Online retail is not dead

By Ankush Chibber

In early 2009, a major event passed without a whimper when Hypercity-Argos, an operation between Shoppers Stop and Argos, shut shop for good. It had decided to discontinue its online catalogue operations. In short, India's largest online retailer, backed by its biggest retail group, came up a cropper against India's fickle consumer base.

So what does that tell you about retail businesses in India? Well, for one, it is quite tough to crack the Indian market. And two, its even tougher if you are running an online business.

Still, over the last few years, there are many multi-brand online retailers that have entered the market with moderate achievements in terms of traffic as well as orders. These would include eBay, HomeShop18, Rediff Shopping, Indiatimes Shopping, Future Bazaaar, and our hot startup this month, FlipKart.

As you would have probably noticed, save the last one, all others aforementioned are backed by major business houses. Suffice to say that this means that a new entrant in the sector has higher entry barriers, at least in terms of competition, size, logistics and inventory, and any market penetration would have a high turnabout time. Playing with the big boys on their turf is a recipe for disaster.

But then, why not create your own niche turf, like Mumbai resident and former filmmaker Derek Affonso has with his startup Smart Art? This is an online store that sells the likes of cult movie posters, pop culture prints and reprints of high-end art pieces.

Create your own turf

Online businesses have an advantage over businesses in the real world-they all have the same 13 inch monitors as our windows to the customer. It is a level playing field; one where an entrepreneur can keep some turf for him.
Affonso is one such entrepreneur. Back in 2008, he and his wife were looking for some prints to do up their daughter's room. After a bout of constant searching, Affonso realized that there was really no one-stop shop for buying such pieces. And like every entrepreneurial story, the lacunae gave birth to an idea.

"The idea was to create an online store where one could shop for popular posters, art and the likes without having to visit a hundred real world stores," he tells us. "It was also important that the pieces offered were of high quality, given that the target audience for such products would be the upper middle class and above."

Today, smartart.in stocks over 15,000 pieces of movie posters, sports memorabilia prints, reprints of major art works and other major pop culture pieces. The prices for these pieces range from Rs.600 to around Rs.50,000, depending on the quality of paper, size, and cultural value, of course.

The most important thing to note here is that Affonso's company is the only one doing this in India. Outside of India, there are the 'All Posters' and other companies, but they do not cater to the Indian market. If you want a Monet for your living room or a classic Andy Warhol print for the study, you can only go to Smart Art for it.

Affonso tells us that the exhaustive inventory covering everything from movies to sports to abstracts to photography allows him to offer people the ability to do up entire spaces and not just walls. "So, a customer coming to the online store can, at one go, choose prints for the living room, the bedrooms, the study and the kids room."

Though he does not speak numbers to us, Affonso tells us that the biggest indicator of his success is that a good chunk of his business come from tier II and tier III towns. "Only an online store could have allowed a niche offering like mine to reach these places," he says. "Now someone in Jamnagar can get a Gustav Klimt print sitting at home and not by scouting at a hundred stores in the metros."

Affonso also tells us that he has not spent anything on advertising beyond a little on Facebook and the launch releases. Most of his marketing is via word-of-mouth, he tells us. Much like Pearl Uppal's fashionandyou.com, an online invitation-only sales portal that does flash sales of high-end brands like Gucci, Prada and the like.