price points that are sustainable. Discounts on Jabong are market-driven and it is very complex. So it has fluctuated. It has gone to peaks and then it has stabilised. I think like it has happened in other industries like telecom and airlines, discounts have to be stabilised in ecommerce also.
Q- How comfortable are you with respect to funding?
A- Today we have raised enough and we are comfortable. Raising money is also a matter of personality. For some people it is never enough. But if you ask me one and half years later, my answer may be different. We have enough set of investors who have a long-term view and who have enough appetite, interest and confidence in reinvesting in us. Also there are enough number of new investors that are interested in us.
Q- What is your focus now?
A- The focus now for us will be a good balance of growth and health. It will not be all out growth at the cost of health. My first is to close the Global Fashion Group (GFG) roll out. It will take about three months more. After that, Jabong will not need funds, GFG will. So the whole discussion and dialogue will change. It will put us in a good position of strength, provided it is executed well. We will be able to retain people who are looking for global exposure.
Q- How are you hiring now? Experienced people from big organizations or from startups?
A- Every leader will have their own way of hiring. My criteria is always to screen them on the basis of what college or company they are coming from. I only go by their traits. Having said that, it is also about the need of the organisation now. If earlier I was looking for people who could build, today I am looking for people who can create processes and scale. That way our requirement has changed. When we started, it was not that we did not want experienced people but actually there was no one with experience in ecommerce. Personally, I still like people from startups. We have Sachin Sinha who started his own venture twice.