Riding high on Virtual retailing: HomeShop18's Sundeep Malhotra

Digital explosion has enabled us to make a lot of unimaginable things possible. Shopping online is a luxury that now we can access easily enough thanks to the various online shopping portals. Homeshop18 is the country's first 24 hour home shopping channel. Television may be a very dominant medium; however the internet is only going to integrate with it. Sundeep Malhotra, CEO of Homeshop 18, someone who made virtual shopping real, explores this market extensively in an exclusive interview with Adgully.

Adgully: Could you share with us a bit about your early years?

Sundeep Malhotra: Home Shopping is a new concept in India. All that existed was teleshopping selling dubious products in the form of dubbed infomercials bought under various channels. Network18 with a strong base in news, general entertainment and films, took a bold decision of getting into home shopping space. Conceptualized in 2006, the channel got formally launched in 2008. HomeShop18 started with delivering flowers and gifts through a toll free number and a 15 second commercial which played in all Network18 channels. A call centre was taken on rent to handle calls which came from various parts of the county. The very first day we received 250 calls which in just a week's time reached to a heartening number of almost 500 calls a day.

The response was very promising, we realized the need to create our own infrastructure and build a team which could do things the right way. We thus setup our own call centre in Noida which today is of a 500 plus strength handling a traffic up to 40, 000 calls a day.

Today, HomeShop18 alone accounts for 4.5 percent of all digital cameras sold in the country. We are the largest retailer for Reebok in India. Reputed brands such as Whirlpool have come out with an exclusive range of products especially for us.

Ag: What are the key highlights of your association with HomeShop18?

SM: I have been associated with HomeShop18 since its inception in 2006. Back then virtual retail and the home shopping concepts were mere ideas. Our challenge was to really build the idea from scratch. So the first steps were to put together a nucleus team which would help us achieve what we set out for and build a platform which stood for credibility and performance keeping the customer in the very centre of our thought process.

Home shopping back then was an idea which was received with skepticism and mistrust. Our first challenge was to build a business model, which would bring back the trust in customers. With the help of my strong team, we have today been able to achieve it by building a credible platform as it is today. A platform catering to customers from over 3000 cities, a trusts of over 2 million customers and a relationship which gets added every 6 seconds.

Ag: What are the challenges that you have faced in this space?

SM: Our real challenge was to burst the common myths associated with the TV shopping experience, change the legacy of home shopping by lending credibility and status to the domain. Since this was a new business model for India, the consumer knowledge did not exist.

We had to build everything from scratch. In the beginning, there weren't too many people who believed this was possible. Not too many brands wanted to sell through us.

Logistics was another challenge, so we went out and partnered with some of the best in the business that has really helped us establish the wide footprint that we have today.

Today, brands believe in the platform and see it as a perfect retail module given the robust distribution which helps them sell their products to even the remotest of towns. Today we sell more than 480 brands and 25,000 SKUs. We sell almost everything, from electronics, kitchenware, home appliances, cakes, books, music, movies, gifts and flowers, healthcare products, beauty products to even insurance policies and now the hot selling Jewelry range through our 24 hr home shopping channel or our e-commerce portal www.homeshop18.com.

Ag: Can you give us a little background about HomeShop18? How is it different from Tele-shopping?

SM: Our business model itself is different from other channels. India has only witnessed Tele Shopping till date. Sauna Belts, Foreign Anchors with Hindi dubbed sales pitches, infomercials bought on various channels and one product being sold repeatedly again and again on multiple channels. All of this has created a different image of shopping from TV. Tele shopping is dependent on few products primarily related to health and wellness with huge margins where they can make a sale to an un-suspecting consumer. These products are essentially hard to relate to for the regular consumer.

In comparison, all our products are very relatable and particularly suited to the needs of the modern consumer. We sell genuine products and established brands across categories like electronics, home appliances, jewellery, mobiles, Cameras and Camcorders etc. We own the entire chain from bringing in quality products and established brands to production of the content on the channel, taking up customer orders and queries and managing logistics. Also, our products are presented by experienced anchors and product experts provide detailed and extensive information on the usability and features of the product.

This is the time for innovative virtual retail. Our "direct to customer" model has been doing phenomenally well in these times as we have been able to deliver value to them. We have been able to pass the benefit of no middlemen, directly to our customers.

