This is the story of a headstrong entrepreneur, who had his own ideas on how to run an e-commerce business but made the mistake of over-relying on venture capital funds and perished away. Indiaplaza, one of the pioneers in the online shopping platforms in India was founded by K Vaitheeswaran and his five friends in the year 1999. It was formerly called Fabmall or Indramall after which it was renamed to what is it is called now.
The first ever online departmental store, fabmart.com which then offered only music CDs for sale and gradually sold products in the categories such as books, movies, watches, and groceries. After a job at Wipro exposed him to e-mail and Amazon.com as early as 1996, his life was never ever the same. A rich experience of 14 years in various development roles & know-how about Internet & commerce helped him materialize his idea of e-retailing.
Fabmart was started with the help of angel funding but the real funding was provided when the company was split into two- offline and online. 2011 onward they have dwelt upon Indo-US ties for funding of the company. Despite successfully securing these funds it was unable to raise enough during the year 2012-2013 which marked the downfall of this e-retail venture. All was well for Indiaplaza (Story of Indiaplaza).
Its founder was happy in his small yet successful universe. After receiving a handsome amount of funds from Kalaari Capital Advisors Pvt. Ltd, Vaitheeswaran got down to put this money to good use. As a result there was increased hiring, upgradation of website, and launch of a new website called ThinkDigit within Indiaplaza (Story of Indiaplaza) specifically dedicated to tech products and also introduction of COD as a payment method. Although it is said to have done well as a result of these additions, the books showed a stark contrast. Revenues had plunged drastically by 25%.
This was the beginning of their problems. By October 2012, Indiaplaza was running out of working capital. Rent, payment to suppliers had been overdue, customers were frustrated as their oders were not getting delivered at all, suppliers had cut off the supply of inputs, about 95% of the staff had quit the job and what not! All of a sudden they were surrounded by problems at each end. As the realization dawn upon the founder that it was the end for Indiaplaza they vacated the office. Angry suppliers took whatever was left in his office including the bronze Ganesha idol from Vaitheeswaran’s desk! Can you believe it?
This is how ended the pioneer of Indian e-retail which rose to fame much before Amazon, Flipkart and Snapdeal had even planned to begin.
And just like that Indiaplaza (Story of Indiaplaza), one of India’s first e-commerce companies, lost the race. A company built from scratch, that survived dotcom boom and bust, 9/11 and the global economic meltdown finally succumbed to the financial crisis. A company into which K Vaitheeswaran had put his heart and soul into finally saw its end.
FROM THE FOUNDER: K VAITHEESWARAN
I think it is a great time to be an entrepreneur in India. Today the stigmas associated with entrepreneurship such as fear of failure are withering away and people are keen on taking risks. Also, entrepreneurship is important for the economy of our country as fresh jobs are created on a daily basis. My advice for the budding entrepreneurs is ‘nothing ventured nothing gained’. We do face many challenges on this path but we have only one life and if we do not listen to our hearts we never achieve anything. My motto in life is ‘better to have tried and failed than to have never tried at all’ and I want youngsters to follow it as well. Start the venture with a clear plan to grow in a sustainable and profitable manner.”