“I was invited as a speaker for a panel discussion on e-commerce. There was an all-male member panel and then, one for only women. I was asked to be a part of the latter and was very offended because the men on the other e-commerce panel were not half as successful as I was. I do mind being slotted as a woman entrepreneur at all times,” affirms Radhika Aggarwal, co-founder, ShopClues, one of the country’s largest e-commerce marketplace.
Aggarwal set up the e-commerce venture with her husband Sandeep and Sanjay Sethi in 2012. ShopClues happens to be one of the newest entrants into the Unicorn club, the coveted label earned by start-ups that have crossed the billion-dollar valuation mark. But what really sets it apart from the other e-commerce players is the founder’s claim of being profitable by 2017. ShopClues has about 25 million registered buyers, 500,000 merchants and ships about three million products a month.
Always on the move
Aggarwal wasn’t born into a conventional business family. Her father worked with the Indian Army while her mother was a dietician. Like any other army ward, Aggarwal had her share of Bharat Bhraman (India excursion). “I grew up in 10 different cities, including Pathankot, Ahmednagar and Jodhpur and attended as many different schools,” she shares. But she admits that the constant process of shifting base had its own set of advantages. “You had to change school, move to a new place, and leave your friends. In hindsight, it was the best childhood one could ever have. It gave us the opportunity to make new friends and adapt to change. That experience helped me while running a business,” she says. “You can put me in any situation, even where people don’t speak the same language and I can adapt well. Perseverance is another quality I picked up during my growing-up years. I don’t give up easily and that helps, because everyday is a struggle in the start-up world,” she reveals.
Her father left the Army to start his own health club at the age of 45, back in 1992. She helped him in his entrepreneurial venture during her early twenties as a fitness trainer, which is also how she secured her first pay cheque of Rs.400. However, her first encounter with entrepreneurship stemmed not from the discovery of an idea, but from the dearth of options available. “I started my own advertising agency in 1997. Honestly, I would have preferred to work with a reputed firm in Delhi or Mumbai, but I was in Chandigarh, and I wanted to do advertising, so I started my own agency. It’s more serendipitous, actually. You end up doing a lot of these things early on and that helps you in the future,” she says animatedly.
Two years later, she pulled down the shutters on the agency to pursue an MBA from Washington University in the Midwestern state of Missouri in the United States. After her graduation, she worked in marketing for firms such as Nordstrom in Seattle, doing strategic planning, and later at Goldman Sachs. All the while, Aggarwal was doing her own little thing by the side. “I ran a fashion blog targeted at South Asian women. I didn’t raise money, and that taught me frugality which we replicated when we launched ShopClues,” she says. It was during her college days in the States that Aggarwal met her husband and future business partner, Sandeep. She credits him for encouraging her to take the entrepreneurial plunge.
Along with her husband, Aggarwal’s mother, too, has been a great influence on her. “My mother is a very strong and enterprising woman. She had to put her career on the backburner because my father’s job involved shifting from place to place. But, I have seen her reshape her career to suit the new place. She has done varied things from fashion designing to teaching in schools and finally, becoming a successful dietician,” she says. Her enterprising nature seems to certainly have rubbed off on her daughter.
But, it was not an easy beginning for Aggarwal. When the founders landed in India back in 2012, bustling with enthusiasm on cracking e-commerce, they were in for a shock. The Delhi Airport was totally covered by the Snapdeal logo. Aggarwal admits that their confidence met with a massive jolt. “When we landed in India, there was this crazy amount of money being spent by e-commerce players. It was a game of who can grow faster. Jabong and ShopClues were launched around the same time and they spent inordinate amount of money trying to own the market. For somebody to come and say this market can be won in a sensible way with positive unit economics, sounded unbelievable and I think, even the investors were not used to hearing that,” Aggarwal recalls, describing the initial phase of the start-up.
Investors were also jittery about betting on new players because of Amazon’s imminent entry into India. “There was a moment when we questioned whether we took the right decision of coming to India. Our first-term-sheet was withdrawn because there was a news article stating that Amazon was entering India,” says Aggarwal. There were minor operational hiccups for the new kid on the block. “It was Valentine’s Day soon after we started. We had received 300 orders for flowers and our merchant did not show up at the last moment,” recounts Aggarwal. It turned out to be a social media nightmare for the newly launched portal. “We were very small at that time. So we had to rely on some else for delivery. But we didn’t let it get to us. We took a step back and apologised to all our customers. We shipped soft toys and chocolates to all of them and they were very happy with the way we addressed the issue. I am glad that I didn’t give up at that moment,” says a relieved Aggarwal.
Even as they went about ironing out the kinks, there was a bigger storm brewing in the interim. In 2013, her husband, who had earlier worked as an equity analyst, was arrested by the FBI on charges of insider trading. “He had to step down as CEO. So, for me, dealing with that personal crisis and the crisis at work was one of my most testing times. I was trying to keep both the company and my family together. The only reason I was able to do that was due to the support system I had around me,” shares Aggarwal.
She attributes her ability to function during testing times to her team. “My success as an entrepreneur is largely team-driven. It was a perfect start as Sandeep understood the entire internet ecosystem well. There were also others such as Mrinal Chatterjee who handled technology, Devesh Rai, who handled merchants. These people have built up the company to what it is today.” She also credits her children with being accommodative and understanding of their parent’s professional choices. “They see both their parents working hard and both of them learn from us. Even today when I travel extensively, I do so knowing that the children will adapt to their surroundings,” says the confident mother of two.
In the e-commerce space, most start-ups were being awarded for their gross merchandise value (GMV). So, achieving scale was the prime focus area. However, ShopClues wasn’t chasing growth at any cost. “From day one, we have been chasing profitability. We had a clear understanding of what we are trying to build. Flipkart had very deep pockets and Snapdeal, too, had money. But we believed in the power of our model and felt we didn’t need to do it like the others. And that has been our differentiator,” says Aggarwal who has handled marketing and merchandising aspect from the beginning.
According to her, the company is on track to be profitable by 2017 and what excites her more is the fact they have managed to build the business with the least amount of capital. “We have raised less than $190 million compared to $3.2 billion raised by Flipkart, $2.1 billion raised by Snapdeal and $5 billion invested by Amazon,” asserts Aggarwal. The company was valued at $1.1 billion when it raised an undisclosed amount from Singapore sovereign fund GIC and existing partners such as Tiger Global and Nexus Venture Partners. “It is a validation that our business model works and it is our goal to list the company in another two years,” she says. ShopClues clocked a GMV of $1.2 billion in FY16 and the aim is to more than double that figure to $3 billion by end of FY17. Some would say Aggarwal is biting off more than she can chew. But, it really is about the confidence of an enterprising woman in an all-boys’ club.