How tech-driven ShopClues eyes profits

The eCommerce industry has seen a lot of technology investments. Alas, it also has consistent investors expectations to generate proportionate revenues. How ShopClues is using technology to keep increasing margins while enhancing customer experience and meeting the needs of a scaling business?

ShopClues has always been using using technology to its best and is equally focussed on profitability, growth as well as its technology investments. We are likely to be profitable by the end of 2016 and in this growth, technology plays a very pivital role because it is only technology which works in an exponential manner while people work in a linear manner. There are many ways through which we are using technology to monetize Shopclues platform: one is selling services to our sellers. For instance, selling the marketing services like SMS packs, email packs, domain names, etc, which help the customers to directly market themselves using our technology systems. The second and the more revenue generating part is that Shopclues provides a platform for sellers to promote themselves via our website or our platform. As in Google search, where you see organic search and at the same time there are sponsored search events which are clearly marked as sponsored. We also follow the similar approach and Shopclues has a real estate on shopclues.com wherein currently all the listings are organic but eventually it will be an activity to monitor while sellers can promote themselves. Along with this, there are properties like Sunday Flea Market, which are very focused on customer connect. While the other eCommerce portals have lower number of transactions on Sundays, we have much more orders and transactions on Sundays. To an extent, we are monetizing this property but all this needs to be done very smartly so that we remain relevant to the customers. Talking about containing costs through technology, one is shipping and the other is operational costs. Shipping is one of the largest components of losses for any eCommerce company. Shopclues managed to bring down per shipment cost to approximately Rs 85 while companies like Flipkart and Snapdeal are shelling out approximately Rs 140-150 per shipment. We are using a combination of third party logistics, while others rely on 2-3 logistics partners, we have a network of nearly 30 logistics partners.

Automation is something many eCommerce players are betting high on. Please brief about how automation is making its way at Shopclues?

eCommerce sector as a whole is doing a lot on automation but we are doing it very effectively and that is one of the reasons the number of employees in the technology division is less as compared to others in comparison to equivalent numbers of orders. Shipping, being a very critical component of the whole eCommerce process is a priority for us to get automated. Automation will certainly bring down the shipment cost and we are working on that front so that customers can automatically select the local or the regional right third party logitics provider. We are trying to penetrate this market deeper and tie up with local partners third party vendors which are going to do the logistics for us and our technology is going to support all this. We are also focussed and investing heavily in automating the customer support operations and improve customer engagement. We are using automation to bring in growth by giving wider choices, better selections, and better discoverability and right price limit to our customers.

Strategizing the IT budget is a critical component for any industry. How do you bifurcate when it comes to IT spending?

We like to give our customers as much choice as they want. As of now, 70% of the traffic comes from mobile including mobile apps and mobile sites so the spending in this category is high as compared to the other. To grow well, we are relying on the ecosystem while we develop very core things in house while the non-core things are outsourced to a third party.

What are the challenges with the analytical tools you use?

Analytics is going to be a very strong focus area because we are going to expose our analytics to our internal business teams, to find views of the customers. We are evaluating a few third party vendors including SAS and extend the same analytics to our sellers as well, so that they have a better view of what is going on and how can they improve themselves.

Imaging technology is playing a very leading role in driving sales for eCommerce companies. How are you using this technology to drive your business?

We are using imaging technology to a pretty good level and have included the feature on our android app where in the users can tap on an icon and then can get similar looking items, these items might be slightly different and there are a few dimensions when you look at a product, we have a very good technology here which identifies the customers’ preference and suggests very similar looking products, if you try this our technology is much better compared to our peers. We treat customers with a visual experience and want to become a preferred platform for sellers. We are going to make our sellers technologically sound, help their business offline or online through technology. While other players may invest in technology that may inject their team with steroid, but we don’t want that steroidal growth in our organization, because then it becomes counter productive.

On the scale of 10, if you have to rate the company in terms of digitization, how much would you give to yourself and why?

I would rate myself an 8. The focus in terms of digitization is the customer care area. We are going to digitize the things further with the minimal need of manual intervention.