When two under-30 college mates get together and decide to leverage their expertise to build an enterprise in cyberspace around the most popular products amongst their age group, there is every chance of them getting it right.

Mr Hitesh Dhingra and Mr Amanpreet Bajaj zeroed in on gadgets — mobile phones, cameras, gaming consoles, laptops — in short, consumer electronics, communications and computer goods. These were products that surfers typically research online before making up their mind on the purchase. These are also products that give consumers the most headaches regarding after sales service.

When they started in 2009, it was a bootstrap venture with Rs 10 lakh in the kitty. Mr Amanpreet had chucked his job at Ernst & Young and Mr Hitesh was bent on cashing in on his experience with a global IT hardware e-commerce company. In just over two years, their e-commerce site Letsbuy.com has built an online catalogue of over 150 brands and 5,000 products. More important, in January its parent company, Digitail Management Services Pvt Ltd received $6 million venture capital funding from three firms — Helion Venture Partners, Accel Partners and Tiger Global.

Growing headcount

“This has helped enormously in ramping up. From 13 people when the funding came in, in seven-eight months we have had to increase our staff strength to 270 to keep up with consumer demand,” says Mr Hitesh.

And scaling up meant much larger inventories, especially as Letsbuy.com expanded sales to all white goods, including televisions, home theatres, mixers, and microwaves.

So, then came the pressing necessity for Mr Amanpreet to exploit his expertise – supply chain, logistics and warehousing. In Delhi, the duo hired a large third-party warehousing facility in Kirti Nagar and made similar arrangements in Mumbai and Bangalore. They were now ready to keep the orders coming, with a target to achieve 90 per cent of deliveries in 24 hours at least in the three metros.

However, Mr Hitesh and Mr Amanpreet found that though the NCR was an important buyer base, it brought in 20 per cent of the business. South India brought in 30 per cent, the western region, especially Maharashtra, was the source for 27 per cent of the orders, while the North-East attracted high value orders.

They also realised that though Net savvy, winning the trust of Indian consumers is not an easy job. This was addressed in two ways. One was by offering cash-on-delivery up to Rs 50,000, which now forms 40 per cent of the business. The other was focussing on last mile delivery and getting it right. “We once delivered in a railway compartment on New Delhi station. Our client wanted to give his friend a wedding present and was travelling from Kolkata to Chandigarh. We gave him his delivery where he wanted it – in his compartment,” recalls Mr Amanpreet.

Mr Hitesh relates the story of a consumer from Kerala who made a credit card payment of Rs 3.5 lakh and ordered virtually everything possible for his child's marriage. “We had to deliver a refrigerator, washing machine, television – you name it,” he says revealing that the Web site has seen substantial growth in tier-II and III cities as the portal's business model and partnerships with leading consumer electronics brands enables it to offer a wide range of deals and discounts.

“We would like to be environment friendly too. So we have tied up with green groups for recycling e-waste and planting a tree for consumers in exchange for gadgets on the Web site,” says Mr Hitesh.

More value

On the cards are also more products and more value for consumers. To make the buys more attractive, Letsbuy.com has started offering its own two-year extended warranty packs on certain products, and mobile recharges as well. It is also going to start selling watches, toys and sports gear as consumer surveys show that that's what buyers are requesting for.

So, that's what the real game changer for the e-commerce site would be — another next phase of expansion and the possibility of another round of venture capital funding.

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