Gadgets are very in! Ebay has been my favorite place to look out for them, if not buy. However, there are other places to figure out the best deals in the digital lifestyle marketplace. Today we have Sachin Singhal, co-founder and Business Manager at Cafe Gadgets on board.
When asked for the difference in a startup like cafegadgets in the U.S. vis-a-vis in India, Sachin says,
USA is a matured e-commerce market with cut throat competition. It’s difficult for any start up to leave any impression on users unless it has a unique business model or patience to wait for years.
Co-founders at CafeGadgets – Sachin Singhal, Bharat Khani & Hitesh Dhingra.
Following is an excerpt of the interview;
Tell us about Cafe Gadgets. What tempted you guys to startup Cafe Gadgets? What is your background?
Cafegadgets.in is one of the largest e-distributor for IT & digital lifestyle products. It has a vast product catalog of over 4000 products & 80 brands. Original manufacturer’s warranty, free shipping all over India, multiple payment options & prompt delivery caters the need of gadget savvy audience.
Most people feel vulnerable to fraudulent online sellers due to low quality or grey products. Late delivery & poor customer service add to the woes of the customers. We noted all these pain points to conceptualize the idea behind cafegadgets.
Hitesh Dhingra, one of the co-founders, started his career in IT hardware industry as a product manager & then worked with a start up Online advertising agency, where he handled some key Dotcom & E-commerce accounts. He worked out the purpose behind Cafegadgets, later on was proposed to me. I found it quite impressive and decided to join him. Prior to that, I was working as project leader in Tata Consultancy services.
‘Café Gadgets’, as the name sounds, is very techy. Tell us about the Research and development you people had to undergo before starting it up, the market analysis to profit estimates; everything.
Our target audience falls in age group of 18-35 years, gadget savvy & holds credit card. We wanted to reach out these people with an eye catchy name. The name “cafegadgets” fitted this purpose.
Gadgets & Electronics is the second largest selling product category online after travel. We realized the potential of e-commerce in this arena. We didn’t want to land up in the same shoes of existing e-tailers of this category. So, we invested lot of time in finding out the peculiar problems related to this vertical & the tangible ways to cure it. We grafted the estimations of sales & profits based on the projections of internet penetration, credit card usage, estimated traffic on existing e-commerce websites & cost of acquisition.
What do you think is the difference between startups like Café gadgets in India and in the US – in terms of customer exposure, adaptation rate, and customer’s willingness to spend?
USA is a matured e-commerce market with cut throat competition. It’s difficult for any start up to leave any impression on users unless it has a unique business model or patience to wait for years.
Weak pc penetration, Low broadband usage, reluctant credit card users and high cost of acquisition are the major gray areas in Indian e-commerce space. But on the contrary, in 2008, there were 55 million internet users in India with year on year growth of 30%. At this rate it will breach 100 million barriers in next two years. Similar growth trends are predicted for broadband subscribers. Considering the past this is quite optimistic. Majority of the online shoppers don’t hesitate in using credit cards online provided the transactions performed by them are safe. Internet security is also major concern in this arena. We can win the trust of the customer if we have certifications like Verisign, Hackers Safe or Thawte Seal.
Is it a private limited or a partnership firm? What’s the main source of revenue for café gadgets?
Cafegadgets is a private limited company. Our major revenue streams are Sales margins & advertising wherein we charge various brand owners the retainer fees to set up and manage their brand stores on major E-commerce website.
How many of your original ideas did you have to sacrifice to be successful?
We have implemented more ideas than we actually anticipated. Most of our ideas have been original & different from existing e-tailors in the market. We are a proud family at cafegadgets to achieve this much in span of just 18 months. We are quite optimistic to shape more and more ideas into reality in the near future.
Tell us about your team. How do you recruit them? Can you share with us the modus operandi?
As every other start up we faced the problem to attract the right talent. People were precarious when it came to work in a start up environment. Initially we tried to reach people through contacts, making them understand our business requirement & needs. We wanted to have people on board, who can play different roles at different times. With limited budget, it was difficult to adopt “horses for courses” strategy. Luckily, we were able to convince those people who were ready to accept challenges & believe in themselves.
