Naaptol: Online Shopping Portal

Naaptol: Online Shopping Portal

Sometimes you do not succeed at once but if you keep learning from mistakes you can get what Manu Agarwal was able to achieve. It was the third time he got lucky and now his venture which just started as a product research and comparison website has now grown into Rs. 10 crore online shopping group.

Started with a seed capital of Rs. 50 lakh in 2008, Naaptol .com has reported annual revenue of Rs. 10 crore for the fiscal year 2010, which is ten times as much in 2009.

The Story

Manu Agarwal graduated in 1992 from IIT Kanpur and went to University of Minnesota, USA to get his masters in electrical engineering and computer science. After working for 4 years in WSI, Silicon Valley, California he returned to India in 1998 to setup their Indian office in Powai.

Manu Agarwal

In the same year he left his job to start a company Design Expo Network Pvt. Ltd which designed websites and created massive scalable e-mail applications. It was however a service based company and Manu was more interested in B2C. He was joined by his IITK batchmate, Amar Sinha and they launched two Web portals in 1999 as subsidiaries of Design Expo Network – Criclive.com during the World Cup in April 1999 and Shubhyatra.com, a travel portal was incepted in September the same year.

Manu was quite lucky when after a year without making any profit; he decided to sell both these portals. During the dotcom bust both portals were shut down by the acquirer companies. In 2001, he decided to sell Design Expo as well to a Canadian payment systems company called SLMsoft.

In 2003 he started another venture called ANMsoft technologies. The company provides e-solutions but Manu is no longer an active part of it.

Continuously seeking new ideas, this time in 2008, Manu launched another e-venture,Naaptol.com For a year, the company did not make profits as it was simply disseminating information. Soon, however, this became its USP. Within a year, the company started selling goods as well.

Business model

Advertisements on Naaptol
Offline Lead Revenues
Online selling partnership
Micro sites for Sellers

Naaptol makes money by charging sellers for the leads it generates for them. Also it charges brands from advertising on the site.

60% of their business today comes from reaching out to the consumers, through the print advertisements. 30% of our business comes in from reaching out to consumers through TV advertisements. And about 10% of our business comes from the retail space.

Margin with the dealers: Depending on the category, the margins in this sector is between 15% to 30%.

What is unique about the Naaptol?

Naaptol is essentially a comparison based social shopping portal. It gives products complete with their specifications and reviews to help users make informed decisions. And it helps both sellers and buyers together. With the growth of the Indian economy and the changing standards of living there is a sudden upsurge of brands and stores, both online and offline, that claim to sell the best of the products at the most reasonable prices. But what is the guarantee that the price offered to them is the best?”

“How does the consumer verify the facts? It is not possible for him to run from pole to pole seeking the best prices or deals. If he purchases online he loses out on offline retailers and vice versa. Thus naaptol gives him the benefit of buying from both online and offline retailers at one place.”

Problems faced

  1. Raising capital for investment. Unlike Silicon Valley in India finding investors is difficult.
  2. Selecting the wrong products and call centres, and making other mistakes.

Challenges

Poor customer service: Customers of naaptol have been critical of its services and delivered product quality. Online reviews about the company are not positive and could hamper its image and business. Winning trust of the customers by better service and ensuring non-defective and timely product delivery will be a big challenge to the growing company.

Future plans and targets

  1. Increase transactions from 5000 a day to 50,000 a day.
  2. A turnover of Rs.200 crore for the fiscal year 2011
  3. Raise around $25 million (Rs.110 crore) in the next couple of months to start a private sales section, Privileged Deals, on the Website.
  4. Go digital with a 24-hour TV shopping channel.

Advice to entrepreneurs

“Rather than trying to raise capital directly from VC’s it is advisable to go through the advisors. Giving them a percentage on the investment is better than going through the tedious task of raising capital directly. And the risk factor is also too high.”

“One must remember raising finance is important but time consuming. Entrepreneurs need to decide upon the right time to raise finance. You should never be too early or too late. Timing is essential.”

Summary

Founded: January 2008

Seed capital: Rs. 50 lakh

Turnover:

2008-09: Rs. 1 crore

2009-10: Rs. 10 crore

Based in: Mumbai

Follow Naaptol on Facebook, Twitter and YouTube

 

References and further reading:

1. Moneycontrol

2. Economic Times

3. Yourstory.in

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