Business, Ecommerce

Ecommerce portal bids farewell

Gurgaon based e-tailer of educational and school supplies, has been shut down, as per a message displayed on the site. The company which had scaled down operations over the last few months, and had been trying to raise capital, has finally had to close its operations.

Launched in September 2011, this retail venture was founded by Manoj Chandra, a senior retail professional, erstwhile VP – Marketing, Bata India, and Ankur Dinesh Garg, an IIT graduate with over a decade of experience in ecommerce technologies.

The portal was the first in India to focus on redefining the educational supplies market by providing a one stop shop to parents of school going kids and catering to the needs of the K-12 school segment. The company had shown fast GMV growth and had developed a horizontal catalogue of products catering to school going kids. Also, it received a funding of USD 2 million in two parts viz. December 2011 and September 2012.

Apart from AllSchoolStuff, other major ecommerce players who have shut down due to lack of funds, are IndiaPlaza, SeventyMM, Hushbabies, KoolKart, 21diamonds,, Hutk.

According to a recent CRISIL report, the online retail market in India is expected to become an INR 50, 000 crore industry. Also, the online school and student supplies market is currently valued at 500 to 1000 crores. But, looking at the way startups are getting their portals shut down, does this growth really makes sense? Do we assume that in future, this will be the playing field of only a few biggies?

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  1. 1

    Every emerging retail business ( based on low cost option) view this in terms of Volume and scalability.

    The analysis goes like if Sale volume grows to X per month, the expenses ( per acquisition / per item logistics) will reduce by Y per item. Even flipkart struggled to break even due to initial big discounts and prompt services it gave. But it had numbers down the line for future.

    The one who adheres to these estimated numbers, wins. Who doesnt, loose.

  2. 4

    I believe the marketplace and the multi-channel etailing is the only way to steam growth and show numbers that CRISIL predicts. Any other model, you are just feeding googles and facebooks of the world in terms of marketing $$. I think ASS (Allschoolstuff) shutdown due to excessive marketing spent with no true ROI after acquiring the customer. Also, the margin on stationery/toys category is the lowest in India. With low ASPs (Average selling prices) products you cannot expect returns as logistics itself eats away 25-30% of the shipping fees. e.g. Rs.200 pencil box you get a net margin of 30%. Rs.60 is what you have to play with. Rs.40 gets eaten by logistics, Rs.5 by Gateway and another Rs.5 by packaging/operations. Even if you have earned Rs.10 on this deal you have spent almost Rs 50 for the click that converted to sale. A net loss of Rs.40. ASS should have realized this in their first year of operations. I do not know what inspired them to continue.

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