Retail executives set to ride online shopping boom
Risk investors now want entrepreneurs with domain exposure, while India's e-commerce potential gets crowded with start-ups, raising fears of a messy shake-out in the fledgling industry.
MUMBAI: US venture capitalists Lightspeed and Helion Venture Partners are backing a Reliance Retail CEO for an Internet start-up, as an increasing number of retail industry professionals bet on the Indian online shopping boom. Risk investors now want entrepreneurs with domain exposure, while India's e-commerce potential gets crowded with start-ups, raising fears of a messy shake-out in the fledgling industry.
Technology professional-turned-entrepreneurs spearheaded many of the early online retail, or e-tailing, outfits like Flipkart and Myntra, but that's changing with the latest entrants.
Consider this: The India unit of Italian fashion retailer, Benetton lost two senior honchos in recent months to the country's Internet story when private equity firm SAIF Partners roped them in to start an online apparel brand, Zovi. Benetton's design head Sartaj Mehta and head of retail Kavindra Mishra boarded the venture with stock options, and were joined by Uday Mehra, another senior executive from apparel major,Tommy Hilfiger's Asia Pacific operations.
US based-Venture Capital fund, Norwest Venture Partners invested in a forthcoming online lifestyle products store, Pepperfry, floated by former eBay India country head and ex-Cadbury professional, Ambareesh Murty along with another eBay executive, Ashish Shah, in an instance of VC funds pinning hopes on the industry experience as a key differentiator.
Helion has already backed online fashion retailer Yepme.com which has former Shopper's Stop and Hindustan Unilever honchos Anand Jadhav and Vivek Gaur on board.
India's e-commerce engines have mopped up over $400 million commitments in 2011-and there's more to come before the year ends. Recently, Avendus Capital said in a report that domestic online retail will lead the e-commerce surge with $12 billion potential in 2015. The number of active online shoppers is projected to reach 38 million from nine million now, the report added.
"I saw that there was huge opportunity in the lifestyle e-tailing segment and significant chances of making a successful business out of it," said Ambareesh Murty, founder of Pepperfry.com, who lined up $5 million initial funding for his yet to be launched venture.
Some retail industry observers said middle-level executives might be more comfortable in their cross-over to e-tailing unlike in the past. "The professional risks aren't too high and there's enough capital available. Also, they are more familiar with online transactions," said the chief executive of a leading retailer who did not wish to be named. This time, connectivity with consumers is not a challenge with smart phone and internet penetration growing rapidly, he added.
Technology professional-turned-entrepreneurs spearheaded many of the early online retail, or e-tailing, outfits like Flipkart and Myntra, but that's changing with the latest entrants.
Consider this: The India unit of Italian fashion retailer, Benetton lost two senior honchos in recent months to the country's Internet story when private equity firm SAIF Partners roped them in to start an online apparel brand, Zovi. Benetton's design head Sartaj Mehta and head of retail Kavindra Mishra boarded the venture with stock options, and were joined by Uday Mehra, another senior executive from apparel major,Tommy Hilfiger's Asia Pacific operations.
US based-Venture Capital fund, Norwest Venture Partners invested in a forthcoming online lifestyle products store, Pepperfry, floated by former eBay India country head and ex-Cadbury professional, Ambareesh Murty along with another eBay executive, Ashish Shah, in an instance of VC funds pinning hopes on the industry experience as a key differentiator.
Helion has already backed online fashion retailer Yepme.com which has former Shopper's Stop and Hindustan Unilever honchos Anand Jadhav and Vivek Gaur on board.
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Venture capital (VC) funds are scouting for teams with a combination of technology, retail and internet expertise in their fresh investments. "It's essential to see who the people are behind a venture before making investments, as e-commerce is a hyper-competitive consumer facing business," said Niren Shah, MD, Norwest Venture Partners.India's e-commerce engines have mopped up over $400 million commitments in 2011-and there's more to come before the year ends. Recently, Avendus Capital said in a report that domestic online retail will lead the e-commerce surge with $12 billion potential in 2015. The number of active online shoppers is projected to reach 38 million from nine million now, the report added.
"I saw that there was huge opportunity in the lifestyle e-tailing segment and significant chances of making a successful business out of it," said Ambareesh Murty, founder of Pepperfry.com, who lined up $5 million initial funding for his yet to be launched venture.
Some retail industry observers said middle-level executives might be more comfortable in their cross-over to e-tailing unlike in the past. "The professional risks aren't too high and there's enough capital available. Also, they are more familiar with online transactions," said the chief executive of a leading retailer who did not wish to be named. This time, connectivity with consumers is not a challenge with smart phone and internet penetration growing rapidly, he added.
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"You need brick and mortar experience to head the front-end of these internet ventures and that is what a lot of professionals are looking to do. With the amount of money flowing into this space, it makes for a good move as there are a lot of opportunities to use your domain knowledge in starting something of your own," said K Sudarshan, managing partner-India & Regional VP-Asia, EMA Partners International, an executive search firm which hires top level professionals for its clients.Download
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