Tuesday 1 March 2016

Craftsvilla acquires ethnic food etailer; regional competition heats up

Online marketplace for ethnic products, Craftsvilla has added a new category to its product portfolio- Ethnic Food. It has managed to do this by acquiring food etailer Place of Origin.
The food start-up was founded by Ashish Nichani and Sudarsan Metla in 2014. It sources Indian sweets, confectioneries and other food items from across the country, such as Moddys Ooty’s Chocolates & Pune’s famous Chitale Bandhu Bhakarwadi and ship the orders to buyers.

Craftsvilla wants to be one-stop-shop for everything ethnic

The acquisition is aligned with Craftsvilla’s aim of becoming a one-stop shopping destination, with respect to traditional Indian produce, be it clothes, jewellery or food.
“Craftsvilla’s vision is to build a one stop destination for consumers to buy everything ethnic. We believe that ethnic foods is as big a category as ethnic wear with upwards of Rs. 50,000 Cr. market size and we are looking at ethnic foods as another frontier of growth in ethnic space. Ethnic foods category is very unique with lots of regional variety and is very unstructured,” reiterated Manoj Gupta, co-founder & CEO of Craftsvilla

While explaining how the food etailer will help it to increase its market share in the online ethnic segment, Gupta said,
“Place of origin has been working in this category for last two years and has been able to bring lot of regional varieties online and address key logistics challenges in this space. We look forward to utilizing their experience and our reach to make this a huge category of Craftsvilla.”
How much this equity deal cost Craftsvilla has not been revealed nor it is clear if Place Of Origin will continue to function independently or will get merged in the online marketplace platform.

Online regional stores gaining pace

Migration and globalization has led to huge demand for regional/cultural products and ecommerce is helping to bridge that gap.
Besides Bangalore-based Place Of Origin, there are other players too like Giskaa that sells North-east products, Kashmirbox for Kashmiri products, Gujarati snacks etailer Farsankart and curated online shop, Jaypore.
However, Craftsvilla remains the leader of the ethnic ecommerce market. In the past one year, the marketplace has managed to secure $52 million funding ($18 million in April 2015 and $34 million in November 2015)has started off Image Search feature, rolled out experience stores and offered loans to sellers.
Therefore, it’s quite possible that regional players may have to collaborate with ethnic leaders like the Craftsvilla-Place Of Origin merger, in order to sustain in the highly competitive ecommerce industry.
Place Of Origin founders are quite pumped up post-acquisition exclaimed, “We believe there is an online demand potential of $5 Billion which is waiting to be tapped. We are excited to work with Manoj and disrupt the specialty food market, thereby providing genuine value & happiness to consumers and producers alike.”

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