In general, the Web World is too crowded. How do you think a website like Café Gadgets has a chance to make a splash?
Certainly. The concept of vertical online stores are new in India. Since inception our focus was to lead the vertical of digital lifestyle & IT product category.If you take a look at Indian e-commerce industry, there is hardly any trusted e-tailor who is leading this segment. Most of them sell grey & low quality non branded products. We realized these pain points and cater the need of highly focus gadgets savvy customers. Today we are the one stop destination to buy 80 top brands with manufacturer’s warranty.
What features make Café Gadgets better than the existing competition?
Our USP includes,
- First E-Tailor to launch Product/price search on Mobile.
- First E-Tailor to offer Free Purchase Protection to its customers.
- First E-Tailor to offer E-store to Corporate Employees.
- Focused on IT & Digital lifestyle products.
- One stop E-business solution provider for IT & Digital lifestyle brands.
- Deals only in branded products with original Manufacturer warranty.
- Free doorstep delivery within 72 hours for 90% of the products.
- Exclusive prices/deals directly from the brands.
How do you think of promoting innovation at Café Gadgets? Apparently, it seems to be inclined over sales and profits more than scope of innovation.
The only constant thing in this world is “Change”. E-commerce industry is dynamic. In order to be the market leader, one has to lead from the front in terms of innovation. We are the first non travel e-tailor in the country to offer product/price search on Mobile Phone. We realized the potential buyer’s community in corporate employees & thus became the first e-tailor to offer customized e-store to corporate employees. We are also the only e-tailor in India to provide 100% purchase protection to our customers against loss due to burglary, theft or accidental damage. These services helped us in converting customer satisfaction into customer delight. Once that happened, sales & profit followed.
Thoughts about the recent financial instability and what does this mean for startup valuations?
The online industry in India has been affected to a great deal, but not as much as in US. The recession is blessing in disguise for those start ups that have robust business models. For others it will speed up the dying process. At this point of time there is strong exit barrier due to somberly valuations. This is perfect time to float your business idea in market due to resource availability & retrenchments in major MNCs.
What is the revenue model for Café Gadgets? What other revenue models are you planning to consider in the future?
Cafegadgets has a very robust revenue model. Main stream of revenue is B2C & B2B. Apart from that, we also generate revenues from brands stores on cafegadgets, managing premium stores for brand owners on affiliate websites & powering e-commerce for brand website. Ad sales also contribute to the revenues.
Is Café gadgets an abridged version of E-bay?
EBay is a market place where there are sellers & buyers. Buyer can choose the seller of the product on the basis of rating, price & creditworthiness. EBay sells both new & refurbished products which may carry manufacturer’s warranty or seller’s warranty. Cafegadgets guard its customers from all the doubts that might influence buyer while purchasing the product online. We deal only in branded high quality products which carry original manufacturer’s warranty & deliver it to customer at the doorsteps without any extra charge. We provide the sense of safety & security whenever someone shops from us.
Where do you see Café Gadgets after twelve months and how do you propose to do it?
We would like to grow in terms of customer base, number of brands, products, driving e-commerce solution for brand owners, revenue from brand stores, ad sales & brand building. Beside focused approach, Ideas & innovations will be the major force in scaling up.
Share some of your ideas and experiences with Café Gadgets.
It has been a pleasurable experience upto now. Everyday has surprising things, challenges & new lessons to be learnt. After 18 months we feel the journey has just began on this long unwinding road…
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{ 2 comments… read them below or add one }
This cafegadgets is not a trustworthy site to order from!
I ordered an HP backpack for my laptop and received an altogether different backpack. Then I was asked to pay 300 bucks more extra and was asked to send the earlier backpack by courier – all by my own expenses!
A very painful experience!!
hello sir.
can u pls highlight me with the man power requirements for running an e commerce site.
piyush pande._919975938073