Fabmall shows there is life after death for dotcoms

Fabmall.com, the Bangalore-based internet commerce portal, plans to end this fiscal with total sales of Rs 12 crore. The company plans to increase this to Rs 20 crore during the next fiscal and believes it will grow by at least 50 per cent the year after.

"We are an oxymoron. We make money on the internet and by that simple fact, we have proved many a person who believed that the internet and e-commerce was not viable, totally false," says K Vaitheeswaran, COO, Fabmall.com.

Started in 1999, Fabmall.com is a focussed shopping portal that works on a B2C model. Though the company faced sluggish momentum in its initial period, the last few years have been one of growth.

The company turned profitable last year. Though the margins are small (around 6 per cent) at the moment, Vaitheeswaran believes this can only go higher.

"The growth in our business in the recent past has been driven by two important factors. One is the push that large banks have given customers to drive them online. The other is the move of the Railways to take ticket booking to the internet. Both these have played a major role in not only making consumers more comfortable with the net but also increasing their confidence on the safety of the online medium," says Vaitheeswaran.

The growth strategy for the company is multi-pronged. Apart from revenues from direct online shoppers, the company has tied up with corporates for their loyalty programmes, where dealers or distributors can gain points for shopping on the site.

Also, they have begun to offer e-commerce services, where they tie up with sites to run the back-end of sales that happen from them. The company is already doing this for Titan through titanworld.com.

"We presently have a customer base of 1 million. We want to reach a 5 million customer base in three years. I believe this will be aided by broadband penetration. Even if broadband increases Internet penetration by three times over the next five years, we will still be scratching the surface," says Vaitheeswaran.

More importantly, the company which has been restricted to Indian shores so far, is not planning on being so for long. Fabmall.com will integrate their catalogue of offerings with Indiaplaza.com, an NRI e-commerce focussed site, along with tying up with Sulekha.com, one of the largest NRI community sites in the US.

"The NRI gifting market remains largely fragmented and therefore their potential is just lying there to be tapped. In the US alone, there are around 1 million NRIs. Even assuming that they send two gifts to India every year, at a total cost of $50, we are talking of $50 million. Even a small share of that market, will make a big difference," he said.

Fabmall.com offers a wide range of products including music, books, jewellery, groceries and others pursuing their aim to be 'the high street of the internet'. The site sees around 600 to 800 transactions everyday and has a 47 per cent repeat customer ratio.

Bangalore, Chennai and Mumbai are the biggest contributors to the company's revenues. Interestingly, only 40 per cent of business comes from the top eight cities and around 35 percent of orders are meant as gifts.

The company is testing a solution for marketing and selling their products via. mobile phones but Vaitheeswaran estimates it will not be launched this year. Fabmall.com was spun off as a separate company in May 2004 from its parent Fabmall when it was sold off to Trinethra.