'We now have over 80,000 items on offer,' says Shayyan Tahir, CEO, HomeShopping

He is a commercial pilot by profession, with a keen interest in e-commerce. Business Recorder recently met him to discuss the challenges and outlook that his company, and the industry faces.
Business Recorder Research: How has your experience been so far as an e-commerce entrepreneur in Pakistan?
Shayaan Tahir: We started off with HomeShopping in 2008 in Karachi. At that time, such a venture was pretty rare because of tiny internet population. People discouraged me when I shared the idea of e-retail in Pakistan. They pointed out to the trust issues - that why would someone buy online without physically inspecting the item.
Observing the growth of Amazon in the west, I was rather futuristic. If an online player could transform the retail industry without having physical stores or outlets, there's got to be potential. I worked on the idea and kick-started HomeShopping from a room with only $100 investment. Initially it was just me; the second person in the team was a rider. Today, we have a 65-strong workforce, have outlets in four cities, and are among the largest players in the e-commerce market.
BRR: What was your approach to counter the trust problem?
ST: We started out with the cash on delivery method, understanding that people would not want to pre-pay even if they took the leap of faith and order online. Then, to accommodate them further, we brought in the return policy. We, as a company, have always had a customer-first approach. Our service is our strength.
HomeShopping also has a price beating policy. Suppose a returning customer, who is satisfied with his prior experience, is on the lookout for a particular product; he does his research and finds out some other e-retailer is charging less for it than we are. He can avail this policy. The tool is also ideal for attracting new customers.
BRR: There are many success stories in global e-commerce like Amazon and Alibaba; which one do you look up to the most, or try to replicate?
ST: Amazon is perhaps the most impressive when it comes to customer service and the disruption it has caused in the traditional retail space. But we replicate no one. HomeShopping is an Omni channel retailer, meaning that it has presence in both online and offline retail. The company was nominated as the world's best Omni channel retailer at World Retail Congress in 2013.
Soon after inception we realised that this model was the way forward for us and our consumers. There are other Omni channel retailers in the world, like Best Buy, Walmart and Target, but what makes us unique is the fact that we started out with the online business and then went to physical retail, as opposed to what others did.
Locally as well, we are unlike most. HomeShopping is a restricted marketplace; it is not an open marketplace like Kaymu, or adopts a purely warehouse-type model. We do allow third party vendors on our platform, but we fulfil the orders. This ensures quality on our end, and let our customers enjoy hassle-free shopping experience.
BRR: How has growth been like for HomeShopping since inception, and how do you see the future panning out?
ST: We just had a phenomenal 2015, the best year we have had so far. But it wasn't always like that. In the first couple of years after inception, things were slow. After that, growth has been steep - like 100 percent growth rates. In terms of product offering, we now have over 80,000 items on offer, which is more than any other e-commerce player.
In terms of sales value, we are the leading company in the industry and have achieved this with zero marketing. Customer service has been our key really; consumer satisfaction goes a long way and much of our traffic is attracted through referrals and word-of-mouth. In terms of bottom line, HomeShopping has been profitable since the first sale, and has shown a profit every year.
The arrival of 3G and 4G internet was of course a huge plus, for the industry as a whole. Our traffic has increased phenomenally since then. The level of growth in our internet population has been incomparably good. By the end of 2016, we expect to have 55-60 million internet users in Pakistan.
HomeShopping, as well as the e-commerce industry have come a long way, but it is nothing compared to where we are headed. In Pakistan, online retail accounts for only 0.1 percent of the total retail - this is $40 billion a year. In India, it is two percent. India's market also had a 0.1 percent share this early after the 3G/4G auction. Things look good for our online retail industry.
BRR: Dealing in electronic items mainly, what are your most grossing product categories and your biggest competitors?
ST: We have got a pretty balanced pie actually. Our customers are most interested in mobile phones, TVs, cameras and laptops. Phone accessories are also very popular.
Personally, I don't think competition bothers me. Yes, there are a host of new entrants in this industry and are margins have been affected. But I believe that if we keep serving our customers the way we have, continue to do things the right way and avoid any major mistakes, no one can threat us. HomeShopping has developed a solid reputation among consumers over the years; we have a thousand customers who have placed at least 20 orders with us - that's saying something.
BRR: Being 18 months or so into the 3G/4G world, is awareness still a problem for the industry?
ST: It is something that will grow with time. Awareness is much more than it was before, and salute to Daraz and OLX for that. These companies, through aggressive marketing have attracted a lot of people online. But then again, greater traffic doesn't always result in greater sales.
We have let our customer service create awareness for us. HomeShopping is the most searched keyword in Pakistani e-commerce industry; it's more searched than e-commerce, Daraz, or online shopping.
BRR: What is your take on the need for e-commerce payment gateway?
ST: People often use this matter as an excuse. We already have 5 or 6 banks which provide gateways including Alfalah, HBL and UBL. It is just a matter of approaching them. At present, 85 percent of our transactions are settled through cash of delivery. The rest are prepayments, which also include mobile wallets.
One matter, or suggestion rather, which I would like to highlight is the inability of customers to open the package on their doorstep, before they pay for it. I think logistic companies should allow consumers to see what they are getting and even return it in case of receiving something other than promised. Otherwise, there will exist small players that sell sub-par goods and consequently hurt consumer trust for online retail.