I recently met Sundeep Malhotra, CEO of Home Shop 18 at an online retailers’ conference in New Delhi. Brilliant speaker and had the audience under a spell throughout his talk. Home Shop 18 has scaled from Rs.35Cr gross sales in year 1 to Rs.200Cr in year 2 and Rs.360Cr in year 3. This puts them at an average of Rs.1Cr of sales per day. Home Shop 18 created the first 24 hour shopping channel in India. In their first year, they tried to replicate the formula that worked in the American living rooms, viz. selling sauna belts, astrological gems and other whacky products that appeal to miserable couch-potatoes and gossiping housewives. Of course, there was the Indian touch of offering ek-mukhi rudraksh malas and yoga paraphernalia, but a good part of the programming consisted of white women speaking studio-translated Hindi matching note by note on the superlatives.

This weekend, I took the time to watch Home Shop 18 for an entire hour on a Saturday evening and took a sneak peak at their 6 hours of original studio programming per day. The first 30-minute segment was fake gold and stone jewelery appealing to the sensibilities of housewives organizing kitty parties positioned as Satyanarayan pooja. The next 30-minute segment was a fake iPhone appealing to the sensibilities of the small town businessmen who travel extensively, use 4 SIM cards at a time and care about the status projected by a multi-touch phone with a fluorescent fish as the background. In both cases, it was not too hard to believe that they fulfill 6,000 transactions a day across 1,000+ towns of India. Mobile phones and jewelery also seem to be a departure from the purely niche and otherwise inaccessible categories.

Similar to the US, television reaches majority Indian households and the mobile phone reaches majority spending consumers. However, the Internet reaches less than 20% of spending consumers in India, compared to over 80% in the US. At the same time, consumer spending in India has increased widely and the penetration of retail malls and distribution network is lagging behind the aspiration to spend in smaller towns. Television creates a desire to buy certain products, yet the distribution network makes those products inaccessible. Along comes Home Shop 18 and fills this gap. Although a moving target, it is a large market considering the consumer base of 350MM+ representing 110M+ households. The phone is obviously an integral part of the eco-system since it gives consumers a way to connect with the business and makes the transaction possible, while the distribution network is integral because it completes the loop where brands and retailers have failed.

Home Shop 18 has now learned that they have unlocked a market for products that fall in the delta of media reach minus distribution reach, and even genuine brands are eligible within their model, if not more so. They are aggressively extending their catalog to include originals instead of fakes. Of course, the challenge is to reach targeted consumers for high value products, instead of mass consumers for high volume products. It is unlikely that a buyer of genuine products would watch the same channel, since she has been cognitively trained to switch the channel as fast as a mother stumbling upon a porn channel in the presence of children. However, it is possible to reach targeted consumers via the large network of private channels that are looking for a revenue stream beyond pay-per-second advertising. There is no dearth of genuine brands looking for reach through the barrage of private channels, if only their ROI risk was better managed. If Home Shop 18 can successfully bridge these two made-for-each-other needs in search for a business model, rest is clockwork and a short runway to the bank.

While entrepreneurs in small towns have figured out Home Shop 18 as a an alternative distribution channel that gives them opportunity to mark up and locally sell products to those who do not watch television, it re-iterates the value Home Shop 18 is creating as a distribution channel.

India spends Rs.10,000Cr a year on television, another Rs.10,000Cr a year is spent on print, and Rs.5,000Cr a year on other media (outdoor, BTL, online, mobile, etc.). The phone is penetrated across all consumers of this media and all consumers who are spending. Are there more “new retail” companies in the making who can address the same delta of media reach minus distribution reach? I would like to believe so.

Think about the last 10 books you read and the reason you picked them up and not any other. In my case, all of them were recommended by friends, or by the author/publisher/editor, or by Amazon.com which knows my reading patterns, or by fellow reviewers of books in the blogosphere and media. Whenever I found myself in a bookstore on impulse, I returned empty handed. Probably picked up a new release by a favorite author every once in a few visits. A book is something we give many hours of our time to and therefore build a fairly strong reason to read it before deciding to purchase a book.