Ag: Please share with us some of the brands that HomeShop18 had partnered with? What is the reach like?

SM: As I said earlier, brands have started gaining confidence in the virtual format of retailing.

Today we sell more than 480 brands and 25,000 SKUs reaching more than 3000 Cities in India. We sell almost everything, from electronics, kitchenware, home appliances, jewellery, cakes, books, music, movies, gifts and flowers to even insurance policies.

Established brands like HCL, Cannon, Samsung, Whirlpool, IFB, Reebok, Lee, Sia, Olympus, Peter England, Fab India, Biba, and Benetton see us as an Alternate Distribution Platform.

Ag: What is the one line of thought that is followed at HomeShop18?

SM: At HomeShop18, our philosophy is to build credibility and offer great value, quality products backed with excellent after sales support to gain consumer trust and confidence to build India's honest alternate distribution platform.

Ag: What are the strategies charted out for growth in the next fiscal year?

SM: At HomeShop18, we are very optimistic about the near future. We are looking to launch new value-driven shows and are looking to bring in a variety of products and brands. We are looking to increase our reach and logistics footprint. We are building our loyalty program and a host of customer oriented programs and initiatives. There is great opportunity, the need is to be innovative, customer oriented and value driven to see unparalleled growth.

Ag: What are the various marketing strategies?

SM: We are a Direct-to-Home business. As we cut down the chain and eliminate a lot of levels through which a product finally reaches the customer, we are able to transfer that price benefit to our customers. We firmly believe in more for Consumer strategy whereby we offer value deals to our customers maximizing the cost benefit. Discount range and offers vary as they depend on different categories and products.

We also offer the widest range of payment options to help customers enjoy the unparalleled convenience of home shopping: credit/debit cards, Cheque and DD payment, Internet Banking, and even Cash before Delivery. We ensure 3rd party verified secure payment on our website www.homeshop18.com for the safety of our customers.

At HomeShop18 we follow a policy of Reverse Logistics, In case the customer decides to return the product within the stipulated time, the product is picked up from the customer's doorsteps and no extra effort or cost is incurred by the customer to return the product.

Ag: What are the new initiatives undertaken?

SM: At HomeShop18 we have always kept customer's satisfaction as our priority. We have explored new categories like Insurance and Lingerie and brands like TATA AIG and Enamor have come to partner with us. We keep launching various promotions around seasons and festivals. We ended our Diwali promotion in November and at this time of the year, our Year End Maha Sale is on, bringing customers assured gifts, Buy1 Get1 free and Flat 50% off on their purchases. Besides this, we are also in the process of launching various loyalty programs for our customers. Our repeat customers will be highly benefited by these programs.

Ag: What is the size of the market?

SM: The home shopping industry has just started to take shape. It has already started making a positive impact on the growth of Indian retail sector. As per a report by global management consultancy firm, McKinsey & Co., the total retail industry in India will become a $ 450 billion business by 2015. Of this 14-18 per cent will be organised retail. Currently, organised retail forms just five per cent of the total retail in India. Furthermore, the report says that e-commerce, catalogue and home shopping put together are expected to become a $ 10 billion industry by 2012.

The coming decade is going to be a period of tremendous growth in consumer appetite, on the one hand, and capital investment to establish brands and businesses deeply, on the other.

India is trying out new things and we are in a fast growth mode with a young population, which adapts very early to technologies. We have received a tremendous response from customers, which can easily be seen from the fact that we at HomeShop18 add a new customer every six seconds.

Ag: Could you share with us the opportunities in this space?

SM: Opportunities exist in every share of consumers' wallet. For Example, We launched services like insurance, tomorrow it could be property or travel. The opportunity areas are numerous in this space and the scale at which it is growing is also helping this industry to boom.

Ag: What are the products available at HomeShop18?

SM: With more than 20 product categories and 68+ sub categories, we sell almost everything from home appliances to jewellery, apparels, home furnishings, kitchenware, mobiles, cameras, toys just to mention a few. We sell more than 480 brands and 25,000 SKUs reaching more than 3000 Cities in India. At HomeShop18 we have special products for special events like Christmas, Diwali etc. Keeping customer's need and innovation as the core HomeShop18 has come with innovative range of products like Happy Call non stick cookware, services like Insurance and products exclusively developed by various brands like Whirlpool for HomeShop18 customers'. | By Janees Antoo [janees(at)adgully.com]