This brand has built credibility for homeshopping over a span of six years. Homeshop 18 launched at a time when ecommerce had not changed the game for marketers and customers and has not missed a step while keeping up with changing shopping trends. Rashi Bisaria of Pitch spoke to Sundeep Malhotra, Founder and CEO, Homeshop 18 about its sustained growth, the challenges of customer experience management and the brandâ€™s successful business model.
How has Homeshop18 evolved from the time it launched?
HomeShop18 started the business of virtual shopping and pioneered the concept of home shopping in India over six years ago. Since it was a new business model for India, consumer knowledge did not exist and we had to start everything from scratch. In the beginning, there weren’t too many people who believed this was possible but today we have grown exponentially and are a strong team. We are India’s first 24-hour shopping channel that offers customers a wide range of products across multiple categories such as books, mobile phones, electronics, apparel, jewelry, home & kitchen etc. HomeShop18 set a benchmark in the e-commerce industry by offering innovative, differentiated and demonstrative retail experiences on the internet in 2011 with the launch of its website HomeShop18.com. It later redefined the way consumers shop with the introduction of mobile shopping in 2013.
The philosophy behind our business is building credibility for the domain called ‘Home Shopping’. All HomeShop18 products are genuine branded products. Our business model is a direct-to-home or an inventory model. Typically, a retailed product involves a manufacturer, distributor, wholesaler, C&F agent and retailer. We bring the products straight from the manufacturer to the customer’s door wherein, the inventory is held by the manufacturer. We bring the ability to demonstrate the widest range of products and an alternative distribution model that provides value to both the brand and the customer. We provide the easiest way for an international brand to enter the country or for a city-based brand to go national.
What were your sales like in 2014? How much have you grown year-on-year?
HomeShop18 witnessed a growth of 55% as compared to the last fiscal year. HomeShop18 has comfortably captured 2/3rd of the market with nearly 70-75% of the market share in television shopping. Our customer base has increased to 10mn customers and we have a current reach of 50 million households. Mobile is a very large and important category for us and we are seeing a dynamic growth of nearly 100% Q-o-Q on our mobile platform.
How many products do you sell per day on TV, Web and mobile respectively? Which media gets you the maximum sales and why?
TV being the oldest business contributes the maximum sales of 70% and web and mobile cumulatively contribute 30% to our total revenues. Reach of TV in India continues to be 8-10 times that of Internet, hence TV Home Shopping will play the role of mass reach-high volume sales, while the web and mobile business will continue to attract the digital consumer.
What kinds of trends are you noticing in consumer behaviour?
Indians in the past have relied heavily on the touch and feel of the product and were not very comfortable with online shopping. But in recent years the trend has drastically changed. The Indian eCommerce market is expected to reach $6 billion in 2015, a 70 percent increase over 2014 revenue of $3.5 billion according to Gartner, Inc. This clearly showcases a change in trend of people being comfortable with shopping online. Customers today trust virtual shopping platforms and see them as a credible platform for buying.
The Indian online business environment is now at a stage where players are aggressively looking at a suitable model to attract maximum customers and brands. Today, consumers are driving the change where website, television and mobile come together to provide a better and convenient shopping experience. Also, the increasing use of smartphones, laptops/PCs and growing Internet penetration in Tier II and III cities have led to greater adoption of online retail by the masses, supplanting the absence of physical retail for a lot of global brands. Today, emerging markets account for 40% of our consumer base, coming from cities like Guwahati,Patna, Lucknow, Ahmedabad, Jaipur and Dhanbad. HomeShop18 strives towards encouraging buyers to purchase big ticket items and making the shopping experience memorable through various offers, easy EMIs, free delivery to the doorstep, hassle free return and cash-on-delivery on every purchase made.
How do you maintain a consistent customer experience across all channels?
One of the biggest focus areas for us is to provide a unified and synchronized Web, TV and Mobile experience. This entails some dedicated customer-engagement methods which include live streaming of HomeShop18 TV on the website using their laptops, tablets or mobile phones. Also our uniqueness is offering customers rich demo video of various products. Our research into consumer behaviour has revealed that in the absence of touch and feel of physical retail, holistic product information that pre-empts any query that customers may have is very well appreciated. The focus across the three channels is to bring ease of shopping and consistent product and delivery experience.
