Rocket Internet - an apt name for the company by the Samwer brothers. They like to move at amazingly fast speeds - and with a no nonsense attitude, no fretting over irrelevant details, moving with a package as light as possible, and sell the subsidiary firms at a a significantly steep valuation. Often attacked by entrepreneurs for being a clone factory (Rocket is known to replicate proven successful models in developing economies in emerging markets, and get a good market share with an aggressive roadmap and huge marketing spends) - I somehow fail to see what's wrong with the attitude Oliver and his two brothers have followed. If you come to scrutinize companies under a microscope, you'll find very few who have tried to innovate. Let's take example of a few:

1. Cleartrip, Yatra, Goibibo - Got onto the OTA party after seeing the kind of traction MakeMyTrip had been generating. MakeMyTrip itself was not the pioneer in this space, for there were a number of OTAs already existing globally.
    
2. Snapdeal - Jasper, the parent company, was selling physical coupons of outlets and retailers to companies and firms for a long time before they witnessed the spotlight Groupon had been enjoying, and after that it was all a matter of launching a web-system that could use their network of retailers. After that, the daily deals frenzy simply went beserk in India. At one time, I remember having counted some 33 portals offering "the best deals" to consumers (Someone give them a dictionary. They seem to completely miss out on what "best" means.)
    
3. Flipkart - Even Techcrunch calls it the Amazon of India. :-) The Flipkart boys were Amazon employees, so they obviously understood the potential of the market more than others (at a time when India on a large scale was still unaware of what e-commerce is)

I can go on and on, taking one company at a time, but I believe you get the idea by now. So, every single one of the companies you see around yourself seems to be a clone of some format or the other. So why is it that Oliver Samwer is facing the heat (and on some level the hatred as well) so much. Well there are few reasons behind that as well.

• Jabong, the prime focus of Rocket in the Indian ecosystem these days, has been spending cash like nothing you have ever seen on advertising. Advertising is the same as real estate, or any other economic scenario for that matter. The higher the demand, the more expensive will it become - since the supply of course is limited. So, advertising in front of the Indian consumers is getting more expensive and then some more. (Rocket is running three companies in India right now - Jabong in Fashion and Lifestyle, Heaven in Online Home Decor Shop, and FabFurnish - the Furniture shopping mart)
   
• The VCs pumped in a significant amount of money in e-commerce space in the past fifteen months - every other e-commerce company was getting a fat cheque. And then the cash reserves started getting depleted. The e-commerce players had somehow gotten under the impression that the money will keep on coming from the VCs and the burn out rate is not going to be a problem. People learnt otherwise the hard way - Taggle and VogueMagnet had to shut shop when they finally realized this was not a viable model, and LetsBuy - Oh, did they learn their lesson the hard way (and had to allow being acquired at a fairly embarrassing valuation). This is a problem Jabong does not face. It is not financed by Rocket, it is owned by Rocket; so there is no nonsense to deal with. Rocket has a roadmap, and they know how much are they willing to spend to get there. Sure, they can also shut shop if things don't go well; but then even that number is something their management has always had at the back of their head. So, the plan they have chalked out - it's pretty much outlined right from Day 1.
   
• Companies started by Rocket do not have to constantly run around to cater to any issues the VC may raise, or an alternate path they were to suggest. Or lets say being asked for a roadmap - any roadmap. Anything the VC asks for, becomes a priority. Is it possible that subsidiaries of Rocket do not have to deal with all this? Nope, they also have to present all this data to the big daddies sitting in Germany; but this is known to them from the very beginning. They know what will be the growth charts that would be expected of them, what is it that they need to present, and when is it expected. So, there are no unfair surprises. The company's "founding members" can focus on running the company, and not running around like a dog with their tails between their legs.
   
• Oliver and his brothers have been successful in closing some pretty sweet deals in the past, and they are aware of the potential Indian e-commerce space has to offer as well. My guess is - this is a pie they would not give up on for anything. And sure, they have the money!
   
• India is cheap - Money makes money, everyone knows that. So in order to sell a company at the tune of $300-million, you sure can expect to dole out a substantial sum as well. They have done it in past, so they are obviously comfortable with it. But when it has come to India, advertising just got a whole lot cheaper as compared to doing the same in US or Europe. So they can comfortably shell out some money, and get may be more visibility as compared to what they would have received in Europe.
   
• THE HOLY GRAIL OF ALL REASONS - All right, so this all states how Rocket Internet has been skewing the dynamics of the Indian e-commerce space. Disturbing, isn't it? But somehow we still are not very sure of how this is impacting the other players to such an extent that they simply hate the guts of the Samwer brothers. Its simple mate, there is one possible exit option that small startups keep at the back of their head - being acquired by a bigger player. But Rocket is someone who flashes this banner on Day 0 of setting up shop - We will sell our business once we have gained a sizeable market share. Oooh, competition! And take Amazon or eBay (the only two players big enough to buy out the India operations of Rocket; and with Amazon planning to enter Indian market in second half of 2012 - I would not ignore the possibility of such an occurence) - if they acquire the Indian subsidiary of Rocket - Jabong, that's just killing the dream of some other startup who would have been working hard for this one day of glory.