One of the books recommended by a friend two years ago was Cosmicomics by Italo Calvino. Since then, I have been trying to get my hands on the book in Mumbai. Small bookstores like Granth and Danai in my area did not have it and couldn’t get it for me all this while. Large bookstores like Landmark and Crosswords did not have it and could not find it in stock at any of their outlets across Mumbai. Online stores like Indiaplaza and Indiatimes had no clue who Italo Calvino is. I finally found my copy on Flipkart.com. Found it the first time I looked, ordered it for Rs.561 and am halfway through the book in the following week.

Books are the killer category (arguably) that brought e-commerce to the world. After a decade of failed attempts in India to create an online business for books, along comes Flipkart.com and makes it happen. At the time of writing this, I estimate that they do 40,000 transactions a month at an average selling price of Rs.500. Why did this work now and not in the last 10 years? More Internet penetration - No. More book enthusiasts - No. Past entrepreneurs were stupid - No. Better recommendations & reviews - No.

When you Google a book, you will find it on Flipkart.com. When you land up on Flipkart.com, you will get a certain comfort about the site, about the offer price and about the delivery time-frame. Once you give it a shot and have a good experience, you will go back to it once again when looking for a book. After successive positive experiences, you will tell your fellow readers about it. Millions of such chains are being fanned out. Flipkart.com simply created a comprehensive catalog, made it easily accessible online, gave you all information you needed about the book and nothing you didn’t, did enough to win your trial at the risk of losing a few hundred rupees, then delighted you with the experience to create a habit of coming back.

Indiaplaza, Rediff, Indiatimes and all other past online book stores tried to replicate the in-store format of taking the highest moving books, giving it prime real estate, deeply discounting them, and then grabbing a small part of the funnel for temporarily high moving titles. As a regular reader, you could not find what you were looking for. As an impulse reader, you would decide to read what the store wanted you to read every once in a while. The limitations that made book retailers unprofitable, became precisely the reasons why online retailers did not scale.

It’s heartening to see that simple things done right still result in scaled businesses, even in India. Flipkart addresses an interesting niche. As it expands, it will hopefully not get carried away, be mindful of its customer base and try to sell more things that that customer segment needs. It should also be deliberate about maintaining the same levels of service in other categories it enters where timely deliveries are easier said than done. At Chaupaati, many of us are fans of Flipkart as customers as well as entrepreneurs. We look forward to learning more from this cool company and these phenomenal entrepreneurs.

At Chaupaati, we have always wondered how the pervasiveness of the mobile phone can be used to provide market access to consumers at large. In the early 90’s, AOL made the Internet pervasive in American households and Netscape changed the way these consumers accessed information over this new medium. In the late 90’s, several American companies disrupted traditional brick-and-mortar consumption models by providing direct market access to these consumers in this brave new world. In the late 00’s, the mobile phone has penetrated Indian households and we are in times where businesses are figuring out how this impacts the way people access and buy consumer goods and services. Here are some initial learnings.

Phone is not Internet

A phone is meant to access people. The Internet is meant to access information. One may be used as a proxy to the other, but it is important to understand the difference in consumer expectation to enable that proxy. While the phone can be a medium to interact with a digital platform that is always accessible wherever you are, it is different from the Internet. Using the Awareness-Intent-Desire-Action model of consumer behavior leading to a purchase decision, let us contrast how the two media compare. Both phone and Internet are interactive media and best used for Awareness creation on pull rather than by push. The Internet is great for high-involvement information browsing and okay at visualizing, making it a good medium to convert Awareness to Intent to Desire. The phone is pathetic for this purpose. The phone is great at providing comfort from human interaction and clarifying nagging doubts at the moment of truth, making it a good medium to convert Desire to Action. The Internet falls short here.

