Notice a sudden rise in the number of e-commerce sites in India? Not very long ago, it was just Snapdeal and Flipkart. Now, there are more than 100 sites all fighting for some eyeball. In this clutter, there is one site that stands apart with a unique brand model. Meet ZAPstore. They found a different audience to associate themselves with and are rapidly growing. All this before any fund-raising. Here’s an interview with their co-founder & COO Gokulraj Gk.
The e-commerce industry has really taken a giant leap in a very short time. Companies are taking notice of this. E-bay has increased its investment after 7 years now. Where do you think this is headed?
eCommerce in India is still at a very nascent stage compared other mature markets in West. With just 10% internet Penetration, we still have a huge market to be tapped. That’s why there is a surge of eCommerce websites serving every other stuff online. Most of these sites have the same business model as Amazon (Flipkart.com). The race finally comes to the amount of money they spend on marketing. That’s how they acquire consumers. I think, the industry has begun to consolidate with the mergers and acquisitions.
So how do you separate the eCommerce market? Are there different types of business model?
Simply put, there are two types – one that follows the Amazon model where products are sold online. This would be a regular eCommerce site. In India Flipkart, Infibeam, Jabong follow this model. And then there is group buying. Groupon were pioneers of this concept. Snapdeal, Crazeal, Fashion & You follow the group buying model which enables discounts.
So does this mean that the market is maturing really fast?
Yes, the market is growing rapidly. But, group buying is not working very well in India. The customers are always in a dilemma if there is any delay in receiving the product after paying for it. There is a sense of unwillingness to pay online. And, the after sale service is a big problem. They tend to take it for granted since the customers have paid.
From the retailers’ point of view, the reason to offer anything at a reduced rate is to promote sampling and trial. But most of the customers don’t return. This becomes a vicious cycle.
So, this is a set of deal hungry customers who opt for all offers and refuse to stay loyal. Your partner and you met at Texas. So why decide to come back to India where the market is still adjusting to eCommerce as a concept?
All because of the massive opportunity present here. Sure, it would have been easier to communicate the concept, but we have an option here to be part of a revolution and that is an adrenalin rush.
The eCommerce industry is growing at 40% year over year and the internet penetration is increasing too. With the advent of Mobile internet, people have started using mobile phones to access their day to day stuff. That is big opportunity too.
So, tell us about ZAPstore. What is it all about?
ZAPstore is an eCommerce site that currently focuses on tech gadgets like phones, tablets, cameras, etc. It is all about taking eCommerce to an interesting level. Instead of a pure buy-sell model, we wanted to explore an opportunity to bring in a twist to buying. Why not focus on the gaming population. Their innate nature is competitive and we wanted to extend this into eCommerce. So, the idea of ZAPstore is to make buying online more fun and engaging.
How is ZAPstore different from other sites?
At ZAPstore we enable the consumers to buy the product of their choice at the price that they want. We call this process ZAPPING. ZAPstore works like an options market, wherein you pay an advance to get a huge discount on the product.
Every time you click on ‘ZAP it’ under the product of your choice, you will see an exclusive price. But, you will have just 10 seconds to decide to buy. The ‘ZAP Price’ that we show you will always be lower than the mentioned ‘Market Price.’ Every time you click on ‘ZAP it’ the prices go lower. But, you are not the only one ZAPPING on a particular product. Many other people would be zapping on the same product and each one will see different prices ultimately driving the ZAP price lower till someone decides to buy. So, we give every customer an opportunity to buy the product at a discounted price.
For every new registration you get two free ZAPs, i.e. two chances for you to ZAP on a product of your choice. After depleting the ZAPs you have to buy ‘ZAP packs’ from us to reveal the ZAP price. Each ZAP costs Rs.15. We have packs starting from Rs.30 to Rs.15000.
So, with this concept how do you break the roadblocks for traditional eCommerce sites?
We have a robust inbuilt refund system to ensure people don’t lose money, which is the primary concern of eCommerce users. Also we have set other systems in place like free shipping, next day delivery and the option to pay on delivery. We try and make it as easy as possible.
How is this working out for you?
We find this audience very eager to try new stuff and the concept of ZAPstore has been picked up very well. We are making a sizeable number of sale on a daily basis.
With the gaming focus, your target audience is clearly defined. How do you market this?
Most of our promos are at the college level like sponsoring gaming meets and of course a very deep social media presence. We did combine some offline promos at the initial stage but now focus is online.
Gaming as a platform is very different and probably a huge differentiator for you. My sense is that product extension on this platform will be interesting. What are your future plans?
This definitely is a huge differentiator. And yes, we are looking at product extensions on this platform. We are working on something a lot bigger using the same model. I will not be able to reveal the plans now, but it is going to be huge.
That’s it from Gokul. I really appreciate the thought to differentiate from the others and gaming is a great platform. Maybe this will be the next big thing in eCommerce. The ZAPstore was also among the first few to launch the new iPad in India. Zap away and tell us what you think.