Rajesh Nahar, co-founder of Cbazaar, an apparels-focussed e-commerce platform launched in 1998, is upbeat about the year ahead.

With deep discounting taking a back seat and quality gaining prominence, the company is looking to raise funds and expand, he told BusinessLine in an interview. Experts:

Being one of the first players in the e-commerce space, how has the year been for you?

We saw fantastic traction in India in 2018. It was driven by an increase in transaction value, drop in discounting and our omni-channel business strategy.

There was a change in consumer dynamics. That is, customers were willing to pay more for value. So, for instance, if our average transaction value earlier was ₹3,000 per person, it was ₹6,000 in 2018.

Discounting came down and so did our marketing cost. This means our bottom-line has grown much more than the top-line.

Omni-channel retail is also gaining traction, though not as big as in the US. We have five offline stores and plan to open three more in January.

What were the major challenges? How’s 2019 looking for you?

Apart from the regulatory and marketplace challenges, supply chain used to be one of the major issues. Earlier, between 2014 and 2018, many suppliers were placing counterfeit or substandard products (on the chain) as there was huge demand. Many businesses were raising capital to show growth through discounting. But that pressure is not there now and quality has gained prominence.

I think Chinese e-commerce is going to be a challenge and have a huge impact on the ecosystem. We compete with them on Western apparels. But our major focus is on ethnic wear so it might not have a huge impact on us.

Are you looking to raise capital? How easy is it going to be?

Yes, but we are looking at strategic funding rather than institutional. But it is going to be difficult to raise funds for pure-play e-commerce firms. Not many are making profits and their unit economics is not improving. So investors will be cautious.

Related Topics
comment COMMENT NOW