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ShopClues.com, the new kid on the block

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DQI Bureau
New Update

ShopClues.com, the 35th e-commerce start-up in India that has a distinct ‘managed marketplace' identity online, has quickly risen since its launch in January 2012, recording a growth of nearly 90 times in its first year of operation itself.

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In a period of 12 months, the firm has touched `100 crore in revenues and is now targeting over `350 crore this year.

The company's founder and CEO Sandeep Aggarwal, an erstwhile equity search analyst at the Wall Street, along with its 3 other founders-2 of them with a tech background having worked with the likes of Oracle and Ebay, set up shop in India with a permanent office and a core team in Gurgaon and with its founding office still in Silicon Valley, USA, where it started off in September 2011.

Zeroing in on the Right Model

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The stupendous growth in such a short duration can be clearly attributed to the use of technology as Aggarwal reveals that its managed marketplace identity distinguishes it from several other e-commerce companies that use the inventory model.

"The use of the inventory model in e-commerce business is very harsh, here you buy 100 pieces for `10 each and sell for `12 a piece and overall if you are left with 10 (inventory), your `2 profit is wiped out. And that is not truly harnessing the true power of internet. Even my grandfather was doing the same, how am I doing things differently, that too with the technologies that are available to me but not to my grandfather?" says Aggarwal.

The trick was to think innovatively and put up a different model altogether, setting it apart from the other existing e-commerce players.

"ShopClues.com is a managed marketplace, our challenges are very different from a typical e-commerce company. We are constantly evaluating new technologies and new approach to the problems and look to solve it fundamentally," says Mrinal Chatterjee, vice president, engineering, Shopclues.com.

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Keeping it Networked

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Based on the latest technologies, ShopClues strives to deliver a good shopping experience to its buyers and an unparalleled selling platform to its merchant partners. In order to give its sellers and buyers a fulfilling experience, it has set up an online technology platform which both parties can utilize and only need to bother about their merchandizing and pricing strategies.

It offers fulfillment services through its current and in-the-offing interconnected fulfillment centers/cross-docking facilities.

"We are doing 5,000 transactions a day, we have 6,000 different sellers with us, we offer more than 2,000 categories of products and if you exclude books as a category from the catalog of any e-commerce company, we have the 2nd largest selling catalog," says Aggarwal. Managing and keeping everything interconnected is a daunting task indeed.

Relying on Technology

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Technology has a sizable part of its overall spend, and the company is constantly increasing its IT spend to keep up with the demand of the business. All the technologies have been developed in-house.

An ecosystem of IT partners has been developed who work closely with ShopClues.com to deliver the cutting-edge solutions and technologies.

"We have a strong technology theme, we are on Lamp architecture, MYSQL, and PHP open source platform; we have the technology stack-there is the infrastructure layer, the middle layer, there is the front end and also the analytics tools and technologies are being used for mapping site performance to user behavior," says Aggarwal.

ShopClues.com has deployed a sizable number of servers to run the technologies-of these to run the business and some as monitoring and back-up servers. ShopClues.com is operated from multiple data centers. It has also developed a number of technologies to monitor and manage these data centers. There is a dedicated infrastructure team that manages day-to-day operations, capacity planning, monitoring, and reporting, says Chatterjee.

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Aggarwal adds, "We use different tools-some are plug-n-play from Google, some are in-built and some based on third party licences, testing tools, server performance tools, etc are also used. We have a big IT infrastructure in the data centers; we have deployed VMWare cloud infra. NetMagic is the solutions provider for this and sometimes Legspace in Hong Kong."

The peak time performance can be likened to the restaurant business. Aggarwal adds, "At peak we have about 5,000 concurrent users and for this we need huge server capacities-and even if it is needed for 1 hour you cannot say no to it at other times-once you have built in a 5-lane highway ie, even when you create a capacity, you have to pay for it, and you have to pay for the peak consumption and not average consumption."

 

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Active Social Media Usage

ShopClues.com claims to be the first e-commerce website which was first launched on social media, says Chatterjee. Social media and mobility is core to what it does. On the mobility side, it will soon be launching a mobile app and a lot of its investments are being planned on the mobile and tablet side.

"Right now, roughly under 10% of our users are coming from the mobile side and they account for about 5% of our total business. Within our growth, they are larger than the business coming from PC based internet users. So in our case we will be focusing on mobile apps, one buyer, and one seller android based smartphone apps to empower them," reiterates Aggarwal.

Scaling Up

ShopClues has been scaling a lot and going forward, it will be making a lot of technology investments in IT infra, physical servers, in storage, telephony analytics, billing and payments-a sizable budget would be used. "I would say in 2013, we would be spending close to about one-and-half a million dollars ie, `7-8 crore on various types of technologies-I would say in all 3 buckets, hardware, software and telephony, and services," Aggarwal informs Dataquest.

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