There is a Unique Reason

Popular myths: (a) If it sells in the store, it will sell on the phone. (b) If it sells on the Internet, it will sell on the phone. These are both dangerously wrong inferences. Wrong because there are several counter examples. Dangerous because they are half-true. A new medium must offer a unique benefit for people to break away from current habit. This benefit must be compelling enough to drive the change in behavior. Multiple successful behavior changes will eventually drive a habit change. Every order by phone is triggered by one or more of these benefits: not near Internet, special order requests, need clarification, not available at my stores, don’t know where to buy, it’s a secret, want to negotiate, want convenience, have deadline, want home delivery, getting a great deal, etc. It will become a habit only after multiple orders. Before that happens, transactions will not happen just because people want to buy.

Medium - Product - Consumer

Popular myths: (1) Television and print are the best ways to advertise products meant for ordering by phone. (2) Gifts and durables are the killer categories for phone commerce. (3) Businessmen in tier 2 urban areas are most likely to buy over the phone. In each case, the incorrect conclusion is that a medium, or a product, or a consumer is best suited for phone commerce. In reality, it is correct to draw conclusions only on the combination of media, product and consumer. Media bias: Housewives will purchase jewelery as seen on TV, but not as seen in a newspaper. Product bias: Parents will purchase children’s comics they browsed online, but not textbooks. Consumer bias: Nagpur shopkeepers will purchase dual-sim mobiles advertised on hoardings, but Mumbai shopkeepers would not. It is the combination that works or does not work.

It’s a Platform, not a Call Center

Just as an Internet business is not just a website, a phone business is not just a call center. Anyone can set up a call center, just as anyone can set up a website. But outsourcing a call center or website design capability is a different business from offering a platform that enables a new consumer service. What defines an Internet or phone business is the product or service it offers, the experience it provides its customers, and the way it fulfills its promise to the customer. Websites and call centers with a strong catalog, good usability and impeccable fulfillment are more than just websites and call centers. Business success relies on understanding the customer need and building an entire organization, product platform and fulfillment network to fulfill that need.

Chaupaati’s mission is to aggregate the commerce between consumers, unorganized businesses and brands in India, and make it easily accessible. We are doing this by working with leading Indian consumer brands and retailers to build out a direct-to-consumer channel in books & magazines, home appliances, computers, mobiles, education, gifts, automobiles, retail, FMCG, consumer services and other verticals we have not discovered yet. If you know of someone who shares our vision, please let me know at kashyap@chaupaati.in. In the meanwhile, enjoy phone pe deal at 922-222-1947.

Chaupaati is now the all-India phone shop for consumer durable products of Videocon brands. Besides home electronics and appliances offered under brand Videocon, this includes small home appliances by Kenstar, living room products by Sansui and Akai, and home appliances by Kelvinator and Electrolux. You can now conveniently order any of these products by calling 922-222-1947 or going to chaupaati.in, and get it shipped to your doorstep anywhere in India within 7-10 days. With this alliance, Chaupaati and Videocon hope to bring affordable electronics directly to your home, saving you the hassle of long queues, carrying bulky items, or going from shop to shop to find the right product and the right deal. Finding the product for your budget and needs is now just a phone call away.

Videocon Group is a $2.5 billion global conglomerate, and is one of India’s largest manufacturers and suppliers of consumer electronics, home appliances and power products. Videocon’s extensive network of distribution and logistics ensures delivery in all major Indian cities with direct warranty from the manufacturer. Since the product is directly sourced from the company, customers get great discounts for the products of their choice. The customer support and after sales service of Videocon is offered for all products purchased through Chaupaati.

The products on offer through Chaupaati include entertainment products like LCD TV’s, Color TV’s, DVD players, audio systems & home theater systems; home appliances like air conditioners, refrigerators, washing machines, inverters and geysers; and kitchen appliances like microwave ovens, mixer grinders, multi processors, rice cookers, toasters, irons.

