"We closed 2002 with sales of $2 million and have already touched $6 million in sales this year" Shilpa Warty, Reflecting Concepts

Dotcoms are dead. Sure. But look closely at the aftermath of the devastation and there are unmistakable signs of life: companies that qualify on all parameters as online businesses and then some. Ventures, that have their back offices firmly rooted in manufacturing and front ends, online. Firms that skirt real estate costs, wholesaler margins, retailer margins, the entire shebang and pass on all the savings to the customer. If all this sounds like the much-dissected model of an Amazon or an eBay, it is. Only, the model is now being discovered by several unknown Indian entrepreneurs. None of them has set eyes on a venture capitalist (thank god for that) and go strictly by the old world business maxim of gauging demand, investing in a backend, generating revenue, and reinvesting in the business.

The number of entrepreneurs testing the waters for an online business is growing by the day. One instance: a couple of weeks ago, this writer received a phone call from a friend, a stay-at-home mom who designs websites in her spare time, who announced that she had just turned manufacturer of wooden toys. A lot had obviously happened since we had last spoken and the story goes something like this. Nina (that's her name) was surfing the internet when she came across an interesting wooden toy on a shopping site. She sent a routine online enquiry to the US-based seller asking about shipping costs to India. She definitely wasn't prepared for the reply: a response from the CEO of the company, telling her how exciting it was to hear from someone in India (where he'd heard manufacturing was really cheap!) and whether she could find someone to manufacture some of his toys in India. Thinking on her feet, Nina invested some time on research and was soon discussing manufacturing and costing specs with the gentleman and at the time of the call to this writer had just bagged her first order for 5,000 wooden toy trucks.

Intuition led us to believe that Nina's couldn't be an isolated case and we were right. Across product categories such as jewellery, apparel, and traditional crafts are a hundred stories of start-up businesses whose models are based entirely on online sales. If the examples are anything to go by, Indian entrepreneurs have discovered the www and how.

"We are seeing a lot of interest in the US, so we are pretty confident about the decision to open a retail outlet in New York" Pratik Goenka, Villagecraftz

Of Dazzlers And Illusions

Ensconced in her office in an up-market apartment complex in Thane, near Mumbai, Shilpa Warty is barking instructions into a hands-free phone set while her hands alternate between the keyboard and mouse even as she closely scans the monitor in front. "Launch it (presumably an item of jewellery) rightaway", she instructs someone before switching to another extension on the phone where she firmly announces "the listed price on the item you've put up is wrong; I am sending you the right price; change it immediately".

Shilpa and her husband, Aniket Warty, a software professional, became involved with an online jewellery venture founded by US-based NRI, Nikesh Railkar in 1998. It took the trio the first few years to perfect its business model and build its credentials online (their company is today among the top 10 jewellery sellers on global auction site eBay). Now, says Shilpa, the action has just started to hot up. Their company Reflecting Concepts has four sub brands it retails on eBay alone, Reflecting Concepts (for diamonds), Illusions (for gold and gemstones), Jewelry Days (for silver and gemstones), and Valusilver (for silver). This year the company started retailing through Indian auction site Baazee under the brand names Illusions and Dazzler. Reflecting Concepts' production centres are India (Jaipur), Thailand, and now China and all this production across Asia is monitored and controlled by Shilpa who shuttles between these production centres to oversee operations. The lady is convinced that the real action is yet to come. "We closed 2002 with sales of $2 million and we have already touched $6 million in sales this year." As for the business model, it's quite simple, all customer interface is purely online ("If we had physical showrooms, we could never sell the jewellery at the prices that we do," laughs Shilpa); the production happens at the most cost effective centres, and the resulting price differential serves as the company's biggest competitive edge. "See this diamond choker whose appraisal price is $11,000?" asks Shilpa, pointing to an item listed on eBay. "I can sell that item at one third that price."

