Offline retail or online store? To be or not to be online? Most entrepreneurs would have faced this Hamlet-like dilemma at some point in time or the other. And S Shriram was no stranger to this predicament.
About a year-and-a-half ago, he started a store in Besant Nagar, Chennai, called Smiling Baby, which he planned to take online. “But that wasn’t easy. As a retail store, the pedigree might be big, but when you decide to go online as an entrepreneur, you need to put in all your savings and build business,” Shriram explains.
“If I had to go online, I would have to build a back-end facility and logistics. Then spend enormous amounts of money into marketing, for the site to get traffic and higher rates of conversions. I also considered the option of selling via marketplaces like Amazon. But there, competition is very high. In fact, my distributor also sells on the same platform! So they get the arbitrage of my margin as well, which they pass off as discounts,” he says.
The footfalls at his store weren’t very encouraging either — as they are in many other shops. In fact, he says, they are not even able to do last year’s business in the current year. He spoke to his retailer friends and associates and found he was not alone in facing this issue.
“That’s when I knew I had to do something. The main problem with buying products online is that you don’t really know who the seller is. So, there is a huge trust deficit. And this is how oyethere.com came about,” he says proudly.
Currently, oyethere.com has 1,800 products listed on the site and eight to nine partners. “Smiling baby is on board with us as the baby product partner. We have Odyssey for books; Words & Worth for stationery; Patanjali products from Baba Ramdev; Madras Bars from the Idli Factory; and Cookie Man cookies. We’re also probably the only website that sells tender coconut!” he laughs, adding: “Right now, we’re restricting the number of stores we’re picking up from. Eventually, we want to tie up with as many stores as possible.”
Shriram says the site was created to bring offline retailers in a certain locality online, list their products and help them sell more. So how does it work?
“We market the various products on our site to our customers; customers buy from our website; then, we go to the store concerned, pick up the product and deliver it to the customers. All this happens in 30-300 minutes,” he says, stressing on the fact that this model is called “hyper local”.
“In India, 92-93 per cent of the market is unorganised. It has Goliath-like proportions. The big boys think they’re Goliath but they’re not. The small kirana stores are more powerful. You can’t fight them. So, instead, I thought of embracing them. That’s how we set out,” he says.
Earlier this month, BLoC had an article that said a mix of online and offline retail was the best bet for a sustainable business. And that’s what Shriram firmly believes in as well.
“The point is, online gives you quick and high traction. You spend ₹100 on Facebook and your reach increases. But online gives you a hockey stick growth. You end up biting off more than you can chew. We’ve all seen examples of how certain companies let go of people, struggle to sustain and often shut down their operations.
“Offline, on the other hand, is a more sustainable, long-term model. When we launched Smiling Baby, we wanted to launch 50 stores across Tamil Nadu in five years. We had a clear plan of action because we knew it would take that much time. The store has to sustain. Online is come today, gone tomorrow,” the founder says.
Taking it slow
And this is why Shriram is in no rush to expand his reach. Currently, oyethere.com functions in South Chennai, between Triplicane and Thiruvanmiyur.
“After south, I will target central Chennai, north west Chennai and finally OMR,” he says. He feels this is like swimming against the tide because, “Today, everything happens on OMR — be it a new café, restaurant or a shop, everyone wants to open on OMR. But the market is so huge! It’s a 25-km long stretch. And lakhs of people with an Internet connection live here. So you need to crack it correctly. That’s why I will work on it after I get it right everywhere else.”
For the site as a whole, he says, “Call me audacious, but I plan to open oyethere.com in 500 cities in the next five years. And then go global.”
As for the funding, he currently has three investors. “I plan to raise further funding and am in talks with several angel communities.”
Advice for young entrepreneurs
Considering he has been teaching for almost a decade at various B-schools and IIT Madras, what would he advise youngsters before they turn entrepreneurs? “Be reasonable and understand the commitment. But, before anything else, ask yourself why you want to be an entrepreneur. Just wanting to make it big will not cut it; neither will wanting to make money. Both can be done even without becoming entrepreneurs.
“When you do decide to take the plunge, make sure you do your homework well. Have backup plans. Have a Plan A, Plan B — you have 26 alphabets! And if you fail at your first venture, don’t get bogged down. In fact, that’s very good, because the failure would teach you a lot more than success would have.
“Remember, never ever become an entrepreneur just because you didn’t get a job; or because you didn’t like your job. That’s the stupidest thing to do. Become an entrepreneur to create value,” he concludes.