Monica & Manoj Gupta, Craftsvilla: E-commerce platform for Indian handicrafts

Manoj, how did the business idea for Craftsvilla come about?

Well, it was conceptualized a year ago by my co-founder Monica Gupta, who also happens to be my wife. I was with Nexus Venture Partners then and I was very familiar with the e-commerce space. I was on the board of Bigshoebazaar (which runs Yebhi, a fashion and lifestyle e-commerce portal) and Snapdeal (click here to read YourStory’s interview with founder Kunal Bahl). So, I swiftly understood the power of the e-commerce and handicrafts combination.

Also, it’s a long-tail category. There’s scope to build a global platform, with lots and lots of products. So, bearing that in mind, we launched Craftsvilla and today, it’s the largest online handicrafts portal inIndia, in terms of inventory.

What are the challenges of building an e-commerce company in the handicrafts space?

It’s a virgin category. There’s high defensibility and the lead time we’ve got is solid. The challenge, as it is with other e-commerce ventures, is the backend. The sourcing and supply chain system in handicrafts is disintegrated and it is in need of aggregation. And finally, since it’s all handmade, maintaining consistency in terms of quality is the key factor. We need to filter out vendors constantly. By vendors, we mean artisans from small villages acrossIndia.

So, being a VC helped you figure out the size of the opportunity that you were looking at.

Yes, the VC background has helped. I know about the size of the market, the market demand, etc. And we’re very clearly looking at global scale. It’s not as if I’m relying entirely on the e-commerce and internet venture hype right now. We’re a unique e-commerce story with a social angle and that’ll set us apart.

Can you take us through some numbers that quickly capture the strength of the platform?

We ship globally and it’s free for goods worth more than $250. We have more than 2500 product on the site and within the next three months, we should have more than 10,000 products. We work closely with more than 100 vendors and over 1000 artisans acrossIndia. We’re also setting up an NGO for artisans. But we, ourselves, are not an NGO. I strongly believe that having a commercial mindset is important to build things of scale. The truth of e-commerce is that you can’t be sustainable with, let’s say, a margin of 20-25%. Scaling up quickly is the name of the game.

Tell us about your positioning. Are you looking to build Craftsvilla as a private label brand?

The positioning is clearly “handcrafted luxury.” Unlike our other competitors inIndia, ours is not a marketplace model. I mean, it’s hard to pull off that sort of model inIndia. And anyway, in e-commerce, there’s no room for second and third place. Either you lead or you drop out. And yes, we’re trying to build the Craftsvilla brand. A vast majority of our products are unbranded and they’re all sold under the Craftsvilla brand. If you notice, there isn’t a big brand in this category apart from FabIndia. So, we see that as an opportunity.

What are the consumer trends that you’re noticing on Craftsvilla?

About 80% of the buyers are women. The push has been to revive handicrafts and make it conveniently accessible. We try to keep things colourful and lively and that attracts the 18-35 age group buyers. More than 50% of the orders come from Tier 2 cities. And as it is with e-commerce portals inIndia, 50% of sales are Cash On Delivery (COD).

It’s not every day that we see a VC turning entrepreneur. Tell us about the experience and how the startup ecosystem has been reacting to that move.

Even at Nexus, it was almost as if I was starting from scratch. I was the first non-partner to join Nexus here inIndia. And today, they’re one of the leading early stage funds. In my head, I was never a VC. And anyway, as an early stage VC, you’re almost like an entrepreneur. I guess I’m drawn by the idea of building something from scratch and seeing it o somewhere.

Most of my VC friends have been surprised by the move. Some of them wish that they could do this as well. But they also realise that it’s not an easy journey. When I left Nexus, I stepped out of a bunch of board seats. If you look at the rewards of staying in Nexus versus the risks of starting up, it was a painful decision. I mean, at the end of the day, there’s still some amount of glamour associated with being a VC. The truth is that I can always go back to being a VC. But I’ve always wanted to create a big company inIndiaand that’s what we’re trying to do with Craftsvilla.

We at YourStory wish Monica and Manoj much success with Craftsvilla. To check out this e-commerce platform selling handcrafted goods, log on to www.craftsvilla.com. Also, do let us know what you think of this story by writing to [email protected].

Sriram Mohan | YourStory | 2^nd August 2011 |Bangalore