6. How important is customer experience management for you and how do you ensure it?
A happy and satisfied customer is our priority so we are focused towards garnering greater customer engagement by enabling ease of shopping. At HomeShop18, we cater to over 2,00,000 calls per day and there has been an increase of 50% since August last year. Our customer relationship management team is consistently working with our operations wing to improve service by handling product placement calls, queries and redress complaints, if any, at the earliest. To ease payment options, we have all alternatives from EMIs, COD and card transactions. We have a stong mechanisms and deliver to 3000+ cities and to over 25,000 PIN Codes in India.
The back-end driver of our business strategy is a dedicated investment in Data Analytics for insight into consumer behaviour. This has enabled us to experiment with portfolio expansion across products and categories, helping us leverage those that cater to higher customer demand. We offer specific products and share promotions basis information gathered. During the Diwali festive season, we sent out approximately 10 million SMSs to inform our customers about the interesting offers and product promotions.
Any innovations you have come up with in the last couple of years?
During the launch of HomeShop18â€™s marketing campaign, â€˜Shopping Makes Me Happyâ€™ the company innovated with its campaign spread by being the first Indian brand to use WhatsApp to reach out to its customers through viral posts and videos, entertaining memes, exciting offers and new launches. With strong penetration of 70 million active-users in India, WhatsApp is successfully used to reach its customers across the length and breadth of the country. We recently marketed the Micromax Canvas phone, Shilpa Shetty Kundra (SSK) range of sarees through this medium.
What 2 lessons have you learnt from your journey in the Indian market?
Indians take time to change but once they do they adapt very quickly to change. The growth of the ecommerce industry is a witnesss to this behaviour.
Which medium will you be investing the most in and why?
HomeShop18 is strengthening business across all its channels â€“ TV, Web and Mobile.
HomeShop18 has a fairly large television shopping business, catering to a diverse audience. A sizable population of our audiences live in Tier II and Tier III cities and form 40-45% of our total customer base. To cater to this wide range of customers, HomeShop18 advertises across a range of mediums-TV, radio, print and digital. Apart from English, the company has also advertised in many regional laungauges like Hindi, Gujarati, Marathi etc. and also, the mobile platform.
How important has mobile become as a medium for you?
With over 900 million mobile users in India, mobile shopping is fast gaining popularity due to increased customer convenience. Thus, mobile is a very large and important category for us. We are seeing a dynamic growth of nearly 100% Q-o-Q on our mobile platform.
HomeShop18 records a sale of 3-4 lakh mobile phones per month. This is a clear indicator of mobile increasingly becoming an important screen of information for Indian customers. Low cost 3G/4G devices will certainly help tap into Homeshop18â€™s large customer base that will in turn use these services to shop online without facing any connectivity issues.
At HomeShop18, we feel that mobile is a unique platform and hence the consumer-experience needs to be differentiated for this medium. We believe that with increasing internet penetration, our mobile app that allows a convenient interface to shop will see sizable traffic, especially from emerging markets. Our Scan & Shop dynamic display wall is another m-commerce initiative that has helped us increase transactions via our app. Also we see mobile as a complimentary shopping medium for our consumers. The same consumer shops on their laptop and when on the go, they shop on mobile from our app.
What does the future of ecommerce look like to you? How will it evolve in the coming years?
With hundreds of websites currently operating in the sphere and many more to join the space, it is obvious that virtual shopping is becoming a game changer in India. The industry is now poised for consolidation between e-commerce brands and even online and brick and mortar retailers as we see. As a leading virtual shopping retailer in India, we are excited to be a part of this digital shopping evolution. While some Indians still prefer touch and feel of the product before buying it, many have adopted to the e-commerce route to find the best products from the convenience of home. Further, online shopping has its benefits of easy payment methods (cash-on-delivery, EMI etc.), variety and exchange option, easy at home delivery amongst many others. It is our view that virtual retail comprising of e-retail, home shopping on TV and mobile-commerce will be a game changer and thus, a bigger and a substantial part of the shopping lifestyle in India.
For retailers, virtual commerce has saved inventory costs and increased audience base. It has also addressed consumers in metros and emerging markets that are looking for more varieties with minimal physical browsing and equivalent discounts.