I quit a safe career and took the riskiest and scariest of opportunities!
In the middle of a fast-track corporate career, when Sundeep Malhotra decided to switch tracks and start a home shopping channel, his family was aghast. Tu dupahar ko TV pe sauna belt bechega! (You will sell sauna belts on afternoon TV!), was what his horrified mother asked him incredulously. After six years in Pepsico India, following a five year stint in Benneton and that coming after a 12-year innings at Bata, when Malhotra weighed his options he just found more of the same.
In the middle of a fast-track corporate career, when Sundeep Malhotra decided to switch tracks and start a home shopping channel, his family was aghast. “Tu dupahar ko TV pe sauna belt bechega! (You will sell sauna belts on afternoon TV!),” was what his horrified mother asked him incredulously. After six years in Pepsico India, following a five year stint in Benneton and that coming after a 12-year innings at Bata, when Malhotra weighed his options he just found more of the same.
“I had three-four opportunities but they were all corporate roles, heading businesses in the same sort of area,” he recalls. The opportunity of founding HomeShop18 was different. “It was the riskiest and scariest of all opportunities that I had. I instinctively said yes, I wanted to do this,” he says.
The road to success for Malhotra was not easy. “The day I announced that I was quitting a great job to become an entrepreneur in a completely new field, the reaction of my family was my first learning. I realised that I was getting into a field that was regarded so low and lacked consumer confidence,” says Malhotra.
An entrepreneur not only understands fully the nature of the risk he is taking but also knows whether the risk is worth taking. He recognised that building credibility for home shopping was the biggest challenge that he would face.
The idea of re-inventing home shopping in India was brought to Sundeep Malhotra by Network18 and SAIF Partners. SAIF had earlier invested in a similar kind of business in China. Seeing early success, they wanted to repeat the same in India and found a media partner in Network18.
Today Sundeep Malhotra is much applauded. Starting with TV, and then moving to e-retail and recently to mobile shopping, he has pioneered a complete virtual world of shopping in India. Let us walk down the memory lanes and find out how this star entrepreneur came out of the much disparaged world of home shopping smelling of success.
Moving Off the Corporate Ladder
Most professionals reach a certain point when they want to reinvent themselves. Malhotra was in one of those phases in which he wanted to do something different both in terms of reengineering his skills and trying his hand at doing something different. While at Pepsi, he was getting a lot of opportunities but all of them were of similar roles. However, Malhotra was keen to do something radically different.
“I always wanted to do something on my own. It is a combination of the right opportunity at the right moment when you take a decision. Many a time these decisions happen on the spur of the moment. I was not interested in becoming an entrepreneur then and there because entrepreneurship was something that I always wanted to do but I did not know if I had the guts or the capabilities to do it. This opportunity came to me and I instinctively said yes I wanted to do this. If I have to try something as an entrepreneur now is my chance,” recalls Malhotra.
The offer to launch HomeShop18 gave Malhotra an opportunity to try his hands at entrepreneurship and, building a business in a completely new industry, which he found really exciting. Malhotra thought it was a great way to enter a new industry and imbibe some new skills. But has this given Malhotra a chance to play his entrepreneurial side? “One of the greatest things the investors gave us was the freedom to think and the space to swim or sink in its totality. Rightfully so because it was such a new industry for India and such a new domain that neither the investors nor I knew about it. So it was a space where I could put all my efforts and take a risk,” says Malhotra.
The association with Network18 was an enormous advantage, both in terms of lending credibility to the new venture as well as the expertise they brought to the table in the TV space.
The challenge of building consumer confidence was Malhotra’s number one priority. It still remains an important on-going task. But in addition, finding domain knowledge early on was also difficult. He did not know who to hire to build something like this. Vendor and brand partnership was another issue because nobody wanted to give him a genuine product. Every brand said that if they gave him a product, their credibility and image would be spoiled.
Building a team was a big challenge. “I could not find people who would come and join a start-up in a domain that was under the shadow of lack of credibility. Finding talent was very difficult. I remember doing 900 auditions finding producers, directors and anchors. But I could not find anyone. I was getting anchors who were comfortable as script readers or those who came with a theatrics background. But I needed normal people with some intelligence who could sell a product and understand consumer psyche. I needed sales people who were comfortable and were not TV-shy. So we hit upon this idea of getting people from radio,” recalls Malhotra.
Then, finding brands that were willing to give him products was extremely difficult. Seeing the earlier state of teleshopping nobody realised its potential. Malhotra says, “I realised the potential after I got into it. There were instances that added to building our confidence in the business. The first product, which we started selling, was flowers with Ferns N Petals. We outsourced a small call centre in Delhi and we put a 15-second Television Commercial (TVC) on air. On the very first day, we started getting calls from customers from all across the country. We got around 300 calls. That was the moment that gave me confidence that there was potential in this domain. It was also the moment that taught me that we needed to build every aspect of this business ourselves. We shut that outsourced call centre and started building our own sales team. It was one of those good steps that we took early on.”
“It took me close to eight-ten months going from brand-to-brand trying to sell them my concept and convince them. But I could not convince anybody. It was only about after two years, when we started doing some kind of business. There was scale on our side and then brands started testing the waters with us,” reminisces Malhotra.
The Journey Takes Off
Micromax, Spice Mobile, Videocon, Whirlpool – all started associating with HomeShop18. Thereafter, lots of brands came on board from Samsung to Sony. But the brands that came on board were all in the digital and mobile space. It is only in the last two-and-a-half year that the business has extended its product portfolio from digital to lifestyle.
At every step, Malhotra innovated and tweaked the model to make HomeShop18 one of the most differentiated e-retail businesses in the world. Malhotra says, “Our unique multi screen strategy makes us equally relevant to TV shopping, e-commerce and m-commerce customers while allowing us to extend a common backend for fulfilment, delivery and consumer engagement. This strategy is designed to cater to India’s diverse consumer markets and segments. We are constantly innovating to provide shopping convenience to customers. We have launched an interactive shopping wall at T3 terminal at Delhi Airport. Its a dynamic wall, where the product display is continuously changing and offers consumer the easy convenience of simply scanning the QR code provided with the product image and confirming their order while waiting to board a flight.
So what were the significant milestones on the way? “With every passing year, there are new challenges and new targets. A very important moment that gave us huge confidence was when a global listed company wanted to partner with us. GS is the third largest home shopping company in the world and the largest ecommerce company in Korea. It brought in a global leader and it also brought in domain knowledge that we sought. The second defining moment was when the channel went live and our customer base and sales crossed the inflection point to start growing exponentially. The launch of our e-commerce business brought on a much younger audience on board,” says Malhotra.
“When we started the TV business we did not have much money. We could not afford the big cities. All channels there had tariff which we could not even afford. Thus, we started focussing in tier III and IV cities but we soon realised that our consumers were in the big cities too. So we changed our market focus and went to the metros. Our cost of acquisition increased, but consumer adoption was rapid,” asserts Malhotra.
“The growth has to be more in terms of product categories. There are many categories currently that we are building and making stronger. Today, we have apparel and health and beauty product categories, there could be packaged food tomorrow. The next growth area is the technology, which is consumer focused. Third area would be investing behind the consumer and brands.”