Crazeal.com is the Indian unit of Groupon Inc and as the CEO of Groupon India, Ankur Warikoo’s top two priorities are to listen to customers and merchants. Groupon entered India as SoSasta in January 2011 and rebranded themselves as Crazeal and had a management rejig. In an exclusive interview with India Digital Review, Warikoo discusses the story behind the rebinding and their plans going forward.
Groupon entered India by acquiring SoSasta. What was the reason behind rebranding Sosasta to Crazeal?
We entered India as SoSasta in January 2011 and started operations in April across 9 cities. When we started, in the first three months we realised that the quality merchants we were looking to tie up with, had some issues in working with a brand that calls itself sasta (meaning cheap in Hindi). Secondly, we ourselves wanted a change in our outlook from being looked at as cheap to being ‘Value for Money’. The third factor was that the word sasta, which is a Hindi word, was not very popular in South India. Hence collectively we decided to have a rebranding of the product to better signify what we stand for. At the end of the day, if we continue providing best deals, consumers won’t really care whether it is SoSasta or Crazeal.
Right, but why Crazeal and not Groupon?
Groupon.in is facing a legal issue as it is owned by someone else in India. We didn’t want to wait for it because legal processes in India might take forever. But even if we win the case, I don’t think that there will be another rebranding happening. Just because we are called Groupon, people will not start thinking differently of us. Out of the 45 countries that Groupon operates, only 3 countries have different branding and it’s all because of the similar reason.
What was the reason behind the management rejig in the company?
SoSasta was an acquisition and with every acquisition, there is a bit of risk involved. The reason we went in for an acquisition was that we wanted a running enterprise and we wanted to grow fast. Things didn’t work out well. The past management did help us in entering the market and establishing ourselves well, but it wasn’t exactly what Groupon wanted in the overall perspective and we immediately decided to have a new management in place.
As the CEO of Crazeal, what are your priorities in the company now?
We are constantly working on three points. The market is very cluttered and has very little differentiation. Everyone is selling the same items. So, differentiation is one of our prime focus areas. We want to have brands that people want to see from us.
Secondly, we want to be the best partners for our merchants and also select the best merchants properly and be the best advisors to our customers. And third is by virtue of these, differentiate ourselves.
At the time of launch, Crazeal covered eleven cities. Has the number of cities increased? Plans?
We think about cities very differently. It is very easy for us to expand and open up in new cities, but the idea is what are we serving in those cities? We are right now operating in 19 places where we are reaching out to the customers and telling them about our presence. But from a local deals perspective, we are still present in 11 cities. In smaller cities, the merchant base is not very large for us to operate on a daily deals model. So we are focussing on product and travel deals in those places. However, everyday, we look at our orders to find them coming in from cities where we are not present. So, on a national deal everyone can buy it, but on local deals, we are in 11 cities.
What if a consumer comes back to you and says that he didn’t enjoy the deal?
Such cases are rare. If they do happen, as our Groupon promise, we refund the consumer 100 per cent without asking a question.
The reason such instances do not happen often is because we have a dedicated department called Partner Services, where we have relationship managers for our merchants. So before any deal goes up, our relationship managers touch base with the merchants and take them through the entire process, show them the preview of the deal and how the payment would be made. Then that very person becomes the constant relationship manager for the merchant till the deal ends.
What is the process that you follow in deciding what deal should go live on a day?
We reject a lot of deals. We have City Planners and this is a department which thinks of what we should run based on data from the past and also some future projections of any event that is going to happen in the city. Based on this data, our Marketing Consultants go out and speak to the merchants and then the deal comes through. After the negotiations, we do a background check of the merchants and at times we act as a mystery shopper and call up the merchant as a costumer. And finally, we pay a physical visit with the marketing consultant. For products, we call in for samples in our office and check them before selling.
Groupon India’s technical glitches allowed the its database to be leaked on the internet. I am sure the users would be worried now. How are you addressing this?
While the media picked this up, not a lot of people knew that it actually came from us. We noticed it and went to the press saying that we have rectified it before anything went wrong. The rebranding was also timed very well from the SoSasta platform, that was built in India, to the global platform of Groupon. So right now, there is absolutely no concerns.
Group buying and ecommerce websites are flourishing everyday in India. What is Crazeal’s differentiation apart from being a Groupon arm? Recently, a similar Indian website shut shop due to competition. What are your thoughts on this and how are you facing the competition?
This is an industry where everyone feels that it is easy to start a business. So competition is bound to come. The only way we can sustain ourselves is by keeping on doing what we are good at. We are different in focus from any other companies operating in India now. We are more into value creation and from a financial share holding perspective, we have to deliver results. Many firms in India are now chasing consumers and are under-cutting prices. We have had instances where we were selling a deal in the least possible price and were surprised to see that other firms selling the same at a lower price. We don’t do that because we don’t have to go to the investor and say that we sold these many numbers.
A lot of ecommerce brands are spending hugely on marketing. What are your marketing plans for Crazeal?
The objective has to be defined. We won’t do TV for pleasing someone. We will do TV when it makes sense. We are doing online because we believe that people who are online are easy to target. And then we are also focussing our energies on partnerships with some strong players. Recently we had partnered PVR, wherein if a consumer is registered with the Crazeal newsletter, once he goes to PVR, he gets popcorn and Pepsi free. Marketing is very important for this business and we will be reasonable in our marketing spends.
Another trend in the ecommerce industry is setting up your own logistics network. What are your plans on these?
I think it is an unnecessary evil. It has to be done to offer value to the customer but at the same time it is not the core of the business. I am sure that Sachin Bansal is not the happiest in saying that he has his own logistics network because it is very tough to build one. It is necessary because if you are promising the consumers of a 2-day delivery, then you will have to have one. For the logistics companies in India, ecommerce is still very small. Ecommerce has suddenly grown in India and the logistics industry couldn’t keep pace with it just because it is tough to set up such an infrastructure. We don’t have any such plans to do that because it is not the core of our business. We have partnered Blue Dart for this across India.
How do you see the ecommerce space evolving in India?
It’s a great time to be a customer. You want a product and you might get that for less than what the manufacturer is selling at. Transactions are happening and that is a reality. Cash on Delivery has also helped in evolving the business. I am a great fan of FlipKart for what they have done to make this industry mature and accessible to many people.
My concern is the kind of projections that the investors lay on these companies. The valuations are out of place but the businesses are for real and they are growing. Its not a buble because a bubble will happen when you see that no transactions are happening. That is not the case here now.
