21 Jun 2017, 10:32 — 6 min read
Startups have been all the rage since the past few years. They have especially come to the forefront after the Indian government announced its ambitious Startup India programme. Despite the recent hype around them, startups are not a recent phenomenon. In fact, I started my career in a start-up environment, way back in 1975.
My first job was in India’s first IT Company DCM Data. Within six months of my joining, 46 colleagues resigned at once to start another IT company — HCL. In my view, that was India’s first tech startup in the true sense. It was a shock for rest of us in the company: How could people just leave their stable jobs with a leading company to start something of their own? But the daring group had made it. HCL’s success in the late 1980s inspired a string of IT ventures across the country, turning India into a global IT superpower.
There was almost an avalanche of tech startups during the dot com era. In reality, most of them were retailers of sorts offering some service or category of merchandise. This was the true beginning of retail startups backed by technology.
Rise of online ventures
Following the success of IRCTC online ticketing, a range of retail tech start-ups emerged to offer travel and hospitality services. Over the past few decades, retail start-ups like MakeMyTrip, Red Bus and BookMyShow have established a new model of retailing travel and ticket booking services. The key reason for their success was that they were able to transform physical ticket delivery to e-ticket delivery and that helped them deliver a more efficient experience to consumers.
Post the 2008 downturn, new generation of dot com ventures came up that were ready to service merchandise retailing. Though most of them started with the inventory model, they soon switched over to a marketplace model. Many were in the realm of retail and all were addressing a hitherto untouched consumer problem in a unique way. Emergence of online stores like Shop Clues, Amazon and Flipkart offered accessibility to a very wide range of merchandise at a click of a button.
Around 2013-14, when modern retail brands were exploring emerging markets of Tier-II & Tier-III towns across India, e-tailing start-ups were able to leverage technology to tap those markets without opening physical stores there. This created new market opportunities for all retailers and this is where traditional and modern retailers started toying with the idea of adding online channel to their existing businesses.
Now, the challenge in front of all traditional retailers was weather to invest in e-commerce technologies or open new stores in new markets. Major online players like Amazon and Flipkart were making huge investments in building real time shopping experiences for their customers, which started building consumer confidence in on-line shopping without physically checking it. This new trend in the consumer behaviour started driving retail brands online. Most of them started working on deploying their own technology stacks to deliver online and digital experiences to their existing customer base as well as explore new markets whereas a few chose to start shopping around to acquire suitable start-ups aligning with their products category or business models. For instance, Future Group acquired Fabfurnish, Wings Travel acquired BookMyCab and Titan acquired Caratlane. These acquisitions gave them immediate access to new markets, customers and required technology framework. The trend is certainly encouraging entrepreneurs to keep innovating with the hope that their ideas will find value with established brands and bring them into the main stream.
While creating new products and services, retail start-ups also created new trends in marketing and customer engagement by leveraging social platforms. This made traditional retailers realise the value of the mountains of customer data that had been available with them for decades. This realisation is now leading to an emergence of new marketing models in retail for building personalised engagement.
Startups in the retail space will continue to drive innovation in shopping experiences using new technologies such as Artificial Intelligence, Virtual Reality and Augmented Reality. In fact, the innovations are already proving to be valuable for specialised categories like fashion, jewellery and personal care among others.
Today, consumers are open to trying new things and technology is taking new leaps. A time when entrepreneurs are feeling encouraged to embark on the journey to realising their dreams and experiment with ideas. From the multitudes who come forward, only a few will succeed. But they will all end up adding value to retail through their new perspectives.
Ajay Aggarwal is a seasoned retail professional with over 25 years of retail experience behind him. He has also been a serial entrepreneur having founded several ventures in the retail space including Seacom and KLISMA, which got acquired. He has spent a few years as a domain & strategy adviser to leading IT enterprises like SAS, Zensar, Nimbus, Patni, L&T Infotech, Uniken, DG2L Technology to support their retail and e-commerce practices. He is now associated with few start-ups in the retail and e-commerce space, helping them scale up and innovation to create new opportunities for them. He is an important and active member of RAI’s Technology Committee.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.