SANJAY SETHI, co-founder and chief executive at ShopClues, the Gurugram-based online marketplace, says he knows where he wants to take his company. In his words, he is ready to either drive it there himself or hitch a ride. Telling Karan Choudhury that even if investors such as Tiger Global lose interest, he would do what is needed for his company, including merging it with another marketplace or go for an Initial Public Offer (IPO) of equity. Edited excerpts:
Tiger Global is showing no appetite for India and might not invest more here. So, what happens to Shopclues?
Our war cry is to take the company to an IPO and make it profitable. When one is sovereign or in this case listed, then they do not have to depend on anyone for money. At least at the stage we are in, it is not about valuation any more, it is about terms. It is a world different from who raised money at what value. It was interesting earlier, not any more.
I am emphasising on terms, as that is how alliances happen or do not happen. It does not matter whether Tiger has interest in India or not. We are not Tiger and they are not us. Again, it does not matter whether SoftBank has interest or not. They can bet on the first horse or the second horse; we are not at all concerned. We will not depend on external capital; if we have to raise money, we will raise it from the public market.
Is it because money is not coming from any of these investors?
It is not about money coming in; that would come anyway. We have raised till date $190 million (Rs 1,200 crore). Money is not my biggest concern right now. By 2018, we would be heading for an IPO. By the second or third quarter (this year), we would be already profitable.
Are you planning to get into an alliance with a bigger player? Are you ready to merge Shopclues with any other marketplace?
If we look for any kind of financial or strategic help, we will only keep one thing in mind, which is whether it helps us reach our destination faster. I am open to everybody. Why would I not be? The central point is that we should be able to capture the biggest market and the most profitable market of 400 million people who are still on the sidelines of the digital revolution. We are always talking to everyone; it would be unintelligent of me not to.
You seem open to mergers on the one side but are also talking about heading for an IPO. What exactly is the plan?
Companies cannot have egos. We have to get to a certain destination; the question is how we go. We can either drive ourselves or hitch a ride. I always look for that answer; for the past four-five years, I have been meeting everyone.
The rebooted Snapdeal is now playing in your domain. Is it going to create fresh competition for you?
If they execute well, have money, organisation and the consumer brand, they would of course be able to take us on but I do not believe they have any of these things.
Have you changed your USP, as the bigger players such Flipkart and Amazon in your backyard?
Every company has an up-selling point. Amazon’s, let’s say, is convenience. Which includes good logistics, a wide range of products and they also give content. For all this, they target a consumer segment -- at least 80 percent of the business they do cater to is that kind of demographic which needs all those things. With some differences, the same goes for Flipkart. If 90 per cent of shipments are going into pincodes where the average (yearly) income is Rs 4 lakh, the price point, as well as the products they would require, would be completely different.
On Amazon, to buy churan (traditional digestive), one has to search for it, as 80 per cent of the sales happen on merchandised curated products. On Shopclues, you have to search for an iPhone but not a low-end phone as it's all on the home screen; 80 per cent of the business comes from there and we make money on it, as margins are high. This is and has always been our USP, and this would not change. This is how and why our target market, the tier-III and tier-IV segment, sticks to us.
Why suddenly pitch yourself as a fashion destination? Is it a pivot that happened to bring in investors?
It was not for the investors that we did that. Almost 50 per cent of the Rs 2 lakh-plus category mix is fashion and the rest is made of wired or electronic products; home kitchens, among other things. Fashion has for now become larger than wired.
Is there another round of funding happening anytime soon?
From now till we launch our IPO, we might raise a small sum. It would be only to maximise the value of the company before listing it. It depends; we might not even have to do it.