Chaupaati’s mission is to aggregate commerce between consumers and businesses in India and make it easily accessible. Chaupaati is a phone commerce company that helps Indian businesses and consumers buy and sell products by phone. Chaupaati helps leading consumer brands build a pan-India direct-to-consumer phone commerce channel using its flagship service Response Process Outsourcing.

With this partnership, Chaupaati and Videocon hope to make a range of durables easily accessible to consumers all over India, through the convenience of the phone. Call 922-222-1947 anywhere in India to find the products and deals that are right for you.

For all you Chaupaati fans out there, your prayers have just been answered. You have been buying and selling on Chaupaati and getting your weekly dose of "phone pe deal". We know you have always wanted to wrap yourself with Chaupaati even more, without having to roll in the sand, though that could be fun too. Toube Bas has just baked a hot new Chaupaa`Tee with cheese on top.

We are avid supporters of Citizen Vigilante and have come up with a Tee that instructs fellow vigilant citizens to take prompt action when caught in a situation where something is on fire, someone is not being a good citizen, or other known sticky situations. While making people more socially responsible, we continue to satiate the need to buy and sell stuff when all you have in your hand is a mobile phone and your utter loneliness.

The T-shirt is brought to this world by our cool friends at Toube Bas, who also brought us Runveer , another attempt at motivating fellow citizens to be warrior-like runners. Check out the new Chaupaa`Tee . You may order it online or call 922-222-1947 (where else!) to get it shipped to your doorstep before you step out in the crowd the next time with the intention of saving the world. Only this time, you are better equipped.

August 2009: Laxmikant Vyas, Gaurav Chopra, Mini Paul, Rohit Kumar - students of Indian School of Business 2010 performed a study of Chaupaati Bazaar as part of their final project of the core course in Entrepreneurship. The mandate for the report was to identify an individual who has been involved in starting or growing a venture, identify the challenges or hurdles faced by this individual through his/her journey and the course of action adopted, analyze these actions and their impacts and conclude with any valuable insights gained.

In order to analyze the sustainability of Chaupaati’s business model, they studied a similar venture started by Abhay Singhal, an IIT Kanpur graduate. Abhay was one of the first to realize the potential of phone classifieds and had started his venture in Bombay in 2005 backed by $500,000 in VC funds. They analyzed the reasons why the SMS based phone classified service did not take off as expected and contrasted it with Chaupaati’s business model that overcomes these problems.

The report says that Chaupaati’s key strengths are the business model, affordability by small businessmen, focused top management, and quality of customer experience. The report identifies Chaupaati’s future opportunities in expanding from a phone classifieds to a phone commerce platform, and expanding geographical scope from Mumbai to rest of India; and cites Chaupaati’s agility to adapt to market conditions and change as the biggest factor that makes it eligible to address this opportunity.

Chaupaati was particularly impressed with the “Learning and Reflection” section in which the report draws parallels between Chaupaati’s real world approach and business theories learned in the classroom; in the areas of evaluating and developing the opportunity, securing resources, and growing and sustaining the enterprise.

Thanks Laxmikant and team, for a brilliantly written report and your insightful coverage. And thanks for letting us share it with the world beyond your colleagues and faculty at ISB. Best of luck from the Chaupaati team!

Late Lateef is not your friend’s granduncle who passed away last summer. It is you, who means well, yet forgets to send gifts to your loved ones in a timely manner. You call them and promise to do better the next time, but sometimes there is no next time. Chaupaati has now made it convenient for you to send a gift to your friends and family anywhere in India, from a selection of your favorite brands.

Ferns N Petals is a premium gifting service that offers exclusive gifts for all occasions, and never fails to deliver on its promise. We tried them first and loved how hard they work to bring a smile on the faces of your loved ones. We could not find an address in India where they did not deliver, and their express delivery reaches most major towns of India within the same day (for orders before 2p)! You can browse the FnP catalog by calling Chaupaati on 922-222-1947 or clicking on FnP gifts, and then complete your order online or by phone to ship the gift with a personal note.

Similarly, a range of products like comics by Amar Chitra Katha & Tinkle, sweets by Bikanervala, T-shirts by Toube Bas, Natural products by Adya and more may be gifted through Chaupaati with just a few minutes on the phone or online. Did we make it easier for you procrastinators to send gifts last minute, or harder for you to have an excuse the next time you default?

Tell us what else you would like to see in the catalog.

Chaupaati - phone pe deal

922-222-1947

You are a small business. You have a neat product line up. You probably have a retail showroom. But you also have tie-ups with logistics partners who can deliver your products anywhere in India.

Does your business have an online store where customers can buy your products? Importantly, does your business have a phone store where your customers can call to order and pay?

Chaupaati enables small and medium scale businesses to create a phone + web store in less than 15 minutes. Just log on to www.chaupaati.in/post and create ads of your products (remember to select the ‘I want to sell’ option). Your customers can discover your products by logging on to www.chaupaati.in or by calling 922-222-1947. Once they select the product, they can pay using credit card, debit card or net-banking on web and using a credit card on phone.

On successful completion of order, we’ll send you order and delivery details in real-time. Just ship the order to your customer and settle collections with Chaupaati at the end of month.

Adya International, Bikanervala Sweets and Toube Bas are some of the small and entrepreneurial businesses who’ve set-up their phone stores on Chaupaati. We hope many more businesses will find value with our system.

After being Mumbai’s phone classifieds for about 14 months, Chaupaati is now happy to be India’s phone classifieds. As usual, search or post best deals on computers, electronics, home appliances, furniture, automobiles, real estate, repair services and pretty much anything from anywhere in India; and directly connect with advertisers by SMS.

In our goal to get you the best deals on phone, we also help you buy comics, books, movies, flowers etc. in one convenient phone call and pay using credit/ debit card over IVR.

Call +91 922 222 1947 or log on to www.chaupaati.in. We are always eager to hear from our customers. Please feel free to share your feedback with us.

At Chaupaati, we built a platform to allow consumers at large and unorganized businesses to offer local deals over the phone. We received a great response for buying and selling of a variety of household durables and household services. Over 7,000 advertisers have now used Chaupaati to advertise their products and services, and connected with over 50,000 consumers within their locality. Now consumer brands and corporations have started using Chaupaati as a medium to reach out to consumers with their deals and offers as well.

The complete catalog of Amar Chitra Katha, Tinkle, Karadi Tales, etc. for comics, books, games, audio and video content is now available on Chaupaati to parents and youth across India. Amar Chitra Katha was an introduction to Indian culture for a lot of us when we were kids, while the stories of Suppandi, Shikari Shambhu and Kalia entertained our families all ages alike. It is gratifying to bring the same joy to the ACK fan base across India on a daily basis.

Yatra.com, a leading travel company, is offering phenomenal fly and stay packages to Goa and hotel packages for Lonavala, Matheran, Shirdi and Goa through Chaupaati. You’ve got to love the recession when hotels and flights are available at roughly half the rates of a few months ago. It’s probably a good time to take a break from the stress of a slow economy anyway, and discover the prettier side of the monsoons. We hope that this is the beginning of many more travel deals and last-minute packages on Chaupaati.

BigFlix.com, a leading video rental company, is offering exclusive BigFlix plans for Chaupaati users. If you could watch all episodes of classic series such as Ye Jo Hai Zindagi, The Great Indian Laughter Challenge, Flop Show, Umar Shareif plays within a month for Rs.300, with the convenience of getting it all delivered and picked up one by one at your doorstep, would you take it? We will find out this month. Unlimited disc plans are available at upto 10% off MRP.

Chaupaati strives to bring you the best deals, no matter where they come from. Big brands, small businesses, people like you & me, or anyone who likes to see that smile on your face. We promise many more coming soon. In the meantime, enjoy your phone pe deal…