An interesting turn of events in the Indian e-commerce space. I am still not very sure if Amazon would want to buy out Jabong or not, but they seem to be one of the few players who can afford to do so; and Rocket certainly does not intend to keep the shop running under its umbrella without an expiration date - its just too boring for the Samwer brothers. Let us see how things finally pan out.

[P.S. Although highly unlikely, but I would not be very surprised if Google decides to take up Jabong - given they are able to generate a significant market share in India. Granted, Google is not in the space... till now! But at the same time, they are not much far away from it either.]

This is EXCITING!

Indian consumers just love discounts. We have witnessed this over and over again. Be it the strategy adopted by apparel brands like Koutons and Cotton County, wherein a packed store had once become a common sight for them, or your local electronics dealer shedding off a few extra bucks on the next mobile handset or air-conditioner you were looking for.

Read the rest of this post »

It surprises me when I see numerous people asking the question of why Google not just bought out Dropbox instead of building up a new product completely – the Google drive.

Why the hell would have Google bought Dropbox? There could have been just four reasons that would have prompted Google to buy out Dropbox:

1. An extremely high entry barrier into the business – Had the business been of a nature that would make it extremely difficult for any competitor to enter the market, it would have made sense for the search giant to buy them off. But that wasn’t the case in this scenario.

Read the rest of this post »

Spring-Summer 2011 was the collection-range from the Indian startup industry that can be termed as the era of daily-deals sites. If I have seen anything growing in numbers faster than the units that belonged to this category that would be…errm, well nothing. There were an odd thirty daily deals site operating in the Indian ecosystem at one time – 30, the number speaks for itself. Jasper was overwhelmed by the success chart Groupon was plotting for itself in the US, and Snapdeal was born; and it was a hit! That did it for everyone else; everyone wanted to make their own copy of Snapdeal, who had already copied Groupon. Timesdeal, sosasta, mydala, dealivore etc. etc. – the names are far too many to recollect. And now they are gone; most of them.

Read the rest of this post »

Mobile, mobile, mobile – that’s all you get to hear about all around these days. If you are getting sick of it, then I don’t know what to tell you other than “If it bothers you so much, just look the other way”. Mobile-tech is here to stay, and it’s here to kick all other forms of content discovery, requests and delivery really hard in the nuts. The day I wrote about Zynga buying OMGPOP for their single game – Draw Something – I received a comment from a friend on Facebook in less than 10 minutes suggesting to go ahead and make a mobile app myself, since it is the ‘in-thing’ these days.

Read the rest of this post »

The social gaming industry has been moving at a speed faster than that of the best car money can possibly buy you. New social games are seeing a growth in subscriptions like never before on any platform, and the number of apps going live on various smartphone marketplaces on a daily basis is simply overwhelming. And most of these apps are games. So how do you reckon the social gaming market is going to shape up in the next 20 months?

Read the rest of this post »

Zynga’s recent acquisition of Draw Something drawing game’s creator OMGPOP, for $180-million in cash and $30-million in employee retention is by far the most expensive acquisition Zynga has made so far. While it may appear that the purchase is driven solely by the number of users Draw Something has been able to acquire in a very short span of time, there is more to it than meets the eye. The important thing to note here is that Zynga has the infrastructural capability to replicate the same product (it does have few similar products already); and allocate enough marketing expenses to acquire users.

Read the rest of this post »

Mouse eRetail Pvt Ltd, yet another e-commerce startup based out of Bangalore, had launched a horizontal e-commerce service - Mouse-e.com - five months back; and has just announced that it has just been successful in raising an angel investment to the tune of Rs.1-crore from an anonymous private investor (or may be multiple investors). And if that wasn't enough, as per the company sources (and as reported by Business Standard), it is currently in talks with a couple of Venture Capitalists to bag an investment worth up to $5-million by June this year; the funds will be used first to expand across the country and aggressively cover the top 130 cities, followed by a penetration in the tier-II and tier-III cities segment.

Read the rest of this post »

Karnal, Haryana based Liberty Group, which started catering to the domestic Indian market in the early 80s, has just launched an web-store - Liberty Shoes Online, offering a wide range of its footwear and accessories for men, women and kids. (Although you will find products segregated on the basis of categories as well - school, sports, formal-wear etc.  - that is something which has been put as a sub-text and not highlighted at all. The only three segments a users gets to see once he/she first visits the site are - Men, Women and Kids. More on this later.)

 

Liberty is not a brand coming onto the e-commerce wagon too slow, too late; it already has quite an extensive online presence via traditional e-commerce sites in footwear category (BeStylish.com) or traditional wide-ranged shopping category (Myntra.com). Through this new sales channel introduced, the company targets to ship an average of 50 orders on a daily basis in the initial months, and hopes to grow at a rate of 100% year-on-year for the first three years. As per company reports, the site seems to have received a good traction from consumers since its soft launch in 2011.

Read the rest of this post »

Last week, I was sitting down with a friend who recently launched his web startup. And he was on the phone with some social-media marketing agency, and the only question I heard him ask was - what are the kind of impressions your posts get, and what is the percentage feedback? In other words - ROI.

Read the rest of this post »