“The reason I endorse e-commerce, is that reach and benefits of this medium are unmatched”loa
Shanaya Modi based in Ahmedabad who branched out to start a new business- ‘BCool’ from the typical heavy engineering business Mazda Ltd. From a piece of unused factory land equipped with machinery, she ventured out into manufacturing and exporting premium instant powdered soft drink mixes, food color, flavoring essence, rose-syrups and jams. She started the F&B division of her business through Alibaba.com way back in 2005 and today her business has grown by 125 percent. Almost 100 percent of her business comes from Alibaba.com. Here she shares her experiences with Thinking Aloud!
TA: What inspired you to start this business? How and where did you get this idea for a business? What need did you see?
Shanaya: After completing my MSc HR & International Employment Relations, London School of Economics, I returned to India armed with zeal and an entrepreneurial spirit. I did not want to venture into the traditional family business which was into heavy engineering but was keen to start up something of my own. I would have to say entrepreneurship runs in my blood. My father started his own business and I always aspired to be like him, I’d always wanted him to be able to proudly say that I was a ‘chip of the ol’ block’! Also, being a Gujarati, it was pretty obvious choice.
While evaluating multiple business propositions with the help of a consultant, we realized that there was an un-used piece of land equipped with some machinery. Basis his advice, I realized the range of products that could be manufactured with the help of those machines and stumbled upon Drink Mix which led to diversification from the heavy machinery business that Mazda was into. We founded ‘BCool’ which marked the beginning of my entrepreneurial journey.
Next, I had to explore my marketing options. It was clear in my mind that I needed to tap into international markets. However, I was warned by family and friends alike that export trade will take time to establish and breaking through international barriers would be a challenge.
That is when I discovered Alibaba.com while searching for an online promotional channel. This is how I started a whole new business and used the portal to generate those first few inquiries. We have been leveraging the e-commerce platform as a Gold Supplier member on Alibaba.com for eight years now! We ventured out into manufacturing and exporting premium instant powdered soft drink mixes, food color, flavoring essence, rose-syrups and jams. Today the business has grown by 125 percent by using e-commerce as the only promotional and sales channel.
Today, almost 100 percent of our business comes from Alibaba.com and the annual turnover of BCool was INR 6.67 crores as of March 31, 2012
Thanks to e-commerce, we have a footprint across Saudi Arabia, Dubai, United Kingdom, Australia, Nepal, Bangladesh and the U.S.A., and are also associated with some big brand names for who we privately label our products.
TA: How did you finance the business? Was it difficult to gain investors confidence being a woman entrepreneur?
Shanaya: I was fortunate to have some family support in terms of borrowed capital. In terms of initial starting up, I did invest in R&D while the capital goods for the production were already available. For marketing especially in internationally, again, I did not have much to invest in catalogues, travel, hotels, etc. to acquire overseas buyers. E-commerce gave me the wings to tap global buyers at the fraction of a cost and minimize promotion and sales expenditure by staying in my office. The online storefront enabled me to showcase all my products, facilitate real-time communication with international buyers and a pool of international buyers who are now increasingly sourcing online as it is a cost effective medium.
As the business grew and became successful, banks and other financial institutions instill faith in entrepreneurs and gender becomes immaterial. Today, we are absolutely debt free and with strong financials.
TA: What are your marketing strategies for this business?
Shanaya: What differentiates our business model in is that our marketing strategy to what most big companies would adopt. Having a bulk consumption FMCG product which faces severe competition it is virtually impossible to differentiate yourself via ‘product’. At BCool we differentiate ourselves through our novel marketing model. Our repeat product sale is not solely because we manage the balance between quality and competitive pricing, but more because of our intense focus on customer services and strict emphasis on maintaining quality.
What I have bought to the business is an ultra-low cost management style. Even at a revenue value of Rs. 6.25 crore, the whole business is managed solely by me and I am aided by a wonderful Production Manager. I incur no extra travelling costs, and all our sales/service is done via the internet.
Being a small business, we do not have huge marketing budgets especially in this industry where choices are highly influenced by advertising. What worked for our favor is our faith in e-commerce and our continuous association with Alibaba.com. We receive almost 100 percent of our business via the B2B e-commerce portal. Last year alone, Alibaba.com gave us INR 2 crores (US$430,000) of business. However leveraging e-commerce also requires one to adapt ourselves to continuously changing technology. Running the online storefront also requires us to regularly update new product pictures, details. Ensure our keywords are relevant to the queries buyers pose online and respond to queries will help drive business further.
We plan to continue to bank on these strengths to promote our brand recognition and pave the way towards brand loyalty.
TA: How are you managing your time?
Shanaya: Time Management is a huge problem for most entrepreneurs who single handedly run businesses. However, for entrepreneurs like me in the online space, one of the key advantages is that we are mobile - its business on the move. Sometimes it seems that I’m working 24/7, because I am connected for most of the day, either on my laptop, tablet or mobile phone.
With the growing use of e-commerce, women entrepreneurs like me can save time in every step of our business cycle, including identifying business opportunities, purchasing raw-materials and even finding sale leads online. While common perceptions of a traditional export oriented business, is travelling to meet with clients, participate in trade shows, etc. In my case, my entire business is run online which leaves me the flexibility to do whatever I wish - as long as I am connected to the internet.
With access to information at the click of a mouse, building and sustaining business networks is made far easier. Online B2B platforms offer aspiring women entrepreneurs virtual workplaces and digitally mobile lifestyles provide the needed flexibility to manage both domestic and work responsibility with ease.
TA: What are your expectations for the future with regards to this business?
Shanaya: In times of recession, with the decline in luxury foods, mass products do well. People don’t want to spend extra on premium products in this current environment and this will continue to be the case in the near future. This helps our business, as we produce mass consumption food products. While in 2009, in 2009, sugar prices sky rocketed globally. Now in a pro