IT@TT - Online

Since it's inception, Fabmart has grown eyeball by eyeball. And has several awards including PC Quest's Editors Choice 2000 for the 'Best Focused E-Commerce Site amongst a review of 66 e-com sites in India'. Amrita Ghosh of IT@TT discussed the site's success and USP with VS Sudhakar, MD, Fabmart.

IT@TT: What's the core concept behind Fabmart?

VS: Fabmart's core concept is to offer customers a shopping experience, which is as good or better than what they are used to currently in physical stores. Fabmart will leverage the Internet as a medium to offer consumers such a shopping experience.

IT@TT: Tell us something about the company?

VS: Fabmart was founded in August 1999 by a team of six people drawn primarily with an IT, Internet and logistics background. Today we are acknowledged as a clear leader in e-tailing in India but we still have a small team of just 32 people. One reason why this has happened is because at Fabmart, we out source almost all functions to partners. We just retain the key functions of merchandising, storefront, customer fulfilment and marketing in-house.

IT@TT: Since you follow an outsourcing approach, who are your partners and associates? What's the revenue sharing in your tie-ups?

VS: We out source activities to various partners who are experts in their respective areas. Some of our partners are Citibank, Ernst & Young, Blue Dart etc. These are not revenue sharing based arrangements, although we use this for our Affiliate Program. Any website in India can sign up as a Fabmart Affiliate and earn revenues in a transparent and simple manner.

IT@TT:What are the stores that are currently functional in Fabmart? Since your original idea was a virtual supermarket, are you looking towards expansion in terms of the choices offered?

VS: We started with a music store in September 1999. We have subsequently opened stores for books (Feb 2000), jewellery (June 2000), groceries (Oct 2000 for Bangalore and Chennai users only) and recently a toy store (Dec 2000) We plan to keep building more stores in future like computers, garments, watches etc.

IT@TT: You claim that your stores are designed to be treats to fans. What are the unique features that validate claim?

VS: Each store is built to cater to specific customer profiles who are expected to shop there. Each has a comprehensive range of merchandise, attractive offers and promotions, detailed information on the merchandise, live customer help etc., to help customers make better buying decisions.

IT@TT: What kind of payment options do you offer?

VS: We offer a variety of payment options including credit cards from Visa/MasterCard and Amex, debit cards, direct account debits from select banks, our own e-instrument called FabMoney (available in select cyber cafes in 6 Indian cities) as also cash or cheque on delivery (restricted to our Grocery Store).

IT@TT: Has the new payment gateway that you recently set up improved your customer response? Or has it increased customer dissatisfaction?

VS: Being a new gateway, customers are getting used to the fresh procedure, especially those who are used to shopping with us before the online gateway. Also, these gateways are being implemented by banks for the first time and there may be some teething issues. In the long run, we expect this to improve customer satisfaction.

IT@TT: You had a tie-up with IT@TT for offering discounted rates to buyers of IT books who order through us. But the response was very poor. What's your response to that?

VS: We keep trying various things to induce customers to try online shopping. Sometimes, things do not get us the response that we want. We need to reconsider this, find out where we went wrong and perhaps come up with something better together with IT@TT. We also feel that the offer would've elicited a better response if it had got integrated with an online web site as well.

IT@TT: Online security of credit cards is a vital issue determining the fate of the e-tailing industry. Do you take any extra precautionary safety measures that attract more traffic at your site?

VS: We offer encrypted SSL (Secure Socket layer) links at Fabmart to prevent third party access of sensitive credit card details when customers are submitting it over the Internet. We will also shortly introduce a PIN based online gateway along with Citibank for their credit card holders.

IT@TT: What do you think is the future of virtual shopping? Will it ever filter down to the grass roots level?

VS: E-shopping will follow the spread of the web. As the Internet starts filtering down in society and more and more people start using it as part of daily lives, these people will start using email and chat but will graduate to other applications like shopping. When this happens, e-shopping will start filtering down and not just get restricted to the upper classes.

IT@TT: Since its inception in October 1999, Fabmart has tasted success at a breakneck speed. Could you tell us how Fabmart pioneered the growth of an almost fledgling e-tailing concept into an exciting industry in India today?

VS: The key reasons for Fabmart's success has been unrelenting focus on e-tailing, backed up by best-in-class customer service. We have consistently reached out to fresh and new customers and encouraged them to try out e-commerce. Our aim has been to make sure that customers who shop with us go back happy. This helps in bringing them back and also spreads word-of-mouth, which is so critical in this business.

At Fabmart, we knew we were taking on a tough job - changing people's habits. This is serious business and cannot be accomplished if we try to attempt this along with multiple other activities. Hence as an organization, we've brought a maniacal focus on e-tailing and do not waste time on anything else apart from focusing on shopping. This kind of focus and efforts has helped us win a series of awards and also establish us as a clear leader in e-commerce in India.

IT@TT: Who are your competitors?

VS: While there are many websites who are attempting to sell online, we are yet to come across any competitor who is building up a virtual supermarket like Fabmart and following the store-by-store approach. The Fabmart model is actually closely modeled on Amazon.com

IT@TT: Where do you see Fabmart in a few years from now? Do you have plans for a country-wide expansion?

VS: Except for grocery, all other stores (music, books, jewellery, toys) deliver across India to 850 cities. From day one, we have worked towards building a National Brand in Fabmart. We intend expanding into overseas markets in the next three months. In a few years from now, I see Fabmart as a profitable and large retail brand with an International customer base.

IT@TT: What's the value proposition that makes the Fabmart experience truly Fab-ulous?

VS: Customer Service. We are setting fresh benchmarks for customer support as a virtual company on the web.

IT@TT: Do you surf the Net? Could you share with our readers 5-10 of your favorite websites and why you like them?

VS: My favorite web sites are www.yahoo.com for search facilities, www.hotmail.com for my personal email, www.bbc.co.uk for world news, www.ciol.com for IT news, www.amazon.com as a benchmark in online shopping and obviously www.fabmart.com, which I truly believe is a world class web site from India.

Interviewed By Amrita Ghosh
[email protected]

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