"Our role is to derisk the business for the artisans by buying their products and then selling them" Santosh Narayanan, Indiashop

Online Brand

Heard of an apparel brand called Priyanka's? You would have if you were an NRI who shopped online for Indian clothes. The brand retails across portals frequented by the Indian community, and is popular with an NRI clientele in the US, the UK, Europe, and West Asia. The business was founded three years ago by Ramesh Nahata, a Mumbai-based stationery manufacturer. The company has its workshop-cum-studio in suburban Mumbai. Don't bother looking up its postal address in the hope of picking up clothes at attractive discounts. Remember the maxim of an online business? Don't put up retail showrooms. As the Priyanka's website clearly states in its exhaustive FAQ section-the reason we are able to offer such attractive prices is because we don't have retail outlets. Customised service (the customer fills out a detailed measurement form online once she places the order) and lower prices than those of retail stores seem to have worked wonders for this Mumbai-based company (80 per cent of its sales are to overseas customers). The company is also seeing rising interest from wholesale buyers as well, according to A.K. Joshi, General Manager, who discloses that Priyanka's closed last year with Rs 4 crore in revenues and expects to end this year with Rs 10 crore.

Tradition Goes Online

Quick, name the top five global internet sites. Well, Rajiv Mehta's company Surat Diamonds sells jewellery on all of them. Well almost. "Please don't name the sites I sell on; you know how it is, before I know it a whole bunch of Indian sellers will get onto them," pleads Mehta, who works out of a century-old open courtyard building in the heart of Mumbai's diamond district where jewellery craftsmen sit cross-legged at work around him. Of course, it isn't as simple as he makes it out to be. His online success has taken three concerted years of deciphering the online puzzle. Hailing from a family of wholesale diamond merchants, Mehta decided three years ago that he simply had to experiment with the Internet. "My family just didn't take it seriously till they saw that it made business sense," explains Mehta. Now Surat Diamonds' online sales equal its offline sales of Rs 4 crore. Through a network of alliances with banks and telcos, contests, even ads in publications targeted at NRIs, Mehta has built his web connections. Regular chats with customers have taught him nuances related to colour and style. "I have had one-on-one interactions with 3,000 customers; that's how I conduct market research," he says proudly. It's obviously paying off.

"I have had one-on-one interactions with 3,000 customers; that's how I confuct market research " Rajiv Mehta, Surat Diamonds

Village Crafts Travel Online

About 40 km from Chennai, at Kunnam village near Sriperambadur 200 artisans have formed a network to cater to buyers of hand embroidery. One of their key buyers is FOOD India, a Chennai-based non-governmental organisation which has been active in the areas of low cost housing and sanitation and which now sells village crafts online. FOOD started its e-commerce venture in association with a few other NGOs in 2000 as an "experiment" titled 'Indiashop'; today, this experiment generates around Rs 3 lakh a month, according to project co-ordinator Santosh Narayanan. "Our role is to promote the site effectively and derisk the business for the rural artisan by actually buying the products off the craftsmen and then selling to customers," he explains. Indiashop has 60 contact points with artisans across Tamil Nadu; each contact liaises with groups of 10-20 craftsmen. Sarees from Kanchipuram, copper plates and paintings from Tanjore, and stone cut works from Mahabalipuram are just some of the 1,000-odd products Indiashop sells online. Ask Santosh about some of the more interesting requests he's had online and the first on his list is a Murugan (son of Hindu god Shiva) idol for a temple in New York, which was sculpted in Mahabalipuram and delivered to the temple via FeDex.

Far away from Chennai, in Jaipur, a small online retail venture, Aapno Rajasthan, which specialises in Rajasthani handicrafts and sells them mainly through Indian portals like Rediff, is planning a bold move. The company is scouting around for a retail location in the Big Apple, not something one would expect of a business that generates less than Rs 1 crore in revenue. "We are seeing a lot of interest in the US, so we are pretty confident about the decision," says Pratik Goenka, CEO, Villagecraftz, the company that owns the Aapno Rajasthan brand. The move could work for a company whose output is unique (and, at the same time, artsy). As for the rest, the web it is.