On the Flipkart Web site, a search for Converse canvas shoes is aided by a drop-down where several related options appear. While Fipkart has an in-house team that works on these user-engaging technologies, not all e-commerce companies can afford to, as there is a tech cost in addition to manpower cost. This is the opportunity that Antony Kattukaran, along with Palaniappan Chellapan saw in May 2014 when the Indian e-commerce segment was seeing crores worth of sales. “Our technology helps on-site searches; a company can streamline it better instead of throwing up results randomly and without context,” says Kattukaran, who has a Masters in Industrial Engineering from the University of Wisconsin and worked as a Consultant with Deloitte in the US before moving to India to start this venture. Palaniappan Chellappan, on the other hand, started his entrepreneurial journey right after his undergraduation, with a web development company.Thus Tagalys started from Besant Nagar, a placid beach-fronting locality of Chennai. The world of e-commerce, however, is hardly this laidback. As the sector grows at breakneck speed, with homegrown companies like Flipkart and Snapdeal attracting multi-billion dollar valuations, opportunities are opening up for companies who can provide ancillary services – both technology and non-technology.
At its heart, Tagalys has a simple objective — to keep visitors engaged online. But this is not as simple as it seems. Companies such as, Amazon, Facebook and Google are all putting in billions of dollars to get their act right. “A good search is at least 30 per cent of the battle won as there is a huge likelihood that the customer may buy,” opines Kattukaran. What happens when a customer does not buy? Kattukaran says that in that case, the e-commerce company gets an insight into what he is searching for, which can help adjust marketing strategies.
Reliable search
Some industry studies point out that 25 per cent of visitors buy a product if the search experience is reliable.
Globally, search is a multi-billion dollar business. In India it is around $4 billion but this number is rising. There are three pillars of growth for Tagalys, which set it apart from others; “it is all about increasing revenues, reducing bounce rates and improving discovery of products. Reducing bounce rates involves giving a search result in less than 30 seconds, which ensures that the company does not leave the Web site,” says Kattukaran.
Industry watchers point out that some of these processes are done manually and the scope for automation is huge with increased users. “We do not do any manual tagging; new products, stock levels and updated prices are automatically updated and there is no need to change anything on your backend IT system,” says Kattukaran. Is there a pull for companies to outsource the services rather than build on their own? Kattukaran is confident that it is the way forward but admits that Indian start-ups are always looking to build it on their own and cites the example of a prospective e-commerce company which spent two plus months building itssearch. “In that timespan we could have improved their searches by at least 30 per cent and if it did not, we would not have charged anyway,” he says. That is Tagalys’ business model. It is an interesting model as it does not require a volume of customers. In the existing engagement, if the searches improve the web traffic constantly, the company gets paid.
Funding
The company is not looking for funding as it needs to get customer traction and reach a certain size before looking for funds. Already, it is a part of US-based technology firm, Pitney Bowes’ Accelerator Programme in India. Pitney Bowes is also an incubator partner in Nasscom’s 10,000 start-ups initiative. Tagalys hopes to bring in more revenue from such networks. When asked, Kattukaran says that as it is a privately-held company, he is not in a position to reveal revenues. The company currently has only four employees. “Getting the right people is a challenge and we do not want someone who joins our company and leaves quickly as it would affect our product roadmap,” he says. Tagalys is working on Natural Language Processing (NLP) technologies, which would go into its solutions in the future. The company also believes that it sees a huge opportunity in brick- and-mortar stores going online. “They know retail, but now have started realising that with the help of technology they can increase their sales,” he says. The start-up faces a huge challenge in terms of investments into technology, which is changing a break neck speed. And whether or not it keeps ahead of the curve